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CASE NUMBER 7
Group Members
Aysha Khan Marium Vohra Mehak Rasheed Monum faizan Nuzhat Yasmin
OUTLINESSTEP 1 INTRODUCTION AYSHA KHAN
STEP 2 MISSION AND VISION AYSHA KHAN
STEP 3 INTERNAL ASSESSMENT MONUM FAIZAN
STEP 4 EXTERNAL ASSESSMENT NUZHAT YASMIN
STEP 5 STRATEGY FORMULATION NUZHAT YASMIN AND MARIUM VOHRA
STEP 6 STRATEGY IMPLEMENTATION
MEHAK RASHEED
STEP 7 STRATEGY EVALUATION MEHAK RASHEED
STEP 8 CONCLUSION MARIUM VOHRA
COMPANY HISTORY
COMPANY HISTORYName Whole Foods Market, Inc
Founded 1980
logo
Brand value Natural and Organic food
Geographic areas served U.S., Canada, UK
Headquarters U.S.
motto Whole Food, Whole People, Whole Planet
Stores 275 stores(2008)284 stores (2009)435 stores (2016)
John Mackey and his wife began a small natural foods store called Safer Way and were evicted from their apartment for storing products in it, so they were forced to live in their store. After
several mergers a couple years later with Craig Weller and Mark Skiles, the opening of the original Whole Foods market began. Whole
Foods expanded to Houston and Dallas in 1988 and then into the West Coast. During this time, the trend had caught on and other natural food
chains began opening in the Northeast. In 2007, Whole Foods expanded into markets all
across the U.S. and into the U.K.
WFMS STORY
EXPANSION HISTORY
1984- Whole Foods Market began its expansion. 1989- We expanded to the West Coast. 1990-1999- acquiring other natural foods chains throughout
the 90's. 1998- Development of "virtual" store began. 2000- Additional acquisitions. 2001- Whole Foods moved into Manhattan. 2002- Expansion into Canada 2003-2004- Whole Foods Market entered the United
Kingdom. 2007- Merger with Wild Oats
WILD OATS MARKET INC Started in boulder, Colorado in 1987. Acquisition due to competition 35% market share + Wild Oats = 50% market share it helped WFMs to have an increase in the number of
stores and to explore new geographical locations which obviously allowed WFMs to serve more customers.
Acquisitions of Wild Oats was a capital and costly decision and it can affect the financial position of the WFMs.(cons)
This acquisitions is also against the strategy of WFMs to have larger stores because Wild Oats stores are relatively smaller.
PRODUCTS
Sea FoodMeat And PoultrySpecialty(beer , wine & Cheese)Nutrition & Body Care(organic, natural)Floral ItemsGroceryPrepared Food (soups, canned and packaged)
Coffee And TeaVitaminsPet ProductsBakery(cakes, breads and cookies and etc.)Educational products such as Books related to cooking, diets and lifestylesHousehold products
STEP 2:VISION AND MISSION
STATEMENT
• Searching for the highest quality, least processed, most flavorful and natural foods
• Famous at providing organic food Whole Foods
Whole food
• Employing people who are passionate about healthy food and a healthy planet.
• Providing excellent customer service Whole People
Whole people
• Caring about communities and environment • Sponsoring neighborhood events and Donating
to local non-profit groups Whole Planet
Whole planet
MOTTO
‘We are selling the 100% organic and natural products in the world.’
PROPOSED VISION
EXISTING MISSION STATMENT“To promote the vitality and well being of
all individuals by supplying the highest quality, most wholesome foods available.”
Customer Products/ Services Markets
Yes(individuals) Yes(healthy food) No
Technology Concern for survival or growth
Philosophy
No No Yes (highest quality food)
Self-concept Concern for public image
Employees
Yes (all individuals) No No
PROPOSED MISSION
‘To serve customers with superior organic food, customer focused service and continuous
innovation in the world while generating long term profitable growth for shareholders and
contribute for the welfare of society .’
9 COMPONENTS OF MISSION STATEMENTCustomer Products/ Services Markets
Yes Yes(organic) Yes (world)
Technology Concern for survival or growth
Philosophy
No Yes Yes (highest quality)
Self-concept Concern for public image
Employees
Yes(innovation in the world)
Yes(welfare of society) Yes
INTERNAL ASSESSMENT
STEP 3:
FINANCIAL RATIO ANALYSISINCOME STATEMENT RATIOS 2006 2007 2008
Gross profit 34.9% 34.8% 34.0%Net profit margin 5.7% 4.5% 3.0%Direct stores opening expenses 72.6% 74.5% 77.9%Per-opening and relocation cost 1.9% 3.1% 3.4%Earning per share(EPS) 1.46% 1.3% 0.82%
•Gross profit set by company to achieve 34%
•Net profit margin averaging 5% of sales.
