SWOT Analysis of Whole Food Markets

Whole Food Market’s SWOT Analysis

Whole Food Market’s SWOT analysis reveals that the company has critical strengths and minimal weaknesses, allowing it to capitalize on opportunities and overcome threats, and it is related to the firm’s nature and plans. This exercise allows managers, employers, and investors to make informed decisions in their food enterprises. As a result, we can identify both internal and externally intended concerns in the firm (Gregory).

Strengths

This component of SWOT analysis identifies the skills that an organization can use to improve its development and effectiveness. First and foremost, a company can use technology to acquire an advantage over the purchasing experience. According to (Gregory, 2017), Whole Food Markets uses different inventive expertise to deliver a heightened shopping experience to its clients. In 2014 they partnered with Apple to advance and make shopping effortless for its regulars by making the process safe and private during transactions across the U.S. The firm also introduced reward points redeemed by a card owner for free foodstuffs and got reductions and at the same time, restructured a mobile app that concentrated on shopping efficacy. The application assisted customers in making shopping lists, getting cooking tips harmonized to that of the corporates website.

Whole Foods Market increased its Instacart shopper online delivery to add 60 stores in 16 cities. In improving its efficiency on operations to satisfy their clients. The firm united with Infor to develop Infor CloudSuite, a next-generation retail stock, and supply chain management stage. Secondly, Whole Food Market dedicated to its mission of maintaining the highest quality standards, has promised that by 2018 their merchandise would be branded to show whether they have genetically modified organisms (Dalavagas). They surely stand out from their opponents dealing with low-quality products by providing fresh, natural and organic goods. Thirdly, they offer a wide range of products. Its products consist of tea, beer, household goods, wine, cheese, pet foods, packaged goods, body care, bakery items and nutritional supplements.

Whole Food Market is the most significant retailer of natural and organic foods in the U.S. Its attractive portfolio has to enable them to maintain their regular buyers and attract new ones’. The corporate has also focused on their growth by expanding and even opening international stores allowing them more access to desirable markets, increase their purchaser base and diversify their revenue streams (Dalavagas). Likewise, Whole Food Market had a strong brand reputation and invested in motivating their taskforce, enabling the company to capitalize on and minimize spending on recruitment and training.

Weaknesses

Whole Food Market’s has shortcomings in the supply chain, pricing policy, and market presence. In this phase, we pinpoint the problems that may hinder the company’s growth. One of the major concerns is that Whole Food Market’s has a fragile global presence and it is dependent on the U.S. market. They have a stagnant international penetration with only 3% of its sales being outside the U.S. in Canada and UK accounting for 21 stores (Gregory). The economic changes in the United States can compromise them as most of the revenue is from here. In this competitive age, few markets render Whole Food Market vulnerable and limit their growth opportunities which prevent them from getting benefits that come with international operations. Another issue is on food recalls where we have seen most of their products withdrawn from stalls. Just this year, the company recalled pies because of having tree nut allergen not listed on products labels. In the same period, Shiga toxin associated with Escherichia coli found in cheese leading to its withdrawal from the Midwest and South regions. The frequent product recalls affecting the company’s branding image, lowering customer allegiance and brand parity (SWOT Analysis of Whole Foods Market). A different issue is on increased rental expenses where whole food markets have a duty under certain capital leases for rental of specific buildings, equipment, and land. Thus, the charges on operating leases affect their trade, shaking the firm’s profitability and impacting on its margins. Whole Food Market has a pricey image making it unattractive for price-conscious customers who instead buy cheaper products. Similarly, they have a restricted network of contractors to fulfill their criteria preventing the company from promptly intensifying its operations.

Opportunities

The prospects that Whole Food Market’s has been linked to the current competition and the global market and in this section, we outline the possible engagements that will facilitate the business progression. Over the years, the increased awareness of the importance of natural foods in the diet has amplified demand for organic and natural products. The U.S. organic food market has hit a value of 40.2 U.S. dollars, a market growth of 12%. Parents concerned about providing healthier food options for their children have turned to natural foodstuffs. This places Whole Food Market’s in a strategic location to profit from the rising organic food market and to refine its market share (Bells). The company’s income base will be lucrative with a stable growth potential market. Incidentally, the increasing demand for private labeled products in the U.S. among clients will enable Whole Food Market’s to enhance its value offerings. This is likely to have a positive impression on the firm’s sales and profit margins. Still, there is a new industry on pet spending. More than 65% of the households own a pet. Whole Food Market provides a variety of choices to pet owners concerning diverse feeding viewpoints, and have a chance to maximize on the increasing pet spending in the U.S. Incursion of e-Commerce where business model has new ownership by Amazon has translated into significant opportunities in pricing of natural and organic products sold within Whole Food stores and will impact customers purchase of packed goods. Also, global expansion of retail operations, supply chain and competitive pricing is a chance for Whole Food Market’s to tap on their potential and grow their business.

Threats

Threats facing Whole Food Market’s arise from climate, the competitive landscape, and food technology and may lead to a reduction in their trade performance. Low-cost competition on natural products because of already established mainstream grocers is pitting the same retailers against each other. Whole Food Market’s is facing competition from Safeway and Kroger and Wal-Mart who are reducing their costs to attract shoppers based on low prices (Dalavagas).

Whole Food Market’s subjected to numerous laws and regulations where they have to conform with health and sanitation standards, food labeling minimum wage and licensing for the sale of food. Several state departments and agencies set criteria and failure to comply results in fines and confiscation of the warrant. The guidelines present a further compliance cost that lessens the corporate margins. Labour costs and wages are also increasing, amassing the company’s overall expenditures and upsetting its margin and diminishes the firm’s ability to fulfill standards due to the rise of GMOs respectively.

Conclusion

In conclusion, from Whole Food Market’s SWOT analysis that they are reliable in producing goods of high quality, have a weak point on dependence on the U.S. hindering their growth. They have an opportunity to widen their business internationally, and global warming together with GMOs provide a significant threat.

Works Cited

Bells, Sonya. “Analyzing the Opportunities and Threats for Whole Foods after Fiscal 2015.” 18 November 2015. December 2017. .

Dalavagas, Iason. “SWOT Analysis: Whole Foods Market, Inc.” 25 November 2015. 1 December 2017. .

Gregory, Lawrence. “Whole Foods Market SWOT Analysis & Recommendations.” 31st January 2017. 1st December 2017. .

“SWOT Analysis of Whole Foods Market.” 2017. 1 December 2017. .