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In-depth Study on the SWOT Analysis of Whole Foods – With Company Overview

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Previously we looked into the Marketing Mix of Walmart, an American based general goods retailer. In this case study, we will analyse the SWOT Analysis of Whole Foods.

Whole Foods Market is one of America’s most successful health food retailers. They have over 500 outlets selling the greatest quality natural and organic items. They have always produced and captured value by informing customers about the ingredients in their goods.

Marketing is a fluid idea that changes in response to current consumer trends and interests. Whole Foods’ successful marketing strategies have allowed them to expand into new areas throughout the world. If you want to learn more about today’s effective marketing, attend our Free MasterClass on Digital Marketing 101, led by Karan Shah, CEO and Founder of IIDE. 

Before we delve into the SWOT Analysis of Whole Foods, let’s have a look at the firm, its history, financial situation, products, and competitors.

 

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About Whole Foods

 

Whole Foods Market, Inc. is an American multinational supermarket chain, founded on September 20, 1980. It has locations in the United States, Canada, and the United Kingdom. 

After John Mackey and Renee Lawson Hardy, proprietors of the SaferWay health food shop teamed up with Craig Weller and Mark Skiles, owners of Clarksville Natural Grocery, the first Whole Foods store debuted in Austin.

Whole Foods sells products free from hydrogenated fats and artificial colours, flavours, and preservatives. The business is well-known for its organic options and is a USDA Certified Organic grocer in the United States.  

 

Quick Stats on Whole Foods
Founder John Mackey, Renee Hardy-Lawson, Mark Skiles, Craig Weller
Year Founded 1980
Origin Austin, Texas, United States
No. of Employees 91,000
Company Type Subsidiary; Parent – Amazon
Market Cap N/A
Annual Revenue $385.06 Billion (2020)
Net Profit $21.33 Billion (2020)

 

Products of Whole Foods 

Whole Foods has successfully risen in the health food retail market by selling the following – 

  • Produce
  • Dairy & Eggs  
  • Meat 
  • Prepared Foods  
  • Pantry Essentials  
  • Bread, Rolls & Bakery 
  • Body Care  
  • Supplements.

 

Competitors of Whole Foods

These are Whole Foods major competitors – 

  • Publix Super Markets 
  • Trader Joe’s 
  • Walmart
  • Kroger 
  • The Fresh Market

 

Now that understood the workings and history of the company, let’s dive into the SWOT Analysis of Whole Foods.

 

SWOT Analysis Of Whole Foods

 

Infographics - SWOT Analysis of Whole Food | IIDE

Read the following SWOT Analysis of the Whole Foods Market group to find out what are the various factors that define the success of this firm currently and the factors that would be a change-maker for the company in future. 

 

1. Strengths of Whole Foods 

The following are Whole Foods strengths that have helped them establish a strong position in America as a reliable supermarket:

 

  • Brand Recognition – A company’s fate is completely determined by the image of its brand. Since its beginning, Whole Foods has maintained a strong brand image. It came in third place in the Reputation Institute’s annual ranking of the most dependable retailers. It aids Whole Foods in standing out from the competition and, as a consequence, translates its popularity into an ever-increasing customer base. The supermarket’s future has been secured by the profits and sales generated by such client demographics.
  • Motivated Workforce – Whole Foods Market has a highly engaged workforce as a result of its organisational culture. This is a big benefit since it allows the company to optimise output while lowering recruitment and training expenditures.
  • High-Quality Standards – Whole Foods has made it a mission to provide only the highest-quality food items in its supermarkets. Whole Foods has set the bar high by excluding substances that are typically found in other food merchants’ goods. Artificial flavours, sweeteners, colours, and hydrogenated fats are strictly forbidden. Fishing, farming, and ranching that do not satisfy the company’s high requirements are also prohibited.
  • Sturdy distributor system – Whole Foods has established a strong culture with distributors, allowing them to not only promote the company’s products but also spend in educating the sales crew to explain to customers how to get the maximum profit from the items.

