Strategic Management-Whole Food Market
Whole Foods Market competes in the industry of grocery products. As it come to light from the study his industry is highly competitive. This market’s traites are the low prices and convenience are the dominant factors driving consumers to the supermarkets today. The emergence of the supermarkets in the 1930s was result of a three major changes in society: 1.,The shift in population from rural to urban areas.; 2., An increase in disponsable income.; 3., Increase mobility throught ownership of automobiles. The industry of grocery goods is characterized by low margins anf continous donward pressure on price, made evident by coupons, weekly specials, and rewards cards. The firms come up with innovations like the inclusion of bakeries, banks, pharmacies, and even coffee houses co-located within the supermarket. Supermarkets have also tried to cater for the changing tastes and preferences of society such as healthier diets and low carbohydrate foods. The moderate changes to strategy within supermarkets have been imitated by competitors, which are returning the industry to the state of price competition. In an attempt to offer an objective criterion for market definition, the Horizontal Merger Guidelines state that the antitrust agencies must delineate the product market as a group of products such that, if produced by a hypothetical profit-maximizing monopolist, would be able to profitably impose at least a small but significant and nontransitory increase in price.
According to Porter, the five forces that are present in competitive industries combine to impact its attractiveness and ultimate profit potential.
BUYERS:The impact of "Buyers" in relation to Porter's model refers to the collective bargaining strength of the industry members' customers. The outlets operates by the chains and the supermarkets have a preeminent place in this market. The low prices and convenience are the dominant factors driving consumers to the supermarkets today. It appears that the industry's customers wield a fairly significant amount of power. In addition, the general trends taking place in retail sales is generally to the advantage of the larger chains. The other dimension of buyer power relates is responsible for generating the derived demand for the manufacturers' products. This derived demand is channelled through the customers' outlets and adds to their already substantial power base. The trends in consumer shopping behaviour affects the choice of distribution, at the same time it is very important to state that the grocery industry is perhaps the safest and profitable industry in the whole world. The reason for this is that people required food in the past, require now and will require in the future. ...