Whole Foods Market Essay Example for Free

Whole Foods Market Essay John Mackey cofounder and Chief Executive Officer (CEO) founded Whole Foods in 1980 with the purpose of providing organic foods to the grocery shopping public. This started a movement over the next 30 years that has brought organic foods to the common shoppers in many markets around the U. S. that had only been previously serviced by smaller health food stores or by their local grocery chain. The success of Whole Foods moving forward will be how they can succeed and maintain their profitability when unemployment remains high and Americans have less disposable income. This essay will look at several factors of Whole Foods, including latest trends, the competitive environment in the grocery industry, environmental threats, SWOT analysis of the business operations and strengths that must be leveraged to maintain a competitive advantage. Trends in the Organic Foods and the Impact on Whole Foods As the public has become increasingly aware of the potential negative impact of additives, preservatives, and pesticides in their food, organic food grown in a natural way without steroids, pesticides and minimum preservatives offers consumers who are concerned about their food a different choice. Prior to 1990, there was no government standardization or definition as to what could or could not be classified as natural food. The 1990 passage of the Organic Food Production Act, â€Å"started the process of establishing national standards for organically grown products in the United States† (Thompson, Strickland, Gamble, 2009). This was followed up in 2002 when the U. S. Department of Agriculture provided further standardization by establishing standards for the labeling of products that were categorized as organic. This standardization worked to alleviate customer concern and skepticism in regards to what was being called organic on the food store shelves. In increasing overall customer confidence, consumers knew that when they purchased a product labeled as organic, they were getting what they paid for. Public health concern over what is done to grow, process, and package the food supply as well as the standardization and classification of organic food has create a niche market for stores that focus on supplying organic foods and earth friendly cleaning supplies to consumers. Whole Foods has been able to capitalize on this growing niche market by strategically locating their stores through an aggressive expansion into new markets through the last thirty years. Acquisition of competitors has also allowed Whole Foods to absorb the competition and gain access to new markets. As long as consumers are able to afford the premiums cost in purchasing organic foods, the market outlook is positive. Application of Porter’s 5 Forces Model The grocery industry is a competitive one, with many competitors and very slim profit margins. Box store chains such as Wal-Mart and Target leverage their high volume purchasing power to purchase products from suppliers at the absolute lowest price. These compete with other grocery chains that typically operate on a Regional level, such as Harris Teeter, Food Lion, and Lowes (and many, many more). All of these stores compete aggressively to earn customer loyalty and drive volume of sales. Whole Foods is able to compete as it markets its goods and services to a very niched market that afford the premium of purchasing organic foods. When applying Porter’s Five-Forces model, one can see how this company has been able to successfully grow and leverage their products and services. Competitive Pressures Created by the Rivalry among Competing Sellers: Whole Foods has differentiated themselves from a very crowded market by offering a unique product to a very select consumer base. While stores such as Wal-Mart focus on serving the masses with their grocery offerings, Whole Foods targets it products to a customer base that can afford to pay higher premiums for a product that they believe is healthier and safer to consume. The growth of Whole Foods has allowed it to leverage its purchasing power with suppliers that allows for Whole Foods to pass on savings to consumers and offer more competitive prices than competitors. As in the case with the Wild Oats acquisition, Whole Foods can squeeze the margins of its competition then buy them out as they begin to fail, gaining access to new markets and new customers. Competitive Pressures Associated with the Threat of New Entrants: Whenever a business model has proven to be successful, it is not long before similar entrants to the market appear. One organic food supermarket chain local to North Carolina, Fresh Market, has focused on smaller sized stores located in areas underserved by Whole Foods. Fresh Market focused its business model on locating its stores near university campuses and other areas where residents had higher levels of disposable income. Now Fresh Market is expanded to more markets easily served by its distribution centers that are centrally located to the entire East Coast of the United States (the I-95 and I-40 corridors). As Whole Foods is both well established and has significant cash reserves, it enjoys a competitive advantage over smaller chains such as Fresh Market when it looks to penetrate new markets with new stores because the necessary capital is on hand to do so. Competitive Pressures from the Sellers of Substitute Products: It can be expected that Wal-Mart and other competitors seek to steal business from Whole Foods by keeping their prices low, locating stores in proximity to whole foods stores, offer similar organic products for less and potentially