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Taken from assignment instructions:1.A written executive summary of your analysis, findings, and recommendations (2-page maximum). Please use a 12-point, Times New Roman font, single-spaced, and 1” margins.All I need is the executive summary written. Cannot be longer than 2 pages, but 1 page is preferred and single spaced. The paper itself is already written and will be provided for you so you can write the executive summary. Its on Whole Foods. Ignore all the comments on the side. whole_foods.docx Unformatted Attachment Preview Whole Foods Consultation MGMT 434 Group 3 Amanda Childress, Samantha Colandrea, Victoria Strahan, Ankiprit Kaur, Stephen Delong Executive Summary Introduction Whole Foods Market is the largest American grocery store specializing in natural and organic foods. The entity operates in the United States, Canada, and the United Kingdom with headquarters in Austin, Texas. The stores came into existence in 1980. Like any other company, Whole Foods Market has had ups and downs that have affected its competitiveness in the market. Whole Foods Market utilizes differentiation to remain competitive in the industry. Since its establishment, Whole Foods emphasizes on providing customers with organic products with minimal or no additives. Industry Environment Competitors Whole Foods has many competitors including Wal-Mart, Kroger, Albertson’s, and a vest array of other retailers who sell groceries. Whole Foods’ direct competitors are those who sell high quality organic and all-natural food options. Their major direct competitors are Sprouts Farmers Market and Trader Joe’s (Hall, 2019). In 2017, Whole Foods captured 1.6\% of total market share, while Trader Joe’s only had 1.3\% of the market share (Conway, 2019). Sprouts Farmers Market had less than 1\% of market share in 2017. Wal-Mart, Kroger, and Albertson’s together held more than 41\% of the total market share (Conway, 2019). Products of Services Many grocery retailers have their own line of products. Whole Foods have four different product lines, Whole Trade Guarantee, Engine 2 Plant Strong, Whole Foods Market, and 365 Everyday Value (Whole Foods, 2020). These product lines consist of organic and natural products. The products produced by Whole Foods are free from non-genetically modified organisms. Kroger has store brands as well, such as Simple Truth, Simple Truth Organic, Private Selection, HemisFares, Comforts, Abound, and Kroger (The Kroger Co., 2020). Trader Joe’s carries the brand Trader Joe’s and Wal-Mart offers Great Value products. Many stores offer private label brands as a means to earn brand loyalty and reduce prices. In 2014, private label sales accounted for 20\% of all grocery sales (Bells, 2015). Society today demands products instantaneously, so through Amazon Prime, Whole Foods now offers free one hour pick-up and free two hour delivery. Kroger, Wal-Mart and Publix also offer grocery pick-ups, but not within an hour. Strategies and Critical Success Factors in the Industry Business-Level Strategies Grocery retail is a very competitive industry, so firms need to employ the right business strategy to gain as much market share as possible. Whole Foods, Trader Joe’s, and Kroger all use differentiation as their business level strategy (Thompson, 2017). Wal-Mart and Sprouts Farmers Market both use cost leadership as their strategy (Thompson, 2017). The fact that Whole Foods do not have any chemicals in their products is one reason why higher prices do not deter their customers from shopping there. Competing Effectively Effective competition is the main reason why there are so many successful companies. All firms operating in this industry must embrace the use of generic and intensive growth strategies. As such, the generic strategy is part of an entire initiative aimed at ensuring that there is an increase in the competitiveness in the industry. The generic strategy is essential in ensuring that a firm stands out against its competitors. The best way to overcome this competition is to embrace the use of intensive growth strategies that are essential in ensuring that the business development of the company is achieved and that there is an expansion of the business to attract more customers. Business development is also necessary for companies to remain competitive in the long-run (Tippens et al., 2019). Effective marketing and product promotion can be used to enhance competitiveness. The broad differentiation generic strategy will help a company to separate itself from the competitors through having unique features for the market output. General Environment Political/Legal Forces American grocery retailers are expected to abide by laws and regulations that are implemented by the government. According to Baourakis (2012), American grocery retailers are subjected to more stringent regulations through a large number of government agencies that create policies, monitor the operations of retailers, and pull down the products that they place on their shelves. Changes in government regimes are often accompanied by changes