(i) Environmental Analysis – External Opportunities and Threats
The demographic, economic and the socio-cultural segments would be the most relevant segments to Whole Foods Market. These segments have a direct impact on the profitability, sustainability and survivability of Whole Foods Market, and the organic food industry. The relevance of the demographic segment stems from the fact that the age structure, income distribution and population size are important factors which will influence the demand for organic products. The economic segment is relevant, as an affluent population will continue to drive and sustain demand for organic products. The socio-cultural segment is another relevant segment, where attitudes about quality of life, workforce diversity and concerns about the environment will cause a shift in diet and lifestyle preferences.
This section explains the conditions in the organic food industry that will Whole Foods with opportunities. The aging Baby Boomer generation has resulted in an increased population of people that are more informed, health-conscious and willing to spend more on healthy natural foods. These people with higher disposable income will be the main drivers for the demand of organic foods. America in general is also growing in affluence, providing Whole Foods with a larger target market. Together with the fact that Americans spend a considerable amount of their expenditure on food, organic foods have become affordable to most Americans. Urban singles with higher spending power are also set to drive and sustain demand for organic foods.
Changing consumers’ perceptions have also provided Whole Foods with immense opportunities. Consumers today perceive imported, exotic and organic foods as higher quality and expensive produce. With an emergence of new diet plans, consumers have opted for healthier and fresher foods. Other than an increase in consumption of fresh fruits, vegetables and grain-based products, vitamins and nutritional supplements have also seen an increase demand due to changes in societal trends. Americans are now more willing to splurge on healthy, organic foods. In fact, organic foods are deemed beneficial and it has since been accepted as a mainstream choice of diet. Changing preferences due to a higher proportion of women in the workforce also mean that consumers today prefer a one-stop shopping experience that is being offered by Whole Foods.
The organic food industry has seen a huge spike in growth that is expected to continue into the future due to an increase in consumption. This will provide Whole Foods Market with huge opportunities. In addition, a wave of ethical and responsible consumption has swept across America. Whole Foods’ decision to pursue sustainable activities will certainly give consumers an added incentive to purchase its organic products.
Stiff competition within the industry would be one of the key threats that Whole Foods will face. Strong competitors, coupled with...