Whole Foods Market is comprised of a chain of food-based supermarkets whose base is in Texas at Austin City. The main emphasis of the Whole Food Market is on the usage of organic and natural products. It has been prompted to be classified under one of the most responsible businesses socially. It has risen to be graded among the top 25 companies in the Green Power Partners.
1. Company Background
a. History
The Whole Foods Market began from a very humble beginning. It started as a single shop in a three-story building before becoming a multibillion entrepreneur. The company’s history could be traced back to 1975 when John Mackey was 25 years old. Mackey dropped out of college and borrowed a sum of $45,000 together with his 21-year-old girlfriend from friends and family in order to allow them set up a small food store. The store, then, was referred to as Safeway and has been dealt with natural foods only. The couple later, was evicted from their store because of using it for food storage purposes. They later moved in to live there. John Mackey subsequently entered into a partnership deal with Mike Skiles and Craig Weller. At this point, the Clarksville Natural Grocery was merged with Mackey’s Safeway to give birth to Whole Foods Market which now operates through many subsidiaries which are wholly owned. (Petusevsky 31)
At the end of the company’s financial year in September 2011, it recorded $10107.8 million revenue. This was over 12.2% increase from the 2010 revenue, with its profit being $547.6 million forming an increase of over 25%.
Products
The products being offered by Whole Food are usually natural. The store should emphasize the fact that its products meet the standard level of foods that are free from additives, colors, artificial flavors, and preservatives among other food ingredients that are normally regarded as unsuitable for human consumption. (Petusevsky 23).
Whole foods announced in early 2007 that it would explore the acquisition of Wild Oats Market, which was by then the company’s closest and largest competitor in the market. This was to cost the company around $te.565 million and further an assumed debt of approximately $106 million. This has been the Whole Foods most expensive acquisition to date. It had yearly sales of above one billion in close to 100 stores and an employee base of over 8,500 people. (Paul 27)
b. Sale Levels
The store offers online advertisement to the products that they offer. Its products can be acquired and ordered online. Furthermore, the products are sold in a variety of countries. Whole Foods grew, and by 2008, the month of September, the store has grown to have 264 stores situated in the United States and it also had 5 stores in the United Kingdom and among other various countries. This ensures that it has a large base of sales for its products. The store offers both retail and wholesale services in areas where they carry out their sales.
c. Organization Structure: Strategy and Goals
The Whole Foods Market has an organizational structure which is sub-divided into twelve geographic segments. Each of these divisions is headed by a president which uses a market network known as Whole Foods Market in order to be effective in marketing strategies. There is a hierarchy of 4-phased employment from the Global Headquarters, Regional Offices, Facilities Employment, and down to the Stores Employment. Employees within the system are always encouraged to apply for jobs at the Whole Foods Markets. They focus on developing the employees’ skills and encourage working under no or minimal supervision (Paul54).
2. Country Entry Product & Marketing
The Whole Foods Market is yet to set base in the United Arab Emirates. The UAE has been ranked as a rich country enjoying a GDP per capita that exceeds 2000 US dollars. Business in the UAE was ranked among the top 15 countries worldwide. It has a business environment that is conducive and its economy was strengthened. The economy in the United Arab Emirates is an open one, thus, allowing free business and investments without boundaries. With its GDP being the third (3rd) in the world and places second in the Middle East, the United Arab Emirates offers a fertile ground for businesses. (Hodgetts,Luthans 98)
a. Marketing Need
Whole Foods aims at expanding its businesses into the United Arab Emirates which is vastly becoming a business herb. Whole Foods, having recorded extreme success at home now, is greatly obligated to succeed overseas. The best choice for this expansion is in the United Arab Emirates. The store’s success was basically built upon extensive market research that is meticulous and planning well before venturing into the United Arab Emirates for the purposes of business. This market research ensures that the business venture is not an act of futility and that losses are not to be incurred later on. (Terterov 56). There is no room for underestimating the market temperament. In such ventures, surety and confidence does not overshadow the important aspects of market research. The new customers in the United Arab Emirates need to understand the patterns and impulses that shape their choices, preferences, and characteristics. Eventually, before expanding into the United Arab Emirates, there is the need to set up a business plan comprehensively which the Whole Foods have always done (Ireland,Hitt, Hoskisson & Hitt 132).
