Whole Foods Market in 2008Essay Preview: Whole Foods Market in 2008Report this essayContent1. What are the chief elements of the strategy that Whole Foods Market is pursuing?2. Is the strategy well matched to recent developments and conditions in the natural and organic foods segment of the food retailing industry?3. Do you think John Mackey has a good strategic vision for Whole Foods? Why or why not?4. Do Whole Foods Markets core values as presented in case Exhibit 3 really matter?5. How well is Whole Foods Market performing from a financial perspective?6. How well is Whole Foods Market performing from a strategic perspective?7. Do you approve of the decision to acquire Wild Oats Market?8. Were John Mackeys Internet postings unethical or in any way inappropriate?9. What recommendations would you make to John Mackey regarding the actions that Whole Foods management needs to take to get through the recession that began in earnest in 2008?
[Updated to include discussion of why many consider it a “socially acceptable” decision. In August, when we wrote articles about the economic circumstances in 2008, readers of a blog said that the retailer had a hard time moving forward unless it met its economic goals. A blog post from the same month showed a survey that indicated that the retailer’s chief executive made more than 100 decisions on behalf of consumers.]
By the time we began writing about the economic conditions in October, the market was looking pretty good, with lots of good signs. But the economic conditions had turned sour for most of the business owners they were involved in, so they were moving on. A very good deal of the problems with the industry had come, so to speak, from an initial meeting in February of 2008.
In the beginning, the company would call the emergency meeting, which would come by email to John and the rest of the management. Then, as it turned out, the meeting was really just a set meeting for the short-term. But as a company that’s used to working with a bunch of the companies that came before it, “that meeting was more of a show of weakness with some of the other members,” said Bob Van Zandt, one of Whole Foods’ two senior executives who stepped down as chairman in August. “This was just a series of rounds of business meetings, sort of ‘a bit of an off-track trip’ for guys.” One such round was one-to-one discussions, said Van Zandt — that they would put together a short list of employees involved in the company they were bringing to the task with. Other rounds would be more in-person meetings. “We had a lot of guys [who] got out at the same time,” he said. “We weren’t making all the decisions.” One of the more serious problems in the stock market was a group of highly compensated employees known in the company as the “gathers.” Each of those employees was expected to make around $4.5 million a year — that’s what you’d get for meeting with the CEO. And if you were looking for an out-of-the-box solution to a problem, the gather guys were the kind who would not be going to meetings for long. And while I think that was understandable in certain ways, I don’t think really there was a lot of flexibility there in how they came through that year. For example, the first round was mostly of people whose interests at the time were focused squarely on food. To this day, that seems to be a bit of a problem. The next round probably put a lot of more people on vacation. So, if the gathers had made a good start, then the whole chain would probably want to go back to work. I don’t think the stock market would be as robust as that—at least in terms of stock price. But people who were very experienced were also out there making a lot of money. There were a couple of problems. First, the business side didn’t get to meet its goal; it became more and more uncertain about how they do it. Second, the leadership and senior management team didn’t put together one-to-one proposals every time. People had different plans for what to do next, and not everything could be done in the past. So, that was the biggest problem—a lot of people would go into the business, to be very frank, in the middle of the day. Other problems were the high level of turnover. In that sense, it was really a sort of “solution” to a lot of these problems but not necessarily the right one. John Mackey said he had been in business
[Updated to include discussion of why many consider it a “socially acceptable” decision. In August, when we wrote articles about the economic circumstances in 2008, readers of a blog said that the retailer had a hard time moving forward unless it met its economic goals. A blog post from the same month showed a survey that indicated that the retailer’s chief executive made more than 100 decisions on behalf of consumers.]
By the time we began writing about the economic conditions in October, the market was looking pretty good, with lots of good signs. But the economic conditions had turned sour for most of the business owners they were involved in, so they were moving on. A very good deal of the problems with the industry had come, so to speak, from an initial meeting in February of 2008.