conducting studies that show organic foods offer no additional health benefit or decrease risk to consumers than non-organic foods. The question also becomes, how loyal will Whole Foods customers continue to be when food prices begin to soar as oil and gas hit all time highs and the unemployment rate continues to hover close to 10%? Will customers need to stretch their dollars and go across the street to the competition or will they be loyal to Fresh Market and pay the premium? Competitive Pressures Stemming from Supplier Bargaining Power and Supplier-Seller Collaboration: Whole Foods is able to leverage its pricing structure with suppliers more than competitors because of the volume of products it sells. In fact, it can be said that the growth of Whole Foods has fueled the growth and financial success of its suppliers. This relationship has allowed Whole Foods to develop relationships with key suppliers and logistics providers that new and smaller organic food chains are unable to compete with. Competitive Pressures Stemming from Buyer Bargaining Power and Seller-Buyer Collaboration: As arguably the largest buyer of organic products, Whole Foods is able to leverage relationships from suppliers. When a new Whole Foods stores opens it â€Å"takes [in 2007 dollars] about $850,00, to stock a store with inventory, a portion of which was financed by vendors† (text citation). By be able to leverage it suppliers in this fashion, Whole Foods can mitigate financial risk and burden. Most Significant Environmental Threat and Whole Foods Combat The largest threat to the profitability to Whole Foods is the state of the current economy and the rise in commodities prices as a result of some of the highest gas prices on record. As consumers have less discretionary income, will they afford to continue shopping at grocery stores that charge a higher premium? As gas prices rise, so to does the cost of growing, harvesting, and shipping products to the store. Gasoline is used in each of the steps from the farmer growing and harvesting the food, to the large trucks that transport it, to the energy required to supply the packaging and the electricity in all of the stores. The rise in fuel will drastically reduce profit margins and may require price increases. To combat the rise in energy costs, it might be possible for Whole Foods to invest more in green energy. Already upgrading their vehicles to run on bio-diesel, it might be possible for Whole Foods to place solar farms on the roofs of their buildings much like Kohl’s Department Stores have. This would be in line with their corporate governance and mission statement and would allow them to harness the power of the sun to sell energy back to energy producers thereby reducing overall costs while taking advantage of the government green energy tax credits currently in place. SWOT Analysis Strengths (Internal): Cash Rich – Debt to Capital Ratio of 13. 97% (industry Average 37. 88%), Positive Earnings of $. 51 per Share, Strong Distribution Network, Supplier Relationships, Loyal Customer base, Motivated Work Force, High Rate of Revenue per Employee of $206,849. 70 (TD Ameritrade, 2011). Weaknesses (Internal): Unionization, Cowboy Leadership-John Mackey, Average Store Size 37,600 square feet (down from 51,500 in 2008), Average Store Age is Nine Years (TD Ameritrade, 2011). Opportunities (External): Increased Growth in Overseas Markets, Store Expansions in the U. S. , Perceived Shareholder Value, Ability to Borrow Money at Favorable Rates due to Credit Rating. Threats (External): Cap and Trade, Rise in Oil Prices, Drastic Reductions in Real Estate Values, Consumer Income and Unemployment, Government Regulation and Taxation, Government Mandated Health Care, Drought and Weather Related Issues that Affect Supply. Sustaining Competitive Advantage Whole Foods can use it strengths and opportunities to achieve a sustained competitive advantage in the marketplace by increasing their presence in markets in both the U. S. and abroad. The company is moving forward slowly with expansion plans with only one store currently under development as of 9/26/10 (TD Ameritrade, 2011). With real estate at all time lows in most markets, the company could leverage some of the equity and cash it currently has on hand to purchase real estate where future stores could be opened. With the instability and uncertainty in the economy investing in real estate would allow for future growth or future profits. Whole Foods should also continue to find new opportunities to grow their business to non-believers in the organic way. By sanctioning health outcome studies that look at the long term health implications of eating foods high in preservatives, steroids, pesticide content, etc. , it is possible Whole Foods might prove overall better health outcomes when people go organic. There is also risk associated with sanctioning that sort of study as it might prove to be that organic foods offer no better health outcomes than traditional foods. The risk reward would be fantastic should organics be found to provide better health outcomes. Store sales would skyrocket and the general population would be more willing to purchase organic foods at a higher premium should it prove to be safer than traditional food. Summary When one researches the financials and fundamentals of Whole Foods, little negatives are observed or found. When comparing these financials and fundamentals to other Grocery Store Chains, Whole Foods out performs the competition in nearly every single category. At the close of the markets on 4/21/2011, Whole Foods stock closed at $66. 30 per share, close to its 52 week high and dividends are being paid to investors at an incredible $. 40 per share (TD Ameritrade, 2011). John Mackey, though often criticized for his flamboyant style and leadership, has found a successful way to reach customers with a unique product. Whole Foods is a leader and a revenue generator far above others in its class. References TD Ameritrade. (2011, April 16). Research and Ideas. [Chart]. WFMI Overview and Valuation. Retrieved April 23, 2011 from https://wwws. ameritrade. com/cgi-bin/apps/Main Thompson, A. A. , Strickland, A. J. , Gamble, J. E. (2010). Crafting and executing strategy: The quest for competitive advantage: Concepts and cases: 2009 custom edition (17th ed. ). p. 8,New York, NY: McGraw-Hill-Irwin