Existing Competition, Substitutes
Expansion into the United Arab Emirates needs adequate preparation and well-structured business plans which must be executed in a very rational manner. There is a lot of competition in the business field of UAE as a result of the open market environment in the region. This has seen established companies to continue dominating the markets while weaker companies disappear. In the UAE, it is fundamental that the products from a store should be of exceptional quality and unique in its own way. The products should also be of demand and effective if they are to stand the test of marketing. In other cases, there is a need to offer substitute products that serve the same purpose as the one in the market or more efficiently. These substitute products need to be better in terms of health matters, environmental concerns, and ultimately, of quality. The Whole Foods can withstand this market requirement given the fact that it deals mainly with organic products that are environmental friendly and good for health (Terterov 45).
Marketing Potential and Support
In order to survive and thrive in business in the United Arab Emirates, it is important for the market potential and support to be exploited. Whole Foods has to set a blueprint for all services and goods for marketing. It is also vital to be enfranchised by the competition and target customers. Marketing potential in UAE calls for a store to produce equally competitive goods and services at competitive prices. The products should be in an angle in which the rest of the competitors do not offer. Identification of locations, customers, and sale channels need to be hastened. This could be achieved if there is a laid down support system that supplements the functions and marketing in the store. Whole Foods has to implement these aspects if success in UAE has to be met.
b. Marketing Mix
Marketing is very important in business success. Marketing mix refers to a tool in business that is always applied while marketing products and services. Marketing mix comes handy in the determination of brands being offered and determination of products. Every business entity has to build on the pricing, their products, promotion, and the place where the products and services are being offered. In contemplation to succeed in business in the United Arab Emirates, marketing mix must be observed. In service delivery, the consumer, cost, convenience, and communication to the consumers are vital. Due to the fact that in United Arab Emirates there is a free market, any business entity wishing to succeed must have an idea on what the rival companies offer. This will help to identify the reasons that lead to cheaper services and product sales by the other business rivals. In UAE, market mix is important especially for stores and entities offering food products. Whole Foods, therefore, has to lay down a comprehensive marketing mix so as to evaluate their product and prices. This will go a long way in ensuring that the store offers products that are in line with the market environment and the needs of the citizens in the United Arab Emirates. There are 2 forms of marketing mix which include the producer and the consumer oriented model. In order to expand in the United Arab Emirates, Whole Foods has to embrace the producer model. This is in line with the food products that the Whole Food Market produces. Through the producer oriented model, the store would be able to match the free and open business economy of the United Arab Emirates. (Terterov & Shoult 55)
Four Ps: The Producer-Oriented Model
The four Ps is a producer-oriented model that was mainly based on the price, product, place, and promotion. The wants or needs of a consumer had to be satisfied. The item which satisfies the consumer’s wants or needs is referred to as a product. In business, the item can either be a service which is intangible, or a good that is tangible. Every business entity has to ensure that it produces products that are above reproach and of the desire quality in order to succeed in the United Arab Emirates. The products must have a specific life cycle and different levels of sales. There are times when the sale is always high, other times medium, while at times the sales are always low. For the sake of weathering all these stages, it is inevitable that the products produced should be in a position to meet the demand level. Product mix is also very important. An increase in the respective product line increases a product’s line depth. Whole Foods needs to consider the position of its products, know how to exploit the store’s brands, and know the position of its products in the United Arab Emirates if it wants to succeed in its expansion in the country. It is also important to note how the various products complement one another. . (Terterov & Shoult 73)
The amount that was always paid by the customers in order to get a product or service is called the price. In order for any company to survive and make profits, it is very important that it takes a keen interest in its price. In the UAE, it is very sensitive when it comes to dealing with prices because adjusting the prices in the country has great impacts on the strategies of marketing, the sales, and demands of a product. It is important to identify the value of the customers so as to set prices.
Promotion of the products is also important in the marketing mix. This includes the necessary methods of communication as employed by the marketers in providing relevant information about the products. In promotion, advertising, personal selling, public relations, and promotion of sales are incorporated.
Lastly, the pricing is very important in expanding a business especially in another country. Place refers to the situation of a product which it is easily accessible. It also refers to the distribution of the products.
