Whole Foods Market Inc. is a well-known name in U.S., was founded in 1980. It’s headquarter is located in Austin, Texas. It is a super market chain featuring quality foods which is free form artificial preservatives, flavors, colors and fats. It provides services in U.S., Canada and United Kingdom. Whole Foods Market is a natural premier foods grocery company and it is also known as “America’s Healthiest Grocery Store.” Grocery market’s switching costs are essentially zero as it is highly competitive market. Whole Foods Market’s gross margin is 35% and its operating margin is 5%, which is among the highest and make it a top-notch grocery chain. Its capital’s cost is in between 6 to 7% and its return on invested capital ranged between 5.9% and 14.9% over the span of 10 years. Some of Its competitive advantages are:
Whole Foods Market has a policy that they at least donate 5% of its annual profits to the charitable causes. It comes from the store level donations throughout the year and also comes from different targeted projects.
It ranked third on United States’ Environmental Protection Agency’s list of “Top 25 Green Power Partners” and received EPA award in 2004 and in 2005. It has got a partner of the year award in 2006 and 2007. It ranked second highest purchaser of Green Power nation-wide in EPA’s report in 2007.
Elimination of Plastic
Whole Foods was United States’ first supermarket, who eliminated disposable plastic grocery bags completely to help and protect the environment and it also eliminated the use of these bags company-wide.
Animal’s Humane Treatment
Animal compassion Foundation was created by Whole foods Market in 2005. It is a separate non-profit organization, which formed to help producers who evolve their practices just to raise animals in a natural and humanely manner. They prohibited pulling feathers from ducks, bill trimming, bill heat treatment, toe’s punching and toe removal. It has also announced that it does not intend to sell cloned animals’ milk and meat.
Organic and Natural Foods
Whole Foods Market’s main focus is on natural and organic foods, so it has a direct competition with the Fresh Market, Trader Joe’s and Sprouts Farmers’ Markets Inc. This is also a plus due to people inclination towards healthy organic food products.
Strong Brand Name
One of the greatest source of competitive advantages of Whole Foods Market is its strong brand identity as it established and developed itself into a leader in the organic and natural food segment.
Maintains High Quality
Whole Foods invested in the store quality and customer service heavily. Most probably these elements differentiate it from other competitors.
Promotes Exclusive Brands
It promotes exclusive brands by investing with smaller companies. One of the small brand Feridies natural peanut products got started with Whole Foods. Its organizational culture enables company to not only maximize productivity, but also to minimize the Human Resource spending for training and recruitment.Whole Foods Market only sells those products that meet the quality standards for being “Natural” set by itself.