BUSINESS POLICY & PLANNING CASE STUDY 2012

WWW.WHOLEFOODSMARKET.COM

STEVEN PELLETIER, JARRYD PHILLIPS, OTHNIEL HYLIGER, SPENCER JACOBY,
JERMAINE WEST
OVERVIEW
Company Overview
Brief History
Current Vision & Mission
Current goals and policies

New Mission and Vision Statements
Core Values
Organizational Chart
External Assessments
Industry Analysis
Opportunities and threats
EFE Matrix
CPM Matrix
Internal Assessment
Strengths and weaknesses
Financial condition
IFE Matrix


Strategy Formulation
SWOT Matrix
Space Matrix
Grand Strategy Matrix
IE Matrix
Matrix Analysis
Possible Strategy
QSPM Matrix
Future Strategic Plans
Objectives
Recommendations
Implementation Issues
EPS/EBIT
Potential issues
Sources


TIMELINE HISTORY
1978- twenty-five year old dropout John Mackey and twenty-one year old
Rene Lawson Hardy, opened the small natural foods store.
1980- John and Rene partnered with Craig Weller and Mark Skiles to
merge SaferWay with their Clarksville Natural Grocery.
1981- The worst flood in 70 years devastated the city of Austin.
1984- Whole Foods Market began its expansion.
1989- We expanded to the West Coast.
1990-1999- acquiring other natural foods chains throughout the 90's.
1998- Development of "virtual" store began.
1999- Site went live.
2000- Additional acquisitions.
2001- Whole Foods moved into Manhattan.
2002- Saw an expansion into Canada
2003-2004- Whole Foods Market entered the United Kingdom.
2007- Merger with Whole Foods Market
2008- John Mackey cleared of charges.
August 2008- voluntary multi-state recall.
2009- John Mackey voluntarily gave up his chairmanship
2011- The stock symbol changed

CURRENT VISION STATEMENT
Our bottom line ultimately depends on our ability to satisfy all of our stakeholders.
Our goal is to balance the needs and desires of our customers, Team Members,
shareholders, communities and the environment while creating value for all. By
growing the collective pie, we create larger slices for all of our stakeholders. Our core
values reflect this sense of collective fate and are the soul of our company.

WHOLE FOODS MARKET GOALS
We aspire to become an international brand synonymous with not
just natural and organic foods, but also with being the best food
retailer in every community in which we are located. We believe
our heavy emphasis on perishables and locally grown products,
along with our unparalleled customer service, is helping us reach
that goal, differentiating our stores from other supermarkets and
enabling us to attract a broad base of loyal customers. We are
well positioned to take advantage of changing demographic
trends, and I expect our renewed emphasis on healthy eating to
help further differentiate us and solidify our unique position within
the food retailing universe.

WHOLE FOODS MARKET POLICIES
We believe that much of our success to date is because we
remain a uniquely mission-driven Company. We are highly
selective about what we sell. We believe in providing an
empowering work environment for our team members, and we
are committed to sustainable agriculture. Our motto, Whole
Foods, Whole People, Whole Planet, emphasizes that our vision
reaches far beyond just food retailing. We strive to promote a
strong Company culture featuring a team approach to store
operations that we believe is distinctly more empowering of team
members than that of the traditional supermarket. We also
promote a decentralized team approach to store operations in
which many decisions are made by teams at the individual store
level.

NEW VISION & MISSION STATEMENTS
While we fulfill a part of our mission every day
through selling the highest quality natural and
organic foods available, we believe we have the
opportunity and obligation to do more in terms
of educating our stakeholders about the benefits
of healthy lifestyle choices. To underscore our
renewed focus, we created a new Core Value this
year Promoting
the health of our stakeholders
through healthy eating education.
CORE VALUES
SELLING THE HIGHEST QUALITY NATURAL
& ORGANIC PRODUCTS AVAILABLE
SATISFYING & DELIGHTING OUR CUSTOMERS
SUPPORTING TEAM MEMBER HAPPINESS & EXCELLENCE
CREATING WEALTH THROUGH PROFITS & GROWTH
CARING ABOUT OUR COMMUNITIES
& OUR ENVIRONMENT
CREATING ONGOING WIN-WIN PARTNERSHIPS
WITH OUR SUPPLIERS
PROMOTING THE HEALTH OF OUR STAKEHOLDERS
THROUGH HEALTHY EATING EDUCATION
ORGANIZATIONAL CHART
EXTERNAL
A
S
S
E
S
S
M
E
N
T
S

GLOBAL INDUSTRY ANALYSIS
Organic Market Growth Rates
Source: Organic Monitor
R
e
v
e
n
u
e
s

(
U
S

$

B
i
l
l
i
o
n
s
)

