Competitive Analysis of Whole Foods, Inc. - PowerPoint PPT Presentation

Loading...

PPT – Competitive Analysis of Whole Foods, Inc. PowerPoint presentation | free to view - id: 2ab1c-Y2U0N



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Competitive Analysis of Whole Foods, Inc.

Description:

Whole Foods Market, Inc. 25 Years Of Double Digit Revenue Growth ... Whole Foods Current Strategy. Expand Through New Store Openings ... – PowerPoint PPT presentation

Number of Views:2561
Avg rating:3.0/5.0
Slides: 28
Provided by: johnp45
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Competitive Analysis of Whole Foods, Inc.


1
(No Transcript)
2
Executive Summary
  • Whole Foods Market, Inc.
  • 25 Years Of Double Digit Revenue Growth
  • 4.7B Organic Supermarket Industry Leader
  • Whole Foods Current Strategy
  • Expand Through New Store Openings
  • Achieve 12 Billion In Sales By 2010

3
Executive Summary
  • Competitive Strategy Analysis
  • Supplier Power Dominates This Industry
  • Current Strategy Lacks Aggressiveness
  • Recommended Strategy
  • Establish Partnerships With Traditional
    Supermarkets
  • Achieve National Brand Equity

4
Overview
  • Porters Five Forces Analysis
  • SWOT Analysis of Whole Foods
  • Recommended Strategy
  • Questions/Discussion

5
Market Definition
  • Market History
  • Natural And Organic Food Industry Began About 30
    Years Ago
  • Whole Foods Market Is A Founding Firm
  • USDA Established The Organic Rule In 2002

6
Market Definition
  • All Products Sold As Organic Must Now Meet The
    Requirements Of The USDA Organic Rule
  • Approximately 13 Billion In Sales In 2005

7
Internal Rivalry
  • Threat To Profits High
  • Sources Of Internal Rivalry
  • Many Sellers In The Market
  • Differing Cost Structures
  • Strong Exit Barriers

8
Internal Rivalry
  • Differing Cost Structures
  • Consider A Wal-Mart Supercenter
  • 100,000 Square Feet
  • Average Supermarket Only 35,000 Square Feet
  • Significant Economies Of Scale Difference And
    Wal-Mart Continually Drives Down Prices
  • Strong Exit Barriers
  • High Investment In Property, Distribution And
    Inventories

9
Entry
  • Threat to Profits Medium
  • Originally, Health Food
  • Stores Were Small,
  • Expensive,
  • And Unpredictable.
  • Some Health Stores Grew Into Supermarkets
  • Sun Harvest
  • Whole Foods Market
  • Some Existing Supermarkets Re-Branded
  • Wegmanns
  • HEB Central Market

10
Segment Entry Types
  • Re-branded Supermarkets
  • H.E.B. (Texas) Created Central Market
  • Wegmans (New York) Upgraded Locations
  • New Supermarket Entrants
  • Growing Health Food Stores (GNC)
  • New Firms

11
Entrant Comparison
12
Most Likely Segment Entrants
  • Based On The Barriers To Entry Analysis, The Most
    Likely Entrants Into The Organic Segment Of The
    Supermarket Industry Are Established Firms

Whos Next?
13
Substitutes And Complements
  • Complements
  • Health Industry
  • Health Insurance Companies
  • Health Care Specialists
  • Fitness Centers
  • Wellness Programs
  • Substitutes
  • Threat To Profits Medium
  • Health Food Stores
  • Traditional Supermarkets
  • Supercenters

14
Supplier Power
  • Threat to Profits High
  • Local Growers, Independent And Family Farmers,
    Large Corporate Farms, Co-ops And Food Brokers
  • Organic Supply Chain Underdeveloped
  • Growing Number Of Organic Food Grocers

15
Buyer Power
  • Threat To Profits Medium To High
  • Buyers Have Options!
  • Price
  • Convenience
  • Varying Levels Of Health Sensitivity
  • Mixed Consumer Messages

16
Porters Five Forces Summary
17
Whole Foods, Whole People, Whole Planet
Strengths
  • Corporate Culture
  • Customer Experience
  • Perishables
  • Hip Image
  • Double Digit Growth
  • Largest Selection

18
Strengths

19
Whole Financing!
Strengths
  • Strong Cash Flow And Stock Position Provide
    Capital For Growth In The Most Highly Desired
    Locations
  • 4.7 Billion Dollar Revenues
  • Revenue Growth
  • 21.6 Percent From 2004 To 2005
  • 15.8 Percent From 2005 To 2006
  • Returning Invested Capital (ROIC) 37
  • Capitalization Increased To 6.8 Billion 6th On
    The List Of All Grocery Chains

t
20
Weaknesses
  • Whole Paycheck
  • Whole Planet? Weak International Operations
  • Low Employee Efficiency
  • Revenue per Employee 138K versus Industry
    Average of 309K

21
Opportunities
  • Market Leadership in High Demand Segment
  • 2002 USDA Organic Rule True Differentiation
  • Organic and Natural Food Industry Focus on
    Consumer Education
  • Media Coverage
  • Health benefits of organic foods
  • Suspicious of contaminants (e.g. hormones,
    antibiotics, etc.)

22
Opportunities
  • Private Label Brands
  • Whole-X, Where X Kids, Ranch, Fields, Catch,
    Creamery, Diary, Treat
  • Growth Of These Brands Is High Due To Lower Price
    Versus Contemporary Organic Brands
  • Potential To Sell These Products In Traditional
    Supermarkets

23
Threats
  • Increased Competition
  • Re-branding Existing Supermarkets
  • Wal-Mart
  • Changes in Government Regulations
  • Changes in Economic Conditions
  • Impact of Consumer Spending

24
Corporate Strategy
  • Whole Foods Current Strategy
  • Expand Through New Store Openings
  • Build Versus Buy New Stores
  • Customized Stores To Local Preferences
  • Open To Acquisition Opportunities
  • Grow Store Space At A Controllable Rate Of 14
  • Preserve Corporate Culture
  • Achieve 12B In Sales By 2010

25
Medium Term Strategy
  • Coordinated Campaigns To Enter New Markets
  • Prior To Store Opening, Establish Relationships
    With
  • Traditional Supermarkets Willing To Sell
    Whole-X Products
  • Local Organic Suppliers And Growers
  • Aggressive Advertising Upon Store Launch
  • Emphasize Whole Foods, Whole People, Whole
    Planet

26
Long Term Strategy
  • Build National Brand Equity
  • Extend Partner Relationships Into Current Markets
  • Increase Advertising Budget From 0.4 To The
    Industry Average Of 1.5
  • Focus On Building Brand Identity With Organics
  • When Consumers Think Organic, They Think Whole
    Foods
  • Shed The Whole Paycheck Image

27
Questions Discussion
About PowerShow.com