•Direct stores opening expense as a
percentage of gross margin shows large
consumption of gross profit.
•Pre-opening and relocation as a
percentage of gross margin shows minimal
consumption of gross profit.
•EPS favorable from 2006-2007 but drops to
insufficient level in 2008.
FINANCIAL RATIO ANALYSIS
•Current ratio declining gradually indicating
cash and receivables are insufficient to
cover current liabilities.
•Debt to asset ratio shows rapid increase in
debt from line of credit and long term loans
and capital leases.
•Debt to equity ratio show debt averaging
50% of the equity stake in assets then
increase to 120%.
•Inventory turnover shows monthly
average to sell its merchandise inventory.
Whole food managementRegional Presidents
ORGANIZATIONAL CHART
Executives officers
ORGANIZATIONAL CHART
Flat Non hierarchical Decentralized Lean, not heavy management Open communication.
ORGANIZATIONAL CHART
RECOMMENDED ORGANIZATIONAL CHART
MARKET POSITIONING MAP
MARKET SHARE AND OTHER COMPANIES
17%
7%
64%
9% 2% 1%
SHAREthe kroger cosupervalu incothers(walmart,fresh and easy,mom & grocer)safeway incwhole food market inc.adil group
The value-added pricing strategy Keep customers loyal by providing service the customers
can’t find anywhere else. Market strategy:
expansion and acquisition. Forward integration Horizontal integration
STRATEGY ANALYSIS
Promotional strategy Discounting Advertising
Television advertising. Print advertising. Online advertising(social network marketing and Google ad
words). Billboard advertising.
Website’s design Cooking tips. Company blogs. Product and stores locators. Company and investor information. Links to whole foods’ pages on social networking sites.
STRATEGY ANALYSIS
PROMOTIONAL STRATEGYSocial media
Gain awareness about our prepared meals and post what are the meals are that day.
Mobile apps
PROMOTIONAL STRATEGY
Radio Television/online:
“values matter”:documentary style TV spots feat supplier, fisherman etc. Modern family, jimmy kimmerl, the voice. You tube:22 video ads
Print: Magazines and newspapers. Men’s health, rolling stone, new York times
MEDIA MIX
VALUE CHAIN
CORE VALUES Selling the highest quality natural & organic products available
Satisfying & delighting our customers
Supporting team member happiness & excellence
Creating wealth through profits & growth
Caring about our communities & our environment
Creating ongoing win-win partnerships With our suppliers
Promoting the health of our stakeholders Through healthy eating
education
STRENGTH
• Brand recognition.• Good quality.• Huge selection/variety.• Large, customized stores.• Organic market leader• Good distribution system.• Positive employee environment.
WEAKNESS
• Concentrated just on US market.• Relative slow growth.• Limited number of suppliers.• Advertising budget is very low.• Large perishable inventory.• Low market share.
IEF MATRIXStrength •Brand recognition.•Good quality.•Huge selection/variety.•Large, customized stores.•Organic market leader•Good distribution system.•Positive employee environment.
Weight0.100.140.100.070.050.050.07
Rating4444333
W.Score0.4
0.560.4
0.280.150.150.21
Weakness•Concentrated just on US market.•Relative slow growth.•Limited number of suppliers.•Advertising budget is very low.•Large perishable inventory.•Low market share.
0.100.050.100.100.060.011.00
121221
0.10.10.10.2
0.120.01 2.78
STEP 4:EXTERNAL
ASSESSMENT
OPPORTUNITIES
Higher quality product Popularity of healthy living Cross over of traditional grocers Promote and build brand identity with organic food Expend prepared food Higher demand for organic product Consumer health benefit through media Discount product line for lower income segment International expansion
THREATS
Increased price pressure from fresh food Increase competition Increasing inflation Growth relies on new stores and acquisition New entrant Economic condition could effect good will Expanded prepared food
EF MATRIX
COMPETITORS
COMPETITIVE PROFILE MATRIX
STEP 5:STRATEGY FORMULATION
Opportunities1. Higher quality product2. Popularity of healthy living3. Cross over of traditional grocers4. Promote and build brand identity with
organic food 5. Expend prepared food 6. Higher demand for organic product7. Consumer health benefit through media8. Discount product line for lower income
segment 9. International expansion
Strength1. Brand recognition.2. Good quality.3. Huge selection/variety.4. Large, customized stores.5. Organic market leader6. Good distribution system.7. Positive employee environment
SO strategies1. Promote and build brand identity for
brand recognition. (S1,O4)2. Use experience to successfully expend
in to international market. (S4,O9)3. Growth in prepared organic food.