in these regulations and policies. In fact, the relevance of politics can be identified in the rising number of penalties that retailers are receiving from government agencies for violation of policies, which forces companies such as Whole Foods Market to update their processes regularly. Legal factors are closely related to political factors. Companies are expected to align their operations, services, and products with the regulations and policies that are developed by government agencies. Labor, health, competition, environmental, and trade policies should always be observed. The legislature and judiciary have been particularly responsive to violations among companies. In addition, retailers could be subjected to legal battles for raising their prices, offering substandard products, or suppressing competition. In this case, a legal battle over antitrust issues that followed Whole Foods Market’s acquisition of Wild Oats in 2008 ended with the sale of the new subsidiary (Fridson, 2015). While retailers have been accustomed to these and other legal requirements, newer ones are becoming a cause for concern. For instance, while the Internet has promised to revolutionize the retail sector, it has created new constraints for market players. In this case, companies can easily be fined for unknowingly violating new privacy policies, misusing customer data, and exposing data to emerging threats. Economic Factors The grocery retail sector is an important part of the consumer market. Economic factors could affect the consumers’ purchasing power and the ability of retailers to operate and should be studied closely. GDP is an important economic factor. When the GDP growth rate is high, retailers can comfortably expand their operations in anticipation of the growing market. Similarly, a rise in inflation and tax rates could also affect the performance and sustainability of retailers. While governments strive to stabilize their economies, some forces such as market failures and financial crises are inevitable. For instance, following the infamous Great Recession that started in the US in the mid and late 2000s, the volume of sales among retailers declined considerably, while others were forced to close down some of their stores or close down their operations altogether following unprecedented losses (Anagboso & McLaren, 2009). However, a major reprieve among grocery retailers is the high potential of the industry, which is characterized by its positive growth rates. While the grocery industry grew by 5.35\% in 2018, this growth rate is projected to rise consistently to 6.03\% in 2022 (O’Connell, 2017). This shows the high resilience of the industry and the vast opportunities that it offers to retailers. However, retailers should always evaluate the cost of goods and their leverage against suppliers so as to ensure that they can offer competitive prices to their consumers. Social Factors It is recommended that retailers make use of technologies that enable them to understand their consumer purchasing behavior and preferences in order to ensure that they streamline their operations to match the needs of their distinct customers (Akter & Wamba, 2016). Recent studies show that, unlike the past, when consumers used to make small purchases in order to reduce their expenses, these consumers have shifted to bulk purchases for purposes of convenience and reduced prices (Hortaçsu & Syverson, 2015). As such, companies that fail to mass stock their products or to offer bundled sales could soon lose relevance. In addition, market demographics change from time to time due to changes in generations, immigration, and multiculturalism. In addition, awareness and the lifestyles of the consumers also affect the sustainability of the retailers to succeed. In the recent past, consumers have shifted their focus from processed foods in favor of healthy/natural products (Martinez, Rodriguez, Mercurio, Bragg & Elbel, 2018). Similarly, a rise in activisim against genetically modified foods, cloned animals, animal cruelty, and environmental pollution could have been creating consumer backlash among retailers that have failed to meet the expected standards. Technological Factors Technology is quickly becoming an integral factor in every industry. However, its relevance in the grocery retail sector is even more pronounced. For instance, recent studies show that e-commerce has been growing at a fast pace than physical stores (Hortaçsu & Syverson, 2015). Despite many big-box retailers having been founded decades ago, e-commerce companies such as Walmart have outgrown these companies over a short period. Besides, technologies such as e-commerce enable retailers to lower their operating costs, add value to their services, and expand their market coverage without a physical presence. In addition, newer technologies have enabled companies to tailor their services to match the needs of their consumers. For instance, data mining technologies such as cloud computing, big data analytics, machine learning, and artificial intelligence have been touted as the future of retail since they enable