US INDUSTRY GROWTH
Organic Food Growth 2006-2009
Source: Organic Trade Associations 2011 Organic Industry Survey conducted 12/22/2010 3/7/2011 ($ mil consumer sales).
GLOBAL SEGMENTATION BY LOCATION
United States 97% of sales
Canada and UK 3% of sales
COMPETITORS
OPPORTUNITIES
They could sponsor more town events (not just in-store events)
to increase recognition of the brand name and make customers
more aware of the products they offer.
Expand private label selection lower price for customers
Class offerings that educate the new consumer about a new
product. (Cooking classes.)
International expansion
More recently, Whole Foods has implemented a new marketing
strategy to combat the perception of high prices.
Promote and build brand identity with organic foods, eventually
leading to the idea that when people think "organic" they will think
"Whole Foods."
Rewards program frequent buyer cards (like Kroger cards)
Expand prepared foods.
Customer service enhancement
Create a discount product line for lower income segment
THREATS
Increased competition from existing supermarkets that are re-
branding in order to compete with them like; Wal-Mart, HEB,
Wegman's (New York), and Publix (Southern US).
Local Farmers Markets/Independent Retail Chains
Low spend per trip due to high prices. Individuals buy the
specialty item and not the essentials.
Product recalls Ecoli and salmonella
In a recession environment, consumers are concerned with
falling home prices, lower job security, and commodity inflation
Changes in government regulations on organic food would
impact consumer spending even further.
Competitors - lower cost or imports; Trader Joes, Costco
Consumers are avoiding any products that might be
considered lavish or more than a necessity.

COMPETITIVE PROFILE MATRIX
EFE MATRIX
INTERNAL
A
s
s
e
s
s
m
e
n
t

STOCK PERFORMANCE 2007-2012
CLOSEST COMPETITORS COMPARISON 2007-2012
INCOME STATEMENT
BALANCE SHEET
FINANCIAL RATIOS
TREND ANALYSIS
Recent trends in the industry of grocery stores consist of expanding what they have to offer, trying to draw in customers
and keep customers in the store longer. Some examples of these are:
Interactive web sites
Recipes
Earning loyalty cards
Providing cooking classes (online/privately or group).
Freshly prepared onsite ready to eat meals.
Sit down spaces to eat, keeping customers onsite longer.
Salad bars and coffee areas.

There is also a negative side to industry trends too. With the recession being the main reason for these,
some are however; also global problems have taken its toll on all industries. For example:
Higher gas prices
Mortgage failures
Job losses
Investment fears
Food inflation
Many grocery shoppers have begun looking for bargains. In the recent economic recession that began
to happen in 2008, the wealthy are even showing signs of taking their foot off the gas when it comes to
spending and are looking for ways to save a penny wherever they can. A 2008 survey found that many
adults are preparing more meals at home (43%), using more coupons (40%), or going out of their way
to look for lower-cost items (37%) as a result of higher food costs (Reuters, 2008).

Ref: http://www.reuters.com/article/2008/08/26/idUS192211+26-Aug-2008+PRN20080826

STRENGTHS
The company recorded revenues of $7,953.9 million during the
financial year (FY) ended September 2008, an increase of 20.7%
over FY2007.
High quality food.
Strong brand equity the Whole Foods brand is known
worldwide for its organic products.
Staff is passionate about promoting the products and sharing that
enthusiasm.
Nationally Known Organic/Natural Foods Seller
They have an amazing website with blogs, recipes, sale items,
tips, podcasts and more.
The website is well designed and explains the Whole Foods
concept very well.
Experience in the Industry
Fair labor wages for the farmers.
Financial position consistent annual sales growth
Locations based on demographics.

WEAKNESSES
US government provides money to support the corn growers
industry, but not the organic farmer-therefore companies not
utilizing organic ingredients can grow more food cheaper and
faster.
Price up to 75% higher
Viewed as a luxury shopping destination.
Weak management team
Customer loyalty is missing
Number of organic food farmers is growing, but slowly and the
supply chain for organic foods is underdeveloped and cannot
meet the needs of the American food system.
Advertising Budget very low (WOM approach)
They are known as "whole paycheck" because some of the
foods are higher priced than other grocery stores.
Diseconomies of scale
Targets a small amount of shoppers
IFE MATRIX
STRATEGIC
FORMULATIONS
SWOT MATRIX
S1, O1: Use the significant financial growth to get more
involved in the local community in order to appeal to a wider
group of potential customers

S2, O2: With it's growing presence- and more customers,
whole foods have the opportunity to make prices more
reasonable.

S3, O3: Good opportunity to use the passionate staff to make
cooking courses (classes) a noticeable attraction.

S4, O4: use experience to successfully expand into
international markets- yet still appeal to different countries
locals.

S7, O5: Expanding into other markets will require a diversified
portfolio, which if done correctly will S

S7, O7: Use company's name to create a successful growth
in prepared organic foods/ meals.





SO Strategies
W1, O1: they could sponsor some of the organic
farmers, if costs for organic farmers are lowered, they
will also be able to produce more- could arrange a
selling/ price deal between farmers and Whole Foods.

