Analysis of Whole Foods Inc Essay Example | Topics and Well Written Essays - 2500 words

Analysis of Whole Foods Inc - Essay Example Analyses used in this study are Five Forces, Life Cycle Assessment, Value Chain Analysis, SWOT, PEST, and 7S. Buyer power- Whole Foods faces a weak buyer power because buyers are fragmented and do not have the particular influence on product or price. Organic food is sold in different 14,500 supermarkets in the States, so buyers do not have a single power to be able to dictate their price on the retailers. But if we consider Whole Foods to be the buyer, then we can consider this company to have a very strong buyer power because it can purchase and command a price from direct suppliers, and can buy out the competition.   A threat of new entrants. The threat of new entrants to the industry is low because of the big amount of investment needed to compete in the industry. The average capital cost of opening a food market site amounted to $15.1 million in 2007, plus the inventory cost of $ 850,000. Whole Foods Market pre-opening expenses averaged $2.6 million for the 21 stores they have opened. It is doubtful whether the products of the small manufacturers can reach the same shelves as with Whole Foods.   A threat of substitutes. There is a low threat of substitute because of the growing concern of people on wellness products. Whole Foods succeeded in building a competitive advantage. Their prices are comparatively higher than conventional foods, but they have established a niche in the industry because of the perceived needs of costumers.   A threat of rivalry - There is a high degree of rivalry in the industry because of the emergence of competitors in the industry. The rivalry is intense because competitors like Fresh & Easy Neighborhood, Sunflower Farmers Market. Traders Joe and Fresh Market offered several competitive moves. Competitors applied innovations, features, and lower pricing, For instance, Fresh Market developed small markets with the feel and atmosphere of an open European style market.