Porters Five Forces With Whole Foods

Case Assignment #1 - Whole Foods Market

Whole Foods are most relevant to a demographic general environment segment. Whole Foods does extensive research on their demographic when choosing where to locate its stores and who to market their company towards. Whole Foods enters markets where the demographic is 40 percent or more educated with a college degree, they locate stores in top statistical metropolitan area, and areas with a high population density. Whole Foods main opportunity is that they have the upward hand on a niche market. They also have private label brands to help bring in more net income for the company. Their main threats are that the organic food market can be very unstable. There is such an increased demand for organic products and there is only limited supply. Organic food is in short supply because organic food only accounts for roughly three percent of U.S. farmland usage, according to the article. This could mean that Whole Foods biggest threat is their own niche market. When dealing with organic foods there is in assurance that quality natural and organic products will be available to meet our future needs, according to the Whole Foods Article.

Porter's Five Forces of Competition includes the following: Threat of New Entrants: Barriers to Entry, Bargaining Power of Suppliers, Bargaining Power of Buyers, Threat of Substitute Products, and Intensity of Rivalry Among Competitors. Threat of New Entrants: Barriers to Entry could be a tricky force with Whole Foods. When entering this market barriers are high because they must fill a store with only organic food. That means they must find all the suppliers that offer the right products for sale or either produce them. Bargaining Power of Suppliers is also a force to deal with. There are few suppliers for the organic market and that means suppliers can basically pick the price of organic food. For organic food the basic substitute doesn't exist because there aren't many suppliers. Being in this market you must deal with what there is to offer and that may mean paying a premium. Bargaining Power of Buyers isn't that much of a problem when there isn't many organic markets in the U.S. Currently in Mississippi there isn't many choices of organic food, there tends to be organic sections, which isn't that great in size. Threat of Substitute Products could be an issue but right