W2, O2: with prices 75% higher, would increase sales if
prices (even just certain prices) were adjusted to a more
reasonable cost.

W3, O3: In order to be truly experienced in various
industries, you need a management team who is
experienced who are also mentoring/ molding newer
and less experienced managers for the future.

W4, O5: It can and should be a strength to be viewed as
a luxury shopping destination, thus a better perception
on higher prices and value for money should be
encouraged. It can still be luxurious with a more
reasonable price range.

W8, O6: in order to appeal to a wider range of
customers without decreasing their prices, creating a
prepared foods/ meals section would appeal to more
people because of the convenience.

WO Strategies
SWOT MATRIX
S1, T1: Concentrate on strengths and what will
separate them from all the other stores in order to
maintain consistent growth rates.

S2, T2: promote brand image in order to make
customers and potential customers aware that they
cannot receive the same quality and value for
money anywhere else except for Whole Foods.

S3, T3: The employees can have a huge influence
on the atmosphere of the stores, would be
important to use employee passion to make
customers feel more at home and thus increase
likelihood on giving tips.

S4, T4: it's important to use staff and industry
experience to either inspect foods more, maintain a
strict organic profile in order to prevent product
recalls.

S5, T5: By maintaining a good relationship with
farmers, government regulations may have less of
an impact on the organic food than farmers may
fear.
ST Strategies WT Strategies
W1, T1: support farmers in order to help them
keep cost of farming certain foods

W2, T2: highlight/ promote the benefits of
buying from Whole Foods compared to
farmers markets.

W3, T3: With new brands expanding into
markets, cant afford to be stuck with assembly
line trends.

W4, T4: Sales should attempt to remain
consistant, and not fluctuate with seasons.

W5, T5: With government regulations and the
increase of organic farms, quality may
decrease. Important that Whole Foods
maintains high level of consistency in food
quality.
SPACE MATRIX
GRAND STRATEGY MATRIX
With the way in which the business is currently situated it would be in their best interest to use quadrant I, as they can
maintain there hold while integrating themselves into new investments and further move them forward.

BCG MATRIX
IE MATRIX
MATRIX ANALYSIS
Alternative Strategies IE SPACE GRAND BCG Count
Forward Intergration x x x 3
Backward Intergration x x x 3
Horizontal Intergration x x x 3
Market Penetration x x x x 4
Market Development x x x 3
Product Development x x x x 4
Related Diversification x x 2
Unrelated
Diversification x 1
Horizontal
Diversification x x x 3
Joint Venture
Retrenchment
Divestiture
Liquidation
POSSIBLE STRATEGIES
Market expansion within foreign markets
Europe
Canada
UK
Expand advertisement budget
Ecommerce
Television
Product development
Prepared meals
Expand on Green initiatives







QSPM
FUTURE PLANS
Expand online services
Express stores
Expansion into foreign markets
Celebrity marketing and reality show market
OBJECTIVES
Objectives listed in 2009 Founders address within
the annual report
More aggressive on purchasing side of business
Create more value for customers on pricing side of
business
Be better stewards of capital
Have smaller and less expensive stores
Promote healthy eating education





RECOMMENDATIONS
Market expansion to foreign markets by adding 5
stores $10,000,000
Expand advertising budget to increase market
share and sales $2,500,000
Expand product to include prepared foods that will
compete with diet system competitors $2,500,000


Total cost = $15,000,000
I
M
P
L
E
M
E
N
T
A
T
I
O
N
S

EPS/EBIT ANALYSIS
$ amount needed: 15M
Stock Price: $20
Tax rate: 35%
Interest rate: 4%
# of shares outstanding: $1.283M
POTENTIAL ISSUES
Organic food competitors increasing
Federal regulations
Potential future recessions
Crop disease control
Employee compensation
BALANCE SCORECARD
SOURCE OF INFORMATION
Whole Foods Market Reports First Quarter 2009 Results,
http://www.wholefoodsmarket.com/company/pdfs/Q109financial.pdf
Whole Foods Market 2009 Annual Report
http://www.wholefoodsmarket.com/company/pdfs/ar09.pdf
YCHARTS
http://ycharts.com/companies/WFM/eps_ttm#series=type:company,id:WFM,calc:eps_ttm&zoom=&start
Date=6/30/2007&endDate=12/31/2009&format=real&recessions=false
Wholefoods Marketing Information
http://www.wikinvest.com/stock/Whole_Foods_Market_(WFM)
Wholefoods Historical Stock Information
http://finance.yahoo.com/q/hp?s=WFM&a=08&b=31&c=2009&d=08&e=31&f=2009&g=d&z=66&y=594
Wholefoods Competitor Information
http://knowledgeproblem.com/2009/08/10/evolving-competition-whole-foods-costco-trader-joes/
Wholefoods SWOT Information
Business Source Complete datamonitor.com
Growth Rates

Market Trends
http://www.reuters.com/article/2008/08/26/idUS192211+26-Aug-2008+PRN20080826