Business Development Report: Whole Foods Market Growth Strategies

This report provides a comprehensive analysis of Whole Foods Market's current market position and offers strategic recommendations for business development and enhanced customer loyalty. The recommendations include enhancing customer experience through speaker series/workshops, in-house dieticians, and a customized app. Furthermore, the report suggests expanding distribution channels by offering e-grocery and home delivery services, leveraging Amazon's delivery service. It also proposes horizontal diversification by adding non-food products and services aligned with the company's core offerings, such as eco-friendly home furnishings and in-store services like naturopathic clinics and yoga classes. The report recommends international expansion, focusing on the European organic food market, and integrating with Amazon while empowering Whole Foods employees. These strategies aim to differentiate Whole Foods Market from competitors and drive sustainable growth in a changing market environment.

Recommendations
Improving existing customer’s loyalty
The availability of organic food products is no longer a differentiator for Whole Foods Market
since competitors like Walmart have started carrying organic food products alongside inorganic
food products and are offering the same organic food products that Whole Foods Market carries
at a cheaper price. As a result, the company’s current customers have started to perceive Whole
Foods Market as being greedy (Alaimo, 2018). Therefore, it has become very important for
Whole Foods Market to work towards improving current customer’s loyalty towards the brand.
Whole Foods Market can improve customer loyalty and differentiate itself from competitors by
enhancing the customer experience. Strategies that Whole Foods Market can use to enhance
customer experience include offering speaker series/workshops on healthy living, having an in-
house dietician or naturopathic doctor, and building a customized app.
Increasing distribution channels
There is a trend in the industry towards more and more traditional supermarkets offering online
grocery shopping or home delivery option to their customers. This is to meet the changing
customer needs of convenience (Saskia et al., 2016). Consumers that are most likely to shop
online fall in the age group of 25 to 34 years old (Kempiak and Fox, 2006), which is also the
target population of Whole foods Market. Therefore, it is recommended that Whole Foods
Market start to offer the option of e-grocery or home delivery to its customers to meet their
changing needs. Whole foods Market is in a great position to offer this option to its customers as
it can use Amazon’s delivery service.

Horizontal diversification
Many competitors are also offering non-food products and services within their stores. The only
non-food products that Whole Foods Market offers are organic personal care products and
locally sourced flowers. The company should consider adding in more non-food products and
services that have similar qualities as its core offerings such as locally sourced, organic, natural,
environmentally friendly, etc., that would appeal to individuals that are interested in living a
healthy and sustainable lifestyle. An example of such offerings may include in-store services
such as naturopathic clinics and yoga classes. Another example may be eco-friendly home
furnishing such as bed linens and towels made from organic cotton without the use of pesticides
and furniture made from recycled plastic or reclaimed, locally produced wood.
International expansion
The company currently has stores located in the US, Canada, and the UK with majority of the
stores in the US. Due to the saturation in its US home market, it is recommended that the
company consider expanding to other countries. It’s presence in the UK market puts it into a
good position to expand into other European countries. European organic food market continues
to grow with Germany and France being the largest markets for organic food in the world after
US. Italy, Switzerland, Sweden and Denmark are also among the top 10 largest markets for
organic food in the world (Bio Eco Actual, 2019). Therefore, the company should evaluate these
target locations by performing market environment analysis, consumer analysis, competitor
analysis, financial analysis, and analysis of company’s strengths and weaknesses. Once the
company has identified the country that they would like to expand into based on their analysis,

they should work towards developing the right entrance strategy that aligns with the culture of
that individual country.
Integration with Amazon: Empowering employees
The organizational culture of Whole Foods Market is very different from the organizational
culture of Amazon. Whole Foods Market has a strong focus on employee satisfaction and
building relationships with customers and suppliers whereas Amazon focuses more on cost
cutting. In the case of Whole Foods Market, it would be recommended for Amazon to focus on
results rather than processes and to provide Whole Food Market employees with some flexibility
to make choices on the best way to achieve the goals set out for them especially in areas where
maintaining strong relationships with customers and suppliers matter.
References
Alaimo, D. (2018). Whole Foods is still 'whole paycheck' under Amazon, research shows.
Retrieved from https://www.grocerydive.com/news/grocery--whole-foods-is-still-whole-
paycheck-under-amazon-research-shows/534136/
Bio Eco Actual. (2019). European organic market grew to more than 37 billion euros in 2017.
Retrieved from https://www.bioecoactual.com/en/2019/02/18/european-organic-market/
Kempiak, M., & Fox, M. A. (2006). Online Grocery Shopping: Consumer Motives, Concerns,
and Business Models (originally published in August 2002). First Monday.

Saskia, S., Mareï, N., & Blanquart, C. (2016). Innovations in e-grocery and logistics solutions for
cities. Transportation Research Procedia, 12, 825-835.