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Whole Foods in Canada Case Solution & Answer

Whole Foods in Canada Case Solution

Retailer Description & Background

The entrance of Whole Foods in Canada is because of future research process of blue sky after every five years with the involvement of customers, staff and vendors of Whole Foods. They all participated in the session of open-minded brainstorming. By research of 1998, it was the first time when a store was launched out of United States. Whole Foods opened about eight stores in Canada, four of which were in Ontario whereas other four was opened in British Colombia representing no more than 2% of the operation of Whole Foods. The stores of the company in Ontario were launched in the late 2012. The development store was designated in a manner that it give the impression of a combination of services provided like beauty items, fresh seafood, prepared foods, and sushi. It was initial efforts of the company for the expansion of its business roots in different regions of Canada. As in 1999, except 2008 which was the year of great recession, the growth rate of sales for each of the store of Whole Food Market was about 4% a year. The growth rate of sale has also shown to increase to 7% and 15% in the year 2004. This increase in the growth rate of sale is due to the demographics of the customers which is the first priority of the organization. As it provides a one stop solution to all its customers as per their needs.The shopping experience of the Canadian customers’ is full of fun and excitement by the efforts of knowledgeable and passionate employees which increases the opportunity of customer repetition and more generation of revenue.

The reputed position of the company in market is due to its supermarkets’ segments of organic and natural food. John Mackey founded the company in Austin, Texas. Initially the company was named as Safer Way Natural Foods in 1980, but after its merger with Clarksville Natural Grocery it turned to open its first grocery store which was named as Whole Foods Market.  (Martrous, 2016).

The main motive of the expansion of company in Canada is to sell the products that are free from non-beneficial and saturated fats. There is an utmost clarity that the company’s products are the most expensive ones than the products offered by other organizations. This is due to reason that Whole Foods’s motive is the production of food items that are free from harmful chemicals. (Lawrence Fernandes, 2018).

The growth strategy of the company is to open new stores in national and international markets and seize the market share. The company always seeks for greater dominance in those markets where the company already has product offerings. The company is looking forward to either open new stores in areas where it has observed an opportunity of an increased demand for organic foods by customers or to expand in other market segments to increase the products’ sales.

The organic market was originated in 1990s and within agricultural industry it has been positioning itself in a conventional market. The organic products market has shown growth as it has increased from $18 billion US dollars in 2002 to $50 billion US dollars in 2008. An area of about millions in hectare is being managed for the farming of organic food. More than 130 countries are certified for the production of organic food products. The organic product market of United States flourished since 2009 with the market rate of about $26.6 Billion US dollars. On the contrary, the organic product market for sale in Canada according to 2008 was about CA $2 Billion a year.  (Zahaf, 2012).

External Environment

The market for the food products is growing in Canada. At the retail level, the sale of the grocery item continue to rise, also the demand for products that are in nutritional value, high quality and offer unique value. In Canada, the best opportunities exist for the value added frozen entrees, ethnic foods, frozen seafood and value-added fresh produce.

Additionally, the ability of individuals to buy discretionary service and products is determined by the per capita disposable income. In case of the reduced per capital disposable income; the consumers limit their purchases to more affordable brands or essential items, which in turn curbs the revenue growth of the industry as a whole. In future, the per capita disposable income is anticipated to increase, hence representing a potential opportunity for the companies operating in supermarket and grocery stores’ industry. In the Canadian supermarket industry, the supermarket and grocery stores is exposed to some opportunities and threats, such as the slight growth in the per capita disposable income and rising level of consumer confidence provided an optimal business environment. The revenue of the industry in Canada is stifled by the proliferation of super centers as it provided one-stop shopping experience to customers and increased price-based competition.

Environmental Factors

The population in Canada have genuine concern for the environment and prefer to buy from those companies which act responsibly with regard to protect the environment where they live in. Such attitude of consumers has definite influence on how Whole Foods plans as well as implement this. The longstanding concern of customers for environment supports continuing government support for environmental protection regulation. This indicates that the environmental concerns affects the purchasing decision of customers & that an increasing number of customers are seeking actively green and environmentally friendly products and services. These preferences driving the eco-innovation and integration of sustainable business practices in essentially each and every industry.

The Whole Food Market organization is working with a mission to produce recycled products that are environmental friendly. The main drivers which affect the Canadian growth includes;

  1. Environmental Regulation And Policy: it includes environmental regulation, direct government spending & investment in environment and environmental incentives to encourage environmental investment
  2. Economic and financial drivers: it includes access to developing markets and energy cost
  3. Consumer demand: for environmentally friendly practices and products
  4. Environmental management practices: in the sector of business such as green purchasing policy, life cycle assessment & other environmental business practices

In addition to the above discussed drivers, there are some trend which shapes the way in which the company operates, it includes

  1. Trend towards pollution prevention is blurring the lines between environmental protection practices and traditionally well-define denviron mental sector
  2. Trend towards diversification means new environmental markets including carbon emission reduction or renewable energy give rise to new type of demand of worker.

The substantial changes to these key drivers or trends would have a significant effect on the growth of business in future. Particularly, rise of market for carbon mitigation and rising cost of energy have a potential to drive the investment across industry………….

 

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