(S5,O5)
SWOT MATRIX
WEAKNESS1. Concentrated just on US market.2. Relative slow growth.3. Limited number of suppliers.4. Advertising budget is very low.5. Large perishable inventory.6. Low market share.
Opportunities1. Higher quality product2. Popularity of healthy living3. Cross over of traditional grocers4. Promote and build brand identity with
organic food 5. Expend prepared food 6. Higher demand for organic product7. Consumer health benefit through
media8. Discount product line for lower income
segment 9. International expansion
WO strategies1. Creating a prepared food section
would appeal to more people because of convenience.(W2,O8)
2. If cost for organic farmers are lowered, produced more and arrange a selling price deal between farmers and whole foods.(W2,O6)
Strength1. Brand recognition.2. Good quality.3. Huge selection/variety.4. Large, customized stores.5. Organic market leader6. Good distribution system.7. Positive employee environment
THREAT1. Increased price pressure from fresh
food2. Increase competition 3. Increasing inflation4. Growth relies on new stores and
acquisition5. New entrant6. Economic condition could effect
good will 7. Expanded prepared food
ST strategies1. Concentrate on strength
and what will separate them for all the other stores in order to maintain consistent growth rate.(S2,T4)
2. Promote brand image with quality and value for money.(S1,O1)
WEAKNESS
1. Concentrated just on US market.2. Relative slow growth.3. Limited number of suppliers.4. Advertising budget is very low.5. Large perishable inventory.6. Low market share.
THREAT1. Increased price pressure from
fresh food2. Increase competition 3. Increasing inflation4. Growth relies on new stores and
acquisition5. New entrant6. Economic condition could effect
good will 7. Expanded prepared food
WT strategies
1. Internationally expansion with prepared food. (W1,T2,T7)
2. Expand advertising budget to increase market share for meet competition. (W4,W6,T2)
SPACE MATRIXFP average 4.14SP average -2.71CP average -3.00IP average 4.57
X axis 1.57Y axis 1.43
SPACE MATRIX
Defensive
ConservativeAggressive
Competitive
BOSTON CONSULTING GROUP (BCG) MATRIX
Revenue % Profit % Relative market share
Industry growth rate
33.8% 43.2% 0.70 +15
19.1% 20.4% 0.09 -5
47.1% 36.4% 0.21 +10
(BCG) MATRIX
INTERNAL - EXTERNAL (IE) MATRIX Classification of Cells: I, II, IV classified as: Grow & Build Backward, Forward, or Horizontal Integration Market Penetration Market Development Product Development
III, V, VII classified as: Hold & Maintain Market Penetration Product Development VI, VIII, IX classified as: Harvest & Divest Retrenchment Divestiture
IFE MATRIX
GRAND STRATEGY MATRIX
GSM
QUANTITATIVE STRATEGIC PLANNING MATRIX
Range for Attractive Scores: 1 = Not attractive 2 = Some what attractive 3 = Reasonably attractive 4 = Highly attractive
QSPM
RECOMMENDATION
Product DevelopmentWhole foods are competing in high competitive environment from 2 kind of competitor general store and organic store and as per QSPM result both are highly attractive but Product Development is more just life prepared food, prepared diet food, recipe magazine, and health guider etc..
STEP 6:STRATEGY
IMPLEMENTATION
EPS/EBIT ANALYSIS
EPS/EBIT CHART ANALYSIS
100 150 200 2500102030405060708090
100
54
6976
66
8493
60
7583
C.S.FD.FC.F
WHOLE FOOD MARKET INC.PROJECTED INCOME STATEMENT
WHOLE FOOD MARKET INC.PROJECTED BALANCE SHEET
PROJECTED FINANCIAL RATIOS
WHERE DID THE MONEY GO?
STEP 7:STRATEGY
EVALUATION
BALANCED SCORECARD
STEP 8:
CONCLUSION
EXISTING STRATEGIES FOR 2009
Cutting in half the planned new store opening(30to15) Cutting discretionary spending by 50 percent Suspending its cash dividend Increasing the range of lower priced item Strengthening its value image Launched its whole trade product line
PROPOSED STRATEGIES Backward integration Increase marketing and goodwill to grow comparable
store Look for way to decrease upstream supply Private labeling Establish R & D project Expend online service