Did Attitude Shape Catharine Parr Traill and Susanna Moodie Success as

Back in the 1830’s when it was unimaginable to journey for months to a foreign country so uncultivated; two naà ¯ve sisters did just that. The Backwoods of Canada is a straightforward, realistic account complied of letters written back home of Catharine Parr Traill’s first years in Canada. Roughing It in the Bush is a witty, autobiographical memoir written by her younger sister, Susanna Moodie. Their attitude to becoming pioneers was shaped by their temperaments and circumstance. Catharine’s attitude is one quiet acceptance and is reflected in her no-nonsense writing, whereas Susanna’s attitude first appears to have an edgier, less optimistic outlook on her new homeland, but she covers it up with a dry sense of humour in style and dialogue when reflecting on her Canadian experience. Upon examination, we first must look at the sisters’ temperament and attitude towards life. Their attitude on life comes out in their writing and we can sense how they would perceive their new homeland, Canada in the 1832. Catharine, the elder by 23 months was considered to be the â€Å"sweet-tempered and placid, was her father’s favourite child,† and Susanna, the youngest, â€Å"was the impulsive and defiant [one], with a wicked sense of humour† (Gray, 17, 18). Both sisters’ traits are clearly exposed in their approach to starting a new life in Canada. Even before moving to Canada, it was Susanna’s passion for life and her new baby that energized Catharine and Thomas to ‘get involved’, get married and to emigrate with Susanna and her family, but it was Catharine’s methodical calmness that got Susanna through the valleys and peaks in actually moving to Canada ( 48). Catharine and her husband were at an advantage over her sister when they first arrived in Canad... ...arine wrote with a no-nonsense positive style to assist women embarking on immigrating to Canada. Susanna wrote with humour and frankness to cover up her disgust and disappointment and to warn genteel women of the hardships of becoming pioneers. After researching these two sisters’ biographies, I realize that they both had fortitude beyond what I would be able to endure if I were in either of their shoes. Works Cited Parr Traill, Catharine. â€Å"The Backwoods of Canada.† An Anthology of Canadian Literature in English. 3rd ed. Ed.Donna Bennett, and Russell Brown. Don Mills, ON:Oxford, 2010, 102-108, Print. Moodie, Susanna. â€Å"Roughing It in the Bush.† An Anthology of Canadian Literature in English. 3rd ed. Ed.Donna Bennett, and Russell Brown. Don Mills, ON:Oxford, 2010, 102-108, Print. Gray, Charlotte. Sisters In The Wilderness. Toronto: Penguin, 1999. Print

Pollution in New York

Alberto A. Ortiz Bio 112 May 13, 2010 Pollution is all around us, everywhere we go, every day we experience some sort of pollution. Babies in the womb are more vulnerable than their mothers to DNA harm from air pollution, in spite of the additional protection that the placenta is thought to supply in removing toxins. In a study of babies and their mothers in New York City, scientists found that babies had accumulated a relatively high amount of mutations, and they connected the mutations to vehicle emissions. The babies also had more toxins from secondhand smoke than their mothers, who didn’t even smoke. This information is listed in Environmental Health Perspectives. For many years, scientists have believed that a fetus may be more susceptible to toxins than an adult. Yet, new research among a handful of large studies has analyzed the genetic effects of pollution. It is not known what the health effects of this DNA damage, if any, are for newborns. Exposure to these types of pollutants and tobacco smoke has been linked to increased risk for cancer in adults. This finding raises concern about fetal susceptibility and underscores the importance of reducing air pollution,† says Frederica Perera, who led the study at the Columbia Center for Children’s Environmental Health in New York City. The study included 265 pairs of nonsmoking African-American and Latina mothers and newborns in New York City. The researchers collected cord blood samples from the babies at the time of delivery and blood samples from the mothers a day after giving birth. Mothers and newborns had the same level of DNA damage from air pollutants, but the researchers estimate that the fetus is exposed to a ten-fold lower dose of pollutants than the mother because the placenta serves as a filter. Thus, fetuses appear to be particularly susceptible to environmental toxins and may not be able to clear them from their bodies or repair damaged DNA. The finding that newborns had higher levels of cotinine, a byproduct of nicotine, in their blood than did their mothers reinforces he concern that babies are more affected by secondhand smoke. The scientists were able to measure the level of DNA damage from air pollutants in mothers and newborns by analyzing