Whole Foods Market - Case Study Example

Whole Foods Market Whole Foods Market is a company that seeks out the finest natural and organic foods available. They pride themselves in working with local growers and helping them to bring their products to market. Their mission is simple: "Whole Foods -- Whole People -- Whole Planet." (Whole Foods Market "About"). Whole Foods started in Austin, Texas with one store and they have grown to 270 stores in North America and the United Kingdom. They seem to develop stores in major cities and then look for the best quality merchandise in the area. According to the information on their website, Whole Foods started small with several ideas as to how they wanted to build their business. They started out with products and services that could not be found in other health food stores. In fact, Whole Foods has a policy that they will only sell certain types of things in their store. This means they have to be of high quality and they must be solid products for the health of the people who purchase these items. The Whole Foods Structure for change is not listed in the products but in the teams that run the stores. According to Gary Hamel, small work groups are in charge of each department and they have some autonomy in what they do. When new people come into the program, they are given a four week period of time to work. At the end of this time the team must vote on whether the new person says or goes; they need a two thirds majority vote in order to stay (Hamel, 2007, p.2). They also decentralize the work. Employees are in charge of all the key operating decisions which include pricing, ordering, staffing and in store promotions. In coordination with the store manager, the employees of each department decide on what to stock and make decisions about what will appeal to the local customers (Hamel, p. 3). This is a unique way of doing business for any company and this is what makes Whole Foods Market work. It seems that the structure has not changed since they began. Whole Foods Market makes the point that they will only sell certain types of foods. When people shop there, they know that they are getting the best quality around because: 1. They evaluate each product carefully. 2. They only sell foods that are free of artificial preservatives, colors, flavors, sweeteners, and hydrogenated fats. 3. They are committed to making sure their foods are fresh, wholesome and safe to eat. 4. They find organically grown foods. 5. They have foods that are nutritionally and that support both health and well being. (Whole Foods, "Quality Standards") These are the policies that they enforce in each store and this is why they are growing. According to the website most of their growth has come through mergers and acquisitions. Throughout the 90s they were able to grow because they acquired other small whole food chains of stores. They systematically moved outward from Austin, TX into major cities acquiring stores that were already successful. They also moved forward to create a "virtual store" that at first was WholePeople.com but merged with another of their companies and became Gaiam.com, Inc. (Whole Foods, "History"). Their organizational structure according to the company is a "yoghurt culture". According to ICMR, the biggest reason why Whole Foods Market has grown is because of "the companys unique value proposition as a retailer committed to natural and organic foods and environment- friendly operating practices". (ICMR, "Excerpts"). They were also able to pull away from other natural food stores because they were larger than the others and provided unique an different foods. Because of their team structure, they were able to grow without bureaucratic interference. The CEO of the company, John Mackey, has also made sure that the business stays socially conscious. They consistently give money to the community and they make their consumers aware of challenges in the industry. As an example, when they are not selling a popular meat or fish in the store, they tell why they do not sell it and the politics behind that decision. All of these things make people continue to go to Whole Foods Market and helps them grow. According to Fishman (2007), another reason Whole Foods keeps on growing is because of its commitment to making sure that their employees and their customers are happy (p. 3). According to Whole Foods Declaration of Independence, the way that they will grow is because of the "Team Member productivity and excellence, customer satisfaction, and financial health continue to prosper" ("We Create Wealth"). Because Whole Foods developed the team concept to work in their individual stores, the idea of virtual teams works extremely well although there was no evidence to be found that they actually use them. Because of their team work concept in each of the stores, it would seem that a virtual team would bring together all of the stores for meetings if necessary. Building alliances for Whole Foods Market begins with the use of local growers and farmers. They believe that by using local farmers and growers they are able to reduce the cost of transporting food and cut down on the carbon foot print. This also allows them to get green produce to the market sooner and makes seasonal items available for a longer amount of time. They also are very conscious of the environment and they Reduce, Reuse, Recycle in each of their stores. They partner with many local nonprofit organizations that include schools, environmental programs and other nonprofits to give money to the community. As an example, they partnered with a group in Boulder Colorado, Conscious Alliance, to match food donations at the Mile High Music Festival in 2008 (The Fresh Ideas Group, 2008). They are always on the lookout, according to the Whole Story (The Whole Foods Market Blog) for alliances that they can make with environmentally conscious businesses beyond their own. The greatest role that alliances play is that they further the vision and values of the company. When a customer comes into the store even for the first time, they know that they are receiving quality food. They are able to taste the food in most of the departments whether they come into the store on a "tasting day" or not and there are signs all over the store that indicate what is going on in the environmental world. They have bins for putting compost items as well as recycling bins. The ambiance of the store shows that they are interested in making alliances with customers as well as their employees. Whole Foods Market is very visible in the community. Whether they are donating money or food to the community, they are visible. Each store has a chart that tells how much money they have contributed to the community for each quarter. The Whole Foods Markets Local Producer Loan Program (LPLP) provides up to $10 million to local farmers and producers so that these local farmers and producers can continue to bring good, whole food to the market; these loans sustain many farmers and producers and create an opportunity for them to grow their business. Each store is in a certain community and the employees are active in their communities by donating their time and energy to nonprofit organizations in the community. Each store gives money to local food banks and shelters, they hold "community giving days" where 5% of their proceeds for that day go to a local non-profit or educational organization. They also give bag credits for using your own bags and the credit can be donated to nonprofit organizations. They also have a global component that provides micro lending to rural areas and support project that directly deal with organics or environmentally friendly production methods, sustainable seafood, animal welfare, nutrition and healthy families (Whole Foods Market, "Community Giving). One of the issues that many people have brought as a criticism of Whole Foods Market is that their prices are very steep for the customers. This could be one of the things that the company could do better, but as the critics say, the people who shop at Whole Foods do not seem to mind the higher prices. As an example, Bluejay suggests that there are several things that Whole Foods can do better. One issue that he sites that many other articles and blogs have cited is the fact that they strive for profit and keep their wages low. Bluejay like others suggest that it they could pay their employees a decent salary, cut their prices a bit for customers and make sure that this issue falls in ling with their socially responsible face. References Bluejay, M. 2009. Whole Foods Market: Whats wrong with Whole Foods? Blog. . [Accessed: October 26, 2009]. Fishman, C. 19 December 2007. The Anarchists Cookbook. Fast Company. http://www.fastcompany.com/magazine/84/wholefoods.html. [Accessed: October 27, 2009}. Hamel, G. 27 September 2007. What Google, Whole Foods do best. Fortune Magazine. Read More