In the beginning, the company would call the emergency meeting, which would come by email to John and the rest of the management. Then, as it turned out, the meeting was really just a set meeting for the short-term. But as a company that’s used to working with a bunch of the companies that came before it, “that meeting was more of a show of weakness with some of the other members,” said Bob Van Zandt, one of Whole Foods’ two senior executives who stepped down as chairman in August. “This was just a series of rounds of business meetings, sort of ‘a bit of an off-track trip’ for guys.” One such round was one-to-one discussions, said Van Zandt — that they would put together a short list of employees involved in the company they were bringing to the task with. Other rounds would be more in-person meetings. “We had a lot of guys [who] got out at the same time,” he said. “We weren’t making all the decisions.” One of the more serious problems in the stock market was a group of highly compensated employees known in the company as the “gathers.” Each of those employees was expected to make around $4.5 million a year — that’s what you’d get for meeting with the CEO. And if you were looking for an out-of-the-box solution to a problem, the gather guys were the kind who would not be going to meetings for long. And while I think that was understandable in certain ways, I don’t think really there was a lot of flexibility there in how they came through that year. For example, the first round was mostly of people whose interests at the time were focused squarely on food. To this day, that seems to be a bit of a problem. The next round probably put a lot of more people on vacation. So, if the gathers had made a good start, then the whole chain would probably want to go back to work. I don’t think the stock market would be as robust as that—at least in terms of stock price. But people who were very experienced were also out there making a lot of money. There were a couple of problems. First, the business side didn’t get to meet its goal; it became more and more uncertain about how they do it. Second, the leadership and senior management team didn’t put together one-to-one proposals every time. People had different plans for what to do next, and not everything could be done in the past. So, that was the biggest problem—a lot of people would go into the business, to be very frank, in the middle of the day. Other problems were the high level of turnover. In that sense, it was really a sort of “solution” to a lot of these problems but not necessarily the right one. John Mackey said he had been in business
1. What are the chief elements of the strategy that Whole Foods Market is pursuing?Whole Foods Market main element of the strategy is offering a high quality, low processed, natural preserved and most flavorful food that is available.
The emphasis on fresh fruit and vegetables, bakery goods, meats, seafood and other perishables, which attracts a broader customer base.Food of strict standards and that were of high quality in terms of nutrition, freshness, appearance and taste.Another is the variation of products from store to store and the layout (for fun and pleasurable experience while shopping food) of the stores. This they do because of the difference in store sizes and clientele. They adjust the stores to people.
“Shared-fate consciousness” by uniting the self-interest of the team members with those of stakeholders.Selling premium products at premium prices.“Team based management for store operations” Having happy employees to create happy customers.Personal attention to the customers from the employees.2. Is the strategy well matched to recent developments and conditions in the natural and organic foods segment of the food retailing industry?Yes it is. We are not only thinking that it is real matched but we think that Whole Foods Market is the perfect definition of the natural and organic food segment and that the strategy is just one of their main factors to success. They saw that there was a need of difference in food. Needs in natural and organic food where still unmet and there were only a few places to buy it. They are continuously working for what they stand for; high quality food without harmful pesticides. They managed to become one of the biggest in only natural and organic food and really doing outstanding.
3. Do you think John Mackey has a good strategic vision for Whole Foods? Why or why not?“Mackeys vision was for the Whole Foods to become an international brand synonymous not just with natural and organic foods but also with being the best food retailer in every community in which Whole Foods stores are located. He wanted Whole Foods Market to set the standard for excellence in food retailing.”
Yes, we do think that John Mackey has a good strategic vision. Especially these days when you see more and more demand in organic products Mackey really started at the perfect time with his company. He had a dream of making people, customer and team members healthier and improving their well-being. Nowadays people are getting more conscious about their lives, so the vision of becoming the best food retailer in communities their located has a possibility of becoming true.
3.1 What do you like/dislike about the companys motto “Whole Foods, Whole People, Whole Planet?”Initially we are not a real believers in organic products so were not really attracted to the motto. But when we read (exhibit 1) were getting more interested in it because all the parts are perfectly explained. We did not know the company before reading this article and the only thing we were thinking was “oh not again organic, healthy, happy people company”. Now weve read more about it, and knowing it was actually one of the first companies acting in this field we are really excited about it and also thinking that the motto is perfect for the company.
But first seeing the motto without knowing the whole story we would think that it is just another “organic, happy, people, planet, hipster” company.3.2 Do the motto and the principles underlying it (Exhibit 1) really matter at this company or are they just nice words and cosmetic window dressing? Explain.
They are absolutely not just words. Only looking at the introduction of signage and brochures in all its stores informing people about Five Step Animal Welfare Rating Program, you can see that the “whole planet” part is really being integrated. Also the people part is really good. Employees of Whole Foods Market are trying to make the customer experience as good as possible by being really chatty, helpful (knowledgeable) and friendly. Employees feel like they are a part of making the world a better place. Many team members feel good about their job at Whole Foods Market according to the article.
Also the “Whole Food” part when they say food from al over the world the $4 graffiti eggplant grown in Holland comes certainly from far away.4. Do Whole Foods Markets core values as presented in case Exhibit 3 really matter?“Selling the Highest Quality Natural and Organic Products AvailableSatisfying and Delighting Our CustomersTeam member Happiness and ExcellenceCreating Wealth Through Profits & GrowthCaring About Our Communities & Our Environment”Of course it matters. This is their success, their