Term Paper on "Inputs Diagnosis"

Term Paper 4 pages (1367 words) Sources: 4

[EXCERPT] . . . .

Input Diagnosis

In business, the way a firm deals with critical challenges is a key to its overall success. To remain competitive, a number of different strategies have been introduced. That is designed to improve innovation and ensure executives are not overlooking critical areas. In the case of Whole Foods, the company is facing increasing amounts of pressure in maintaining their customer base and reaching out to new cliental. (Colvin, 2013) (Frankel, 2013) (Meador, 2009) (Patton, 2012)

To fully understand how the company is able to achieve these objectives requires looking at Porter's competitive strategies and the Nadler Tushman Congruence Model. This will be accomplished by carefully examining: which of one of Porter's strategies fits with the primary goals of the firm and determining the inputs that apply (from the Tushman Congruence Model). Together, these elements will highlight the strengths and weaknesses of Whole Foods. It is at this point when these insights will help to make the company more competitive over the long-term.

Discuss the organization's strategy and classify it according to Porter's three generic competitive strategies.

The basic strategy that Whole Foods is using is to showcase their locations as a place where people will have a pleasurable shopping experience. At the same time, they want to offer consumers with the ability to purchase organic foods from a firm which is concentrating on providing everyone with quality. This is different from many of the large retailers such as: Safeway, Kroger, Wal Mart and Super Value. In these cases, the firms want to attract customers by having reduced prices on a larger selection of products. They are not concerned about where it comes from or the quality in contrast with Whole Foods. (Colvin, 2013) (Frankel, 2013) (Meador, 2009) (Patton, 2012) ("Porter's Five Forces," 2013)

This basic strategy; is what has helped to make Whole Foods the largest organic retailer and is why they are concentrating on opening locations with at least 50 thousand square feet. The results are that customers have begun to focus on the quality of the foods they are purchasing and how this can enhance their overall levels of health. These factors are the primary reasons, why the company has been able to create a unique market share among a new segment of cliental. (Colvin, 2013) (Frankel, 2013) (Meador, 2009) (Patton, 2012) ("Porter's Five Forces," 2013)

The strategy of Porter's model that would apply is the Five Forces approach. Under these guidelines, it is identifying rivalries, the threat of entry, substitutes, the bargaining power of buyers and the bargaining power of suppliers. The biggest rival that is facing Whole Foods is Trader Joes. They are offering similar products and low prices. This is designed to siphon market share away from the company through having cost savings and the same quality. (Colvin, 2013) (Frankel, 2013) (Meador, 2009) (Patton, 2012) ("Porter's Five Forces," 2013)

The threat of new entrants is showing how other firms can use their economies of scale to offer similar products and drive down costs. Wal Mart is the biggest danger, with them having a line of organic foods and the best pricing structure inside the sector. This is illustrating how other firms have recognized these challenges and they have begun offering similar choices to cliental. (Colvin, 2013) (Frankel, 2013) (Meador, 2009) (Patton, 2012) ("Porter's Five Forces," 2013)

New substitutes, is when many large retailers have begun to introduce healthy-based products and organic foods into their stores. In many cases, they have received USDA certification and begun labeling them as organic. To deal with these challenges, Whole Foods has created its own private label called 365 Organic Value. This is a low cost alternative which is designed to directly compete against these new products. (Colvin, 2013) (Frankel, 2013) (Meador, 2009) (Patton, 2012) ("Porter's Five Forces," 2013)

The buying power of customers is showing how Whole Foods is focused on meeting these objectives. This is achieved through them reaching out to a unique class of consumers, who want to purchase high quality organic products (from a firm that cares about the practices of their whole sellers). This is reaching… READ MORE

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