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Whole Foods Cast Study Analysis
Whole Food was founded in the year 1978 in Austin, Texas, as a small natural foods store by John Mackey and Rene Lawson Hardy (Johnston, 2015). Despite the entrepreneurial struggle in the first two years since its establishment, the company was able to create a good foundation that would enable it to become the world's top organic and natural foods dealer. The company has been able to dominate organic food market by expanding the business to various regions across America and Europe. The company has also acquired other natural food companies in an attempt to realize a competitive advantage over rival businesses. Today, Whole Foods is the world's leader in organic and natural foods.
Public Relations: Challenge or Opportunity
The main public relations opportunity in Whole Food relates to its capacity to acquire already existing businesses. The management team has always worked hard to ensure that the company establishes an extensive customer base. The management team understands that by increasing client base, the company will increase sales and as a result, get more returns on investment. The company has acquired various businesses, for example, Wild Oats, in the attempt to expand its operation across the country (Johnston, 2015).
Acquiring new business has helped to ease the competition in the market. Thus, the company can concentrate on improving the quality of its services and products offered to the customers. This has helped in increasing customer satisfaction. Higher customer satisfaction, in turn, helps in increasing their loyalty to the business. Loyal customers assist in marketing the company through the word of mouth. Thus, continuous acquisition of different companies has helped Whole Food to expand its activities and reach out to many customers (Johnston, 2015).
The main public relations challenge facing Whole Food relates to lawsuits. Whole Food has faced several legal battles as a result of its operational strategies. To ensure that no company does not create a monopoly on the market, Federal Trade Commission (FTC) is involved in regulating business plans, for example, by merging organizations (Johnston, 2015). Thus, when Whole Food decided to merge with Wild Oats, FTC interfered to ensure that the company does not manipulate the market and exploit the customers. FTC's case against Whole Foods is one of the major lawsuits that the company has faced during the period of its operation.
In June 2007, the FTC filed a formal grievance against Whole Foods. The complaint maintained that the acquisition of Wild Oats by Whole Foods would violate Section 7 of the Clayton Act and Section 5 of the FTC Act (Johnston, 2015). According to FTC, the merger would interfere with these sections through the elimination of competition between two competitors. Wild Oats and Whole Food are close competitors in several markets throughout the country. The main fear of the FTC was that the abolition of competition would result in an increase in prices for different food products offered by the company. The FTC was also afraid that the merger would reduce the quality of products and services (Johnston, 2015). This would significantly affect consumers because they would be acquiring poor quality products and services at a very high price.
Whole Food, through its management team, responded to the FTC's complaint by filing a formal legal response. This helped the company in ensuring that FTC understands the importance of the merge, particularly concerning the customers. Additionally, the company employed released media statements and a weblog to inform the public about the merger (Johnston, 2015). Through the use of the Internet, the company was able to provide reliable information to employees, consumers, and shareholders about the ongoing situation.
The other key public relations challenge affecting Whole Food was the Mackey's Forum Posting Scandal. Mackey was accused of making a fake online identity with the aim of defending, praising, and creating the impression of support for supporters and the company (Johnston, 2015). Mackey's posting negatively affected the reputation of the enterprise. Some individuals, for example, Zac Bissonnette, questioned why a large company like Whole Food would employ a stupid person to run the company. To many people, Whole Food has hired the wrong person to run the business.
Whole Food Strategies and Tactics
The primary strategy employed by Whole Food relates to merger and acquisition of rival companies to eliminate competition. The management of Whole Food views competition as the primary challenge affecting the company's effort in fulfilling the set goals (Johnston, 2015). Thus, by eliminating the rival business, the company can establish itself, acquire more customers, and increase sales.
The other strategy employed by Whole Food is the use of the Internet to engage with the customers, employees, and stakeholders. Whole Food has a blog that is used to post different information with the attempt to educate the consumers about the strategy that the company is employing to improve its services and products. Through the blog, the company can collect feedbacks from the customers and understand their needs (Johnston, 2015). The information gathered from the customers guides the company in producing products and services that meet the needs of all clients.
Perceived Outcomes of the Organization's Actions
The perceived outcome of Whole Food's action is the realization of competitive advantage over other companies. Through merger and acquisition of rival businesses, the company would eliminate competition (Johnston, 2015). Without competition in the market, it will attract more customers. By establishing itself and increasing the numbers of products and services that satisfy the needs of clients, the company will enjoy completion advantage and create market entry barriers.
Another perceived outcome is expanding its business to various parts of the country. By increasing customer base, the company will increase its financial capacity. This will offer adequate resources required to start new branches in different states in the U.S. Opening stores in every state, the company will expand its operation and sell its services and products to more customers (Johnston, 2015).
Assessment of the Organization's Actions
Through the strategies and tactics employed in the operation of Whole Food, there are measures taken by the company that would have a positively impact on it while affecting others. To assess different actions taken by the organization, it is important to perform a SWOT analysis of the enterprise. The main strength of the company includes offering natural food products and extensive customer base. The weakness of the company is the adverse publicity relating to the lawsuit the company faces (Johnston, 2015). The opportunity of Whole Food is the increase in the number of customers acquiring natural food products. The other opportunity relates to the reduction of competition in the market. The main threat likely to affect the company is the entrance of a foreign company into the natural food market.
Having dominated the local and foreign market, the company has a large number of customers. Thus, it needs to improve the quality of services and products offered in the market. This will help in increasing customers trust to the company and ensure that the clients remain loyal to the enterprise even when new businesses enter the market. Additionally, the company needs to come up with initiatives that benefit people in the community. This will help the company to give back to the enterprise and improve the living standards of people in the society.