Whole Foods Market 2010 (Essay Sample)

Unit: Title: Whole Foods Market 2010 Case Study Analysis Kaplan University School of Business MT460 Management Policy and Strategy Author Professor: Dr. Date Name of Case Study: Whole Foods Market 2010 Company Name: Whole Foods market Topic of the Week: How to Grow in an Increasingly Competitive Market Synopsis of the Situation Right from its inception, Whole Foods Market have enjoyed tremendous growth in the food industry. With the need for the healthy lifestyle among the populace in the USA and around the world, the firm quickly found its way into the top of the industry. Another factor that positively contributed to its success was its respect for the environment. However, things are not the same anymore. The firm has witnessed woes for last few days. It has to work to eliminate the problems (Hill & Jones, 2013). Otherwise, they could ruin its reputation. In the recent years, the firm has witnessed declining sales due to its high priced commodity. This approach has not only lowered its revenues but has also given its competitors a competitive advantage. Trader Joe’s firm have been the primary beneficiary of this high prices. It has been able to lure clients with products offered at a lower price. If Whole Foods Market fails to provide remedy to this problem, it could be soon its competitive edge to rival firms, particularly Trader Joe’s firm. The high prices do not only impact the profitability of the business but also have ruined the reputation of the enterprise. California residents have termed the business “Whole Paycheck” a sign that the high prices that the company sells its products are pushing customers away (Fraser, 2013). This occasion is not the only one of its kind. On other many times, willing customers get pushed away by the prices that this venture is offering its commodities. The high prices have given the retail giant Walmart Inc. a chance to venture in this business and offer its products at a lower price. The firm ought to correct its pricing strategy as attempts to match is prices with that of its competitors have failed. Alternative Solutions 1. The company should minimize the cost of operations. Such costs including electricity and food processing costs contribute to its high prices as the company takes the costs down to the customer. This solution is cheap to implement and will help the company lower its costs of processing and selling the products. 2. The firm should source for Organic products from Africa where such products are cheap. Africa has abundant natural food products as the use of chemicals to produce food products is not yet developed in this continent. The firm can obtain cheap products from this continent and hence sell them cheaply to customers. 3. The company should increase the quality of its products to a level that is far beyond its competitors. Such high-quality products are readily distinguishable from those of rival businesses and hence most of the buyers will buy them whether or not they are highly priced. The high-income earners will easily buy them as they care most about quality and not cost. Selected Solution to the Problem The firm should look for new sources of its food products in Africa to obtain such products at lower prices. Its current sources In USA have proved to be too costly and have negatively affected the firm. Sourcing the materials at a high price implies that the company has to pass the cost to the customers. This move is driving customers away. Getting supplies from Africa could help the company obtain the products at lower costs, move that will enable it to sell such products cheaply. This approach is the best as it will assist the company to defeat its rivals using the minimum cost while creating a new source of goods. Africa presents an enormous place where the firm can get such products. Nations such as the Democratic Republic of Congo offer tremendous potential for the enterprise to get such products. In areas where such products are not available, the company could establish plantations to lower the costs of such materials even further. Such a move will give the company a chance to control the quality of its products, hence eliminating legal lawsuits that could emerge due to its products. This step could enable the firm to increase its market share further and hence profitability. Implementation To get food products at a lower price from Africa, I would first send representatives to Africa. They will have a task of identifying areas where the firm can obtain its products. They should visit all African nations that produce the products and document their findings. The documenting will involve availability, price and other costs such as shipping and local taxes. This move will help the firm make decisions on whether the supply is reliable and whether it can switch to obtaining products from this continent. I would take all the data gathered and used it to perform the analysis. Once I find that the venture is viable, I would get my personnel ready to implement the plan. I would wait to form the current contract with suppliers to end and inform them one month before that the company will end the contracts with them once the term expires. Before the expiration of this term, I would send sales representatives to the best area identified to strike agreements with the suppliers. Once the agreement gets signed, the firm will start obtaining the products from this new region. Recommendations and Conclusion Lowering the cost of operations could be a good choice as well. With the reduced cost of operations, the firm can present the products at a price that customer could be happy. Lowering the cost of operations involves using labor efficiently and using the latest technology to produce products. This move will cost the small firm money to implement while making ...