Competitive Forces and SWOT Analysis - Case Study Example

This paper will also discuss the most significant threat to the Whole Foods market, and explain how this company can employ its opportunities and strengths to attain a sustained competitive lead in the market. In addition, this article will include a complete SWOT analysis, and also identify opportunities and threats facing the organization. Question 1: Trends in retailing of organic foods and its impact on the Whole Foods Market There is a variety of trends in the retailing of organic foods.

These trends impact the Whole Foods industry and the market at large tremendously (Steve, 2002: 1). Sales of natural products across all retail and directly to consumer channels have grown to about $68 billion in the year 2008; a 10% increment over the prior year. The congress passed an act on organic foods production in 1990. USDA established standards that were official for organically grown products in the United States by regulating agencies responsible for labeling of organic products (Steve, 2002: 3).

31% of organic food sales were sold by mainstream supermarkets, 22% through sovereign small store chains, and 24% through leading food stores. Some of the top processors of organic foods in the market are General Mills, Kraft, Heinz, Kellogg’s, Dean Foods, Campbell soup, Hunt, Tyson foods, Coca cola and Del Monte (Porter, 1980: 295). Research carried out by the USDA depicts that, in 2000, surplus organic products were sold in conservative supermarkets than in the ordinary food stores (Thompson, Strickland & Gamble, 2010: 23).

Most of the common organic foods sold included wine, pasta, beef, yogurt, vinegar, canned fruits and vegetables, apples, tomatoes, cucumbers, broccoli and lettuces among others. Despite the fierce competition in the price of organic products, consumer demands still remain high. The factors that have increased demand for organic products include health consciousness, healthy eating patterns, consumer concerns, soil, and water. Question 2: Assess the competitive situation of the firm by applying Porter’s model and hence, analyze each aspect relative to the business Porter’s five forces analysis comprises of a framework for industry analysis and business strategy development (Porter, 1980: 215).

Porter refers to these forces as the micro environment. He developed these five forces in reaction to the then-prominent SWOT analysis, which he identified as ad hoc and un-rigorous (Fine, 2009: 3). These forces have been applied in enterprises so as to stabilize them hence, making them more profitable. These forces include intensity of competitive rivalry, risk of new competition, bargaining command of customers, bargaining supremacy of suppliers, and risk from substitute services and products.

Most profitable markets yield substantial returns that attract other new firms. The fresh foods market earned over $350 million in 2008. Moreover, the Whole Foods achieved sales worth $6.5 billion in the same year (Thompson, Strickland & Gamble, 2010: 14). The competitive strength and strategy of the Whole Foods Company immensely attributed to success in their sales. Over 90,000 items were sold to consumers from the Whole Foods Company which had 284 stores in that period (Thompson, Strickland & Gamble, 2010: 20).

This company was facing slight competition from the Fresh Markets Company where some products were being substituted for others by the customers. The