3. International Management
A. Strategy and Goals (Government Relations, Joint Venture)
Whole Foods needs to have a joint venture with other business entities in the United Arab Emirates in order to explore the country’s market. A joint venture is an agreement in business wherein two (2) or more parties came to an agreement of developing new entities and assets over a specific time span. In this agreement, the parties agree to contribute equitably and both are entitled to exercise control over the business and eventually sharing the expenses, revenues, and all the assets. In joint undertaking, it is easier for Whole Foods Market to establish a base in the United Arab Emirates. The joint venture will assist the store to achieve a specific project in liaison with another business firm. The joint venture could be aimed at achieving a specific project or in building a lasting business relationship. Such ventures can be entered through contracts, agreements in a rental way, or agreement contracts. In joint venturing, Whole Foods Market would be able to engage in other activities that will diversify the products which they will be offering in the United Arab Emirates. . (Terterov & Shoult 154)
There is also a dire need for having strain less and frictionless relation with the government in a foreign country if a business entity is to succeed. This applies to Whole Foods stores which look forward to expanding its productions to the United Arab Emirates. In this relation build up, the store will operate along the legal frame work and there will be a smooth relationship with the UAE’s government which is vital to succeeding in the country.
b. International Structure (Where is the Power, Centralized or Decentralized?)
Whole Foods Market, being a multinational store, needs to set up international structures that are viable and have positive impacts to the business. International structures are vital in shaping the business field. In order to succeed in the business and marketing sector, it is important that a business entity understands the international structure and sets up a structure that will improve the business and maximize the profits. In these structures, the powers may either be centralized or decentralized. (Luthans 85)
In centralization of power, the decision making process and role was confined to a few people. The cohort of people makes all the decisions that are important and are tasked with approving all the decisions that are made at lower levels in the organization. The decision making process is always reserved in the top brass of the organization. It may take a structure, whereby, there are middle level managers who also make decision, but are subject to the top organ. Those in the lower area do take directions as issued from the top management which makes key decisions and pass them to the other levels to work on the implementation process. The Whole Foods could apply this centralized system in managing their international structures.
Decentralization of powers involves delegation of authority across various levels of management in the respective organization. The middle and lower levels of management are given authority to formulate minor policies. The top management is always tasked with making key decision and policies that affect the organization at large. Decentralization is always different from delegation. In decentralization, the lower authorities have some stake in formulating policies and are always given space and time. This decentralization formula could assist the Whole Foods in succeeding with managing its international stores.
c. Staffing (Source of Managers and Source of Lower Level Employees)
In any business, managers and other employees play a major part in the development of a business entity. This ultimately leads to the success of business. Whole Foods needs to have competent, experienced, and qualified managers. This is difficult to achieve unless a comprehensive recruitment process is to be undertaken. It is also important to note that the fact that Whole Foods Market aims at expanding its stores to other parts like the United Arab Emirates, calls for a proper managerial and employees recruitment process. It is more effective to appoint a manager who is well acquainted with the business environment. In this case, if the Whole Foods is to effectively succeed in the United Arab Emirates, then, it must go on an outsourcing mission in the same country. This will improve the quality of products that will be produced due to the fact that the managers will be aware of the marketing scenario in the country. To further enhance the strength and efficiency of product provision, there is a need for the Whole Foods to employ local residents as low level employees. This will ensure that the productivity rate is high in the stores and will create a good rapport with the locals in the country. By having most of the staff members of an organization to take from the respective country, it is easier to create a concussive business environment that will play greater advantage of the store in a foreign country.(Luthans 112)
Nevertheless, there is no harm in outsourcing for managers from a different country especially in the event that quality and experience is needed. In fact, having few managers from a different country having a different business environment will eventually add to the new or different ideas in the business that may be implemented to aid more quality.
d. Hours of Operation
Opening and closing times of a business is always important. This is for a fact that there are always some trustworthy customers who are usually loyal to a specific business entity. In order to get a grip on such customers, it is vital that a business stays up to as late as possible and ensure that whenever a customer needs an item, it will be available. There is also the need to avoid a scenario where a customer needs something from a store, but has to pick it from another store because the favorite store is closed.