 

 

2. Weaknesses of Whole Foods

Here are the weaknesses in the SWOT Analysis of Wholefoods:

 

  • Dependence on American Markets – Because Whole foods rely on American markets, it is at its most vulnerable. In 2015, it accounted for 97 per cent of all sales in the US market. It will not be sustainable if the American economy crashes owing to the global economy’s volatility. During the recession, the firm had to contend with reduced earnings. Its interests might be irreparably damaged if it is struck by another impending recession. In terms of international branches, it has only operated in Canada and the United Kingdom.
  • Consumer Perception – Due to overpricing and overcharging their customers, wholesalers faced dismal sales growth. Many people have reacted negatively to this. The general opinion among customers is that the firm purposefully offers them costly items. It was given the moniker “Whole Paycheck” since it is believed that the prices may swallow a consumer’s whole income. It has tarnished the brand’s reputation.
  • Limited network of suppliers – The firm has a very limited network of suppliers that satisfy Whole Foods Market’s quality standards. This weakness may obstruct the company’s ability to swiftly grow its activities. 

     

3. Opportunities for Whole Foods

The potential for Whole Foods Market is based on existing competition and the worldwide market. The feasible actions for business growth are outlined in this section of the SWOT analysis.

 

  • International Expansion – It is known that Whole Foods is overly reliant on the US market. It allows the firm to expand internationally and diversify its operating resources. Whole Foods has branches in Canada and the UK, but it needs to invest more to go further. It should also look to Europe and Asia as potential income boosters. Though it’s still under dispute internally, the margin of increase can be achieved if the plan is followed.
  • Diversification (365 Stores) – To combat the issue of pricey products, Whole Foods has created 365 by Whole Foods Market, which is a new low-cost market. It aims to provide individuals with nutritious and cheap meals daily. 365 by Whole Foods was designed to provide organic food options to the middle class and millennials. The stores are a fraction of the size of the original superstores. They are, nevertheless, complimentary items. For years, Whole Foods has been criticised for overpricing, and they’ve put a lot of money into this location to address those complaints.
  • Alliances – Amazon announced that it will buy Whole Foods Market and sell its items on its website. On August 28, 2017, the transaction was completed. This historic purchase has resulted in huge revenue growth and increased employee involvement for the firm.    

 

Whole Foods and Amazon Merge - SWOT Analysis of Whole Foods | IIDE

        

4. Threats to Whole Foods

The threats to Whole Foods business are based on the competitive food, technology, and climate. The most significant threats are:

 

  • Poor Publicity – As a result of how it handled its 2015 customer overcharging, the firm has received a lot of unfavourable press. A huge number of complaints were filed against the organisation as a result of this. A lawsuit was filed against the firm, which resulted in a settlement of $500,000. Since then, the company’s sales have slowed and received negative press.
  • Increasing Competition – Despite Amazon’s acquisition of Whole Foods, the business has not been able to keep up with competitors such as Walmart, which plans to surpass Amazon. Whole Foods is up against the stiff competition, with Target giving it a run for its money. Walmart and Target both use competitive pricing techniques to surpass Whole Foods, which has so far been unproductive.
  • Global warming – Global warming is a threat to Whole Foods. Climate change can modify or diminish food output considerably. As a result, this section of the SWOT analysis reveals that Whole Foods Market is confronted with substantial threats that are tough to manage or overcome.

 

On this note, we reach the end of the SWOT Analysis of Whole Foods. Let’s conclude this case study in the next section below.

 

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Conclusion

 

Whole Foods has been able to maintain its customers and revenues for many years and will continue to do so. They have done a good job of combating overpricing complaints by launching its new 365 franchises. It needs to expand internationally and invest in overseas markets.

The most crucial area in which the firm should spend is communications. Every firm has its ups and downs, but it is a terrible press relationship and damage control that damages enterprises. The firm only needs to improve its public relations management and will be well.

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If you enjoy detailed company research, check out our IIDE Knowledge site for more fascinating case studies. 

Thank you for reading this case study on the SWOT Analysis of Whole Foods. Don’t miss to leave your comments in the section below.

 

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