retailers to understand consumer behavior/preferences and to align their services with these trends (Akter & Wamba, 2016). At the same time, artificial intelligence have become increasingly common in the industry, which have an impact on operations, jobs, and sales. Environmental Factors The environmental protection agency (EPA), other government agencies, and the community have become increasingly active in raising accountability among retailers and other companies. In this case, companies in this sector are not only expected to lower their pollution, but they are also expected to embrace environmentally friendly products. Packaging materials and energy sources have been the greatest concerns. As Naidoo and Gasparatos (2018) argue, the ban on many synthetic materials such as plastic packaging materials has considerably raised the cost of operation among retailers. While embracing green products, environmental conservation, and the use of renewable energy are vital for legal compliance, they are also an important way for retailers to improve their corporate social responsibility. Key Issues Opportunities One of the key opportunities that the grocery retail sector offers, is expansion into new markets. In this case, large companies can use strategies such as the establishment of new operations or mergers and acquisitions to expand their physical presence. While Whole Foods Market demonstrated its mastery of mergers and acquisitions in its aggressive expansion in the 1990s and 2000s, Walmart emerges the winner in expansion as it boasts close to 12,000 stores in 27 countries in all continents (Walmart, 2019). However, e-commerce has presented as a great opportunity for retailers to expand their operations without necessarily establishing a physical presence. This is an opportunity that has been perfectly utilized by Amazon. As the parent company of Whole Foods Market, the success that Amazon has achieved and the platform that it has created present an opportunity for Whole Foods Market to expand its operations. Personalization of services is a new opportunity in the retail sector. As explained earlier, technologies such as big data analytics, cloud computing, and data mining enable companies to collect bulk data from their consumers, process it, and use it to understand their preferences and behavior. Using results from these technologies could enable companies to offer more relevant services to their consumers. Walmart is among the few companies that have excelled in this sector, where the company transmits approximately 2.5 petabytes of consumer data to its data centers, processes it, and uses it to offer more relevant services (Marr, 2017). Retailers also have an opportunity to create new market segments and to offer specialized products that align with emerging trends. This is an area that has been perfected by Whole Foods Market. While other companies strive to optimize their profits in a highly competitive market, Whole Foods Market created new market segments by offering healthy and natural products that align with the needs of new segments based on lifestyle and health (Haddon & Gasparro, 2017). As such, it is clear that retailers can create more markets rather than being bound by traditions in the industry. Threats The threat of new entrants in the grocery retail sector is high. While the industry is promising for companies as a result of its high and consistent growth rates, it has attracted both small and large companies. Unfortunately, the threats of competition and substitute products are also high. In this case, many retailers tend to sell the same line of products as their competitors. Despite companies such as Whole Foods Market innovating by introducing healthy products, they still face cheaper processed alternatives as well as healthy products from other retailers. At the same time, the grocery retail industry is characterized by intense competition from both big box retailers, e-commerce companies, and cheaper substitute products. Product life cycle and obsolescence are also major concerns among grocery retailers. In this case, intense competition in the industry has created a wave of change at all levels of the business. In this case, manufacturers, suppliers, and sellers are becoming more innovative in order to outdo their rivals. This means that newer products emerge within a short period to rival their competitors. As such, the life cycle of products sold by grocery retailers and their obsolescence are considerably short. Company Analysis Whole Foods Overview Whole Foods Market is a multinational grocery store chain originally founded in Austin Texas in 1980 by owners, John Mackey, Renee Lawson Hardy, Craig Weller, and Mark Skiles. The company is based on the principles of providing individuals with organic and quality food, “Our purpose is to nourish people and the planet. We’re a purpose-driven company that aims to set the standards of excellence for food retailers. Quality is a state of mind at Whole Foods Market.” (Whole Foods, 2020). Whole Foods began expanding the company in 1984 by opening more locations across