stretches of mutated DNA, called biomarkers, that have been associated with exposure to diesel emissions and other air pollutants. In a previous study of Caucasian women and their newborns in Krakow, Poland, Perera and her colleagues found similar prenatal susceptibility to air pollution. Because New York City has much lower levels of pollution than Krakow, they wanted to see if the same damage occurred. New York City Mayor Michael Bloomberg has put forward legislation, which will provide the first comprehensive overhaul of the New York City Noise Code in over 30 years. Noise is the number one complaint to the City’s 311 citizen service hotline, currently averaging nearly 1,000 calls a day. The proposal provides a flexible environment to keep New York’s businesses thriving while addressing the number one quality of life complaint in New York. Mayor Bloomberg said that his new proposal, which was announced in June 2004, was the first overhaul of the Noise Code in over 30 years and would maintain the City’s vibrancy by balancing the need for construction, development and an exciting nightlife with New Yorker's well deserved right to peace and quiet. â€Å"Building on the success of our enforcement initiative, Operation Silent Night, we are proposing a comprehensive revision to the noise code that will make New York quieter and more livable without stifling growth,† the Mayor added. The new Noise Code will remove outdated code sections and replace them with ones that use the latest acoustic technology and will provide for flexible and reasonable enforcement. The new code provides updated and sensible means of limiting noise from construction sites located near residential neighborhoods. By establishing uniform best management practices for all work sites, using greater discretion in granting permits for night and weekend work and mandating ‘noise management plans’ that include portable sound barriers, noise jackets for jackhammers at all construction sites the code will decrease noise pollution. Neighbors apply special lotions after showering because their skin burns. Tests show that their tap water contains arsenic, barium, lead, manganese and other chemicals at concentrations federal regulators say could contribute to cancer and damage the kidneys and nervous system. â€Å"How can we get digital cable and Internet in our homes, but not clean water? † said Mrs. Hall-Massey, a senior accountant at one of the state’s largest banks. She and her husband, Charles, do not live in some remote corner of Appalachia. Charleston, the state capital, is less than 17 miles from her home. â€Å"How is this still happening today? † she asked. When Mrs. Hall-Massey and 264 neighbors sued nine nearby coal companies, accusing them of putting dangerous waste into local water supplies, their lawyer did not have to look far for evidence. As required by state law, some of the companies had disclosed in reports to regulators that they were pumping into the ground illegal concentrations of chemicals — the same pollutants that flowed from residents’ taps. But state regulators never fined or punished those companies for breaking those pollution laws. The vast majority of those polluters have escaped punishment. State officials have repeatedly ignored obvious illegal dumping, and the Environmental Protection Agency, which can prosecute polluters when states fail to act, has often declined to intervene. Because it is difficult to determine what causes diseases like cancer, it is impossible to know how many illnesses are the results of water pollution, or contaminants’ role in the health problems of specific individuals. But concerns over these toxins are great enough that Congress and the E. P. A. regulate more than 100 pollutants through the Clean Water Act and strictly limit 91 chemicals or contaminants in tap water through the Safe Drinking Water Act. Research shows that an estimated one in 10 Americans have been exposed to drinking water that contains dangerous chemicals or fails to meet a federal health benchmark in other ways. Those exposures include carcinogens in the tap water of major American cities and unsafe chemicals in drinking-water wells. Wells, which are not typically regulated by the Safe Drinking Water Act, are more likely to contain contaminants than municipal water systems. Because most of today’s water pollution has no scent or taste, many people who consume dangerous chemicals do not realize it, even after they become sick, researchers say. The broadest definition of thermal pollution is the degradation of water quality by any process that changes ambient water temperature. Thermal pollution is usually associated with increases of water temperatures in a stream, lake, or ocean due to the discharge of heated water from industrial processes, such as the generation of electricity. Increases in ambient water temperature also occur in streams where shading vegetation along the banks is removed or where sediments have made the water more turbid. Both of these effects allow more energy from the sun to be absorbed by the water and thereby increase its temperature. There are also situations in which the effects of colder-than-normal water temperatures may be observed. For example, the discharge of cold bottom water from deep-water reservoirs behind large dams has changed the downstream biological communities in systems such as the Colorado River. http://www. controllingpollution. com/pollution/thermal-pollution/ http://www. nydailynews. com/topics/Noise+Pollution http://www. dec. ny. gov/chemical/281. html http://www. nytimes. com/2009/12/17/us/17water. html

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