Excellent Consultancy Group - Coursework Example

? Excellent Consultancy Group Excellent Consultancy Group Introduction to Whole Foods Market Whole Foods Market was opened in Austin as a food market which currently operates as a chain. It currently also produces seafood, meat, poultry, grocery, specialties, produce, vitamins, supplements, body and home care products and also pet products as well as prepared foods. All products are sold under WMO’s private label and employees are selected and designated per region and products are also divided into perishable and non-perishable further. The purpose is to make natural and organic products thus following the going green change in the world. It was acquired by John Mackey, a college dropout who started with a Texas natural foods store called ‘Safeway.’ He expanded vigorously and by 1999 had 100 stores. Whole Foods is also listed on NASDAQ, currently as WFM. (Market, 2013) Porter’s Competitive Strategies A well positioned firm can function better even if its outer profitability doesn’t seem to be high compared to other companies. Within an industry, different companies position themselves, according to Michael Porter on different strategies based on their target scope and the advantage they have over other companies. Michael Porter has identified four strategies in this regard: cost leadership strategy which focuses on a broader market segment and low cost strategy to drive out competitors. Secondly, there is the differentiation strategy which also caters industry wise and has the advantage of producing unique products. There are also tow focused strategies which are basically subsections of the two aforementioned strategies; focused cost leadership that caters to a narrower target segment but competes on the basis of price, and focused differentiation strategy which differentiates and is unique yet caters to a narrow market segment. Whole Foods Market has expanded and even to less affluent places with its premium priced and differentiated, private label products, so initially it would be using a focused differentiation strategy, but with a portfolio with a great variety as well as chain stores all over, it has moved to a differentiation strategy. It produces products such as those under the label of ‘365’ and sells them to wholesalers with a promise that they will sell them at a premium price and this is how it has differentiated itself in the minds of consumers. Whole Sales Market has managed to carry on with such a strategy because of the facilities and the skilled expertise to handle and manage differentiation in a broad target market. The firm needs adequate sources and new plants were opened up to cater to the needs of expansion as well. Since these are fast moving goods mostly that WMO produces, the shareholder value model wouldn’t apply as much as the unlimited resource model; that WMO needs to invest and manage risk and uniqueness in order to sustain its position in the marketplace for a long time. However, WMO may also be pursuing a cost leadership strategy which is why it has expanded in less affluent areas as well. Research shows that compared to other organic stores, WMO sells products at a cheaper price. And this is seen in the prices as well as the process of quality assurance. Food has to comply with the high quality standards that WMO has to maintain according to its policies; quality comes first. There are 270 stores, and they have their own farmers who also place utmost importance on quality rather than on negotiations over price that compromise quality. Many products of WMO are cheaper than the products at Safeway. They also focus on the ‘Whole Deal’ by either keeping the prices the same and adding value or cutting prices whenever possible without compromising on quality. (Porter, 1998) Congruence The Nadler-Tushman Congruence Model is a theory which aligns the inputs, throughputs and outputs of a system and it functions on the basis of certain assumptions: Organizations are part of a larger environment and social system There are three levels in an organization which are integrated; the system, group and the individual. Organizations don’t change stagnant and are subject to change. The inputs of the Congruence model are the environment, history and the resources as well as the strategies of the organization. Resources include the human resources, as well as technology, information, capital and less tangible resources such as recognition. There are many resources available in WMO, such as extensive training programs, such as an orientation program, a mentoring program and a university online called the Whole Foods University. There is also offsite training and a great company culture as well as competitive wages that add to the resources of the company. Also each store has their own human resource department to empower employees and allow for flexibility. Employees also work in a transparent environment where they receive all the information that they require, even regarding their compensation. There are also different roles assigned to different employees and information is disseminated accordingly. Team member are also encouraged to share information and develop a culture of teamwork so that everyone plays on a level playfield. (Nadler, 1980) The current capital of WMO is $ 1.49 billion and funding started off with a loan Mackey took to start a store called ‘Safeway’ which is one of the direct competitors of WMO along with Winn-Dixie. The environment includes the outside factors; the people, organizations, events etc. that may have a potential impact on the organization. The people and groups that could impact WMO are its competitors aforementioned which may compete and drive WMO out of business as well. Even though they are not part of the organization or its culture in any way, they do impact the organization. The people involved are those that are in the recruitment process; that is the people in schools or universities where they are picked for selection and training. The people who are recruited are those that would fit in the environment of WMO and its culture and values. These along with the trends of the environment towards organic foods and prices etc. are also kept track of along with basic factors such as inflation, recession etc. which would impact the organization as a whole regardless of the product and the skill of the people working in WMO. History includes the past patterns of behavior and events which may be the reason for the organization’s current practices. John Mackey started off small with a Texas bases store called ‘Safeway.’ It expanded across Austin to New Orleans where Mackey purchased WMO in 1988. The business grew and bought other stores such as North California ‘Bread of Life.’ He expanded and developed new plants and production facilities as well which increased his costs and market both. WMO acquired a coffee company as well as a product line ‘365 Everyday Value’ which was in congruence with the company’s strategy of private labels and differentiation as well as quality. They also acquired a coffee company as well as opened a seafood processing plant. They distributed green as well, being the pioneers in Georgia in 2008. Its history determines the culture and practices in the organization today as it functions in the same way today by expanding, however it is moving towards lowering costs as well by moving to less affluent places as well. (Market, 2013) Conclusion: Aligned or not aligned? The strategies; which include differentiation as well as cost leadership in its segment only align the resources of the organization, and the environment as well as the history is in congruence with the strategies due to the inputs discussed above. The inputs are highly in congruence with the strategy. This is seen by the increase in stock prices over the years including the price in 2013 of around $90. Its expansion has also been on an increase with not only an increase in number of stores to 311, but also the increase in the size of the stores to 38,000 square feet. (NASDAQ, 2013) They also continue to differentiate as well as keep their prices low and taking into account the environment by aiming to go 20% local according to latest reports so that it doesn’t lose out to competitors as well portrays a sense of community which is part of its core values since it started off with fresh and organic food. The above mentioned inputs as well as strategies prove that the two are aligned for Whole Foods Market, being a positive indication of growth and success and a strong positioning in the market segment it caters to; that of organic food. References Market, W. F. (2013). Retrieved from www.wholefoodsmarket.com Nadler, D. &. (1980). A Model for Diagnosing Organizational Behavior. Organizational Dynamics , 35-51. NASDAQ. (2013). Whole Foods Market Inc. The New York Times . Porter, M. E. (1998). Competitive strategy : techniques for analyzing industries and competitors : with a new introduction. Free Press. Read More