Texas, the company expanded from Austin to Houston and Dallas (“Whole Foods”, 2020). Soon after a location was opened in New Orleans, before they made a bigger move to Palo Alto, California in 1989. During the expansion many mergers and acquisitions took place, and the company began to acquire other natural food chains across the United States, some of which include, Wellspring Grocery of North Carolina, Mrs. Gooch’s Natural Food, Markets of Los Angeles, and Nature’s Heartland of Boston (“Whole Foods”, 2020). There are many factors that help Whole Foods decide where they want to open their next location. Availability, cost of real estate, population density, education, demographics, and community’s interest in natural and organic foods are all factors that are considered when making the decision to expand (Kashino, 2020). Keith Sellars, the head of the Washington, DC Economic Partnership for Whole Foods, stated the factor that plays the heaviest role on expansion is the level of education. The chain relies heavily on customers that are highly educated due to their knowledge on the benefits of organic food, which leads them to be more willing to pay higher prices for their groceries (Kashino, 2020). Whole Foods has a strong understanding of their target market and understands what types of customers they have. Recent studies have shown Whole Foods target market consists of individuals and families who earn an income above the national average. Most customers have college degrees and live in metropolitan areas (Brandongaille, 2014). Although, Whole Foods has done a great job understanding their target market and creating brand loyalty, they are looking to expand to millennials. In 2015, Whole Foods announced their goals to reach out to more millennials and open more stores that would fit their specific needs, such as healthier living while being cost efficient. In 2016, the company opened its first stores under the new name 365 by Whole Foods (Whole Foods Market | History & Facts, 2020). The stores were a way of reaching out to larger communities, products sold at the 365 markets were considered “store brand” and were smaller and carried less expensive merchandise (Whole Foods Market | History & Facts, 2020). Although, after Amazons acquisition of Whole Foods in 2018, the 365 Market stores began to close down. Amazon was already working towards lowering the prices of products sold at Whole Foods which defeated the purpose of the 365 Markets. A recent research conducted by Statista shows the different age groups of individuals shopping at whole foods. As shown, 48\% of Whole Foods Market customers are between the ages of 50-64. Since Millennials make up only 20\% of Whole Foods customers, this expansion would be important, since it would ensure brand loyalty with their customers for coming years. To reach more than one audience, Whole Foods has created four different product lines: 365 Everyday Value, Whole Foods Market, Engine 2 Plant-Strong, and Whole Trade Products. The 365 Everyday Value product line is considered to be more affordable for consumers while still ensuring quality food. The Engine 2 Plant -Strong products were founded by Rip Esselstyn, and are plant-based and healthy products consisting of, fruits, vegetables, whole grains, beans, nuts and seeds (Whole Foods, 2020). Whole Foods Market products are their name brand and original products, which are considered unique, natural, and organic. Customers also have the option of buying the Whole Trade Products, which allows customers to take part in helping Whole Foods Market give back to the communities around the world. By purchasing products from the Whole Trade line customers are actively using their buying power to create new economic opportunities for workers in the developing world (“Whole Foods”, 2020). Whole Foods organizational culture plays a major role in the success of their company. Some of the most important characteristics of their culture are: having a focus on team, participation, semi-formal interactions, and transparency (Rowland, 2020). Whole Foods six core values are aligned with delivering quality service and ensuring a strong bond with the employees, which reduces the employee turnover rate. The company has reached a large amount of success and growth and these core values have been attracting millions to apply each year. The company originally consisted of a staff of 19 members and has grown to 91,000 and over 500 stores today open across the United States, Canada, and the United Kingdom (Redman, 2020). Strengths and Weaknesses Whole Foods, like any other business, has strengths and weaknesses. Some of the strengths include: high quality products, brand loyalty, Prime discounts, Prime delivery, environmental work, humanitarian work, and strong social media presence. Weaknesses include: high prices, incorrect pricing in the past, lack of foundation marketing, bulk options aren’t advertised, and uneasy employees. Additional details on these points are provided below. Strengths Whole Foods has many strengths. Their web ... Purchase answer to see full attachment