In the event that the Whole Foods Market opens up in the United Arab Emirates, it will have to adjust its operating hours. This is basically because in the Unites States of America, shops and businesses close up earlier than those in the UAE. For instance, in the United Arab Emirates, shops and businesses open up at around 7 o’clock in the morning and close at around 10pm to 12 midnight. Such hours are longer as compared to those in the US. This, therefore, means that if the store is to succeed in making maximum profits in the United Arab Emirates, then, it is obliged to adjust its working hours.
e. Reward and Punishment System
Rewarding of outstanding employees in a business contributes to the development of a business entity. When employees perform well in any business, rewarding them will lead to replication of the same good work and propel the business to have higher profits. At Whole Foods, there is a fundamental value of striving towards achieving excellence and happiness among its members. (Luthans,Doh 287). This has been done through rewarding those who do well in carrying out their duties as a means of showing that they are being appreciated for their good work in the store. Rewarding could take different shapes. There is the thing that we call an intrinsic and extrinsic reward. Intrinsic reward is an appreciation that is given by word of mouth. Such rewards do make workers feel appreciated in an organization. Extrinsic rewards include physical handing of rewards and prizes. This is always done mostly during companies’ meetings. Those who excel in their lines of duty are rewarded for their good efforts. Whole Foods Market applies different forms of rewarding their employees. Similarly, the employees are always given medical cover and insurance that highly motivates them and made them feel appreciated in their stores. Whole Foods Market’s stores further set aside funds from their budget to be used in evaluating and developing the employees among other incentives and benefits as a form of reward.
Despite the fact that there are rewards for those who excel, there are also punishments for those who contravene the principles; policies and ethics of the stores. There is always the need to have a committee which is bestowed with the responsibility of ensuring that discipline is maintained among the employees. Functioning as in case an employee is involved in graft cases, that measures could be taken like suspension or termination of contract. This ensures that there is discipline in the organization (Luthans,Doh 325).
f. Control System
Control system is important in managing, commanding, regulating, or directing the functioning of other systems or devices. Control system is necessary in the success of any business. Whole Foods has a control system that is used to monitor and have a data base of all the aspects in the stores. In order to make more profits and succeed in expanding its business, there should be a more sophisticated and amalgamated control system that will come handy in easy management of the workers and all the employees in the stores.
Whole Foods Market has a setup of 17 companies. The different companies specialize in dealing with different types of products. There has been a horizontal integration and there were new stores opened to integrate the other stores. With the increase of demand for natural food products produced by the Whole Foods Market, there was an expansion program. There is a company culture at the Whole Foods Market; the stores highly regard its members.
g. Social Image and Ethics
There have been mixed projections in terms of image and ethics at the Whole Food Market. In the recent past, Whole Foods has been subjected to a lot of boycotts and resistance in terms of locations of stores. There have been further criticisms on its policy that it uses to promote its brands. The policy has been termed as an aggressive one. It has also faced a lot of fructuous relations as a result of their issues on labor, business practices, and product selection. (Luthans,& Doh 97)
On the other side, Whole Foods has experienced a series of positive image building and ethics. John Mackey, the company’s CEO was awarded the best CEO in the world. The company was later awarded a top honor by the Environmental Protection Agency in 2006 and was also awarded with a Green Power Leadership Award and Green Power Partner in the years 2004, 2005, and 2006. The store also became the 55th largest revenue contributor in 2005 in the United States of America. The social image of the store was also boosted in 2003 when its CEO was named the Overall National Ernst and Young Entrepreneur of the Year. The Whole Foods has also won a number of retailers’ awards. Such awards have boosted the social and ethical face of the store. In the international front, the Whole Foods store is fast gaining prominence worldwide. Its quest of expanding its stores to the United Arab Emirates will be achieved only if the above factors will be taken into consideration. (Terterov & Shoult 134)
Works cited
Hodgetts,Luthans. International Management: Culture, Strategy, and Behavior. London: Irwin/McGraw-Hill. 2000. Print.
Ireland,Duane, Hitt, Michael, Hoskisson, Robert &. Hitt, Michael. Understanding Business Strategy: Concepts and Cases. Cengage Learning. 2008. Print.
McGraw-Hill Companies, Incorporated. 2011. Print.
Paul, JM. Whole Foods Market---A Communication Plan to Engage the German Market. California: University of Southern California Press. 2009. Print.
Petusevsky, Steve. The Whole Foods Market Cookbook: A Guide to Natural Foods with 350 Recipes. London: Crown Publishing Group. 2010. Print.
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