Whole Foods Video Project

Image representing Stupeflix as depicted in Cr...

Image via CrunchBase

Check out the video I created using Stupeflix!

It contains photos of products sold at Whole Foods Market.  Enjoy!

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The Supermarket and Grocery Store Industry’s External Environment

There are many external factors that affect a company and even an industry.  Whole Foods competes in the Supermarket and Grocery Stores Industry in the U.S. (44511).
In the Mind Map below, created using XMind, you can see the four external factors that influence this industry.  These environments are Technological, Political, Economic, and Socio-Cultural.

Political Environment


Monopoly (Photo credit: thatmushroom)

The factors I chose to discuss in this external environment include regulations to maintain a competitive playing field for all companies within the industry.  There have been many regulations set out by the government to ensure that monopolies do not exist within industries.  One of the regulations is the Sherman Antitrust Act which prohibits monopolies and monopolistic activities which would drive competitors out of the industry.

You do the scanning yourself and then pay by S...

You do the scanning yourself and then pay by Switch. Quite a novelty the first or second time you use it. I am easily pleased! (Photo credit: Wikipedia)

Technological Environment

There have been many technological advances within this industry.  One of the more recent advances is the introduction of self-checkout registers in grocery stores.  This gives people the opportunity to check themselves out at the grocery store instead of waiting in line for an employee to do it for them.  This eliminates the amount of people needed to run the register because by having four self-checkouts, you only need one person to run them all, eliminating about three employees.  This may be saving some money for the companies who have installed these checkouts.  Also, a customer may have a good experience in this location because they were able to purchase their items more quickly through the use of a self-checkout, so they may return to that store because of this experience.


Dollar (Photo credit: Images_of_Money)

Economic Environment

The recession seems to have hurt many industries due to less shopping, but the Supermarket and Grocery Store industry did rather well.  People were making their meals at home rather than spending money each day on meals.  They were doing more grocery shopping and home preparation.  The only problem is, as the recession ends and the economy is stronger, people may shop in grocery stores less and eat out in restaurants more.

Sex or gender?

Sex or gender? (Photo credit: AJC1)

Socio-Cultural Environment

Gender and income play an important role in this industry.  Since women are a majority of the grocery shoppers, then the stores have to gear their marketing, promotions, and store set-up to what women would prefer.  Also, they need to determine where these middle income ($40,000+) reside and build their stores there, since this income level does a majority of the shopping in this industry.



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Whole Foods Revenue & Net Income Compared to Competitors Kroger and Safeway

Whole Foods Market

Whole Foods Market (Photo credit: Wikipedia)

The Supermarkets and Grocery Store Industry in the United States is extremely competitive.  With industry revenues of $491.2 billion, it is important to determine the revenue contributions from the major players in the industry.  Not only is revenue contribution an important aspect when comparing financials, but so is net income.  A company may have high revenues, but if their costs are also high, they will have little profit or net income.  It is important when looking at the major players, that you compare their financial information.

This post reflects important financial information involving Whole Foods and its two competitors, Kroger and Safeway.  The financial information I chose to display in two separate graphs are Revenue and Net Income.

This chart represents revenues for Whole Foods, Kroger, and Safeway over a three year period.  As you can see in the graph, Kroger has significantly higher revenues than both Whole Foods and Safeway.  This is when it becomes important to look at the net income of the three companies.  While Kroger and Safeway both have much higher revenues than Whole Foods, it is important to determine if their profit is also much higher than Whole Foods.

In the most recent year that information is available, Net Income for the three companies is fairly similar.  All three companies hover around the $500,000 mark.  This is why it is important to look at multiple aspects of financials when comparing companies because from the revenue graph it looks like Kroger is much better off financially than Safeway and especially Whole Foods.  However, if you look at this graph, Whole Food’s net income rises over the three years while both Kroger and Safeway rise from 2009 to 2010 and then fall from 2010 to 2011.  Whole Foods has the opportunity here to generate higher net income than these two competitors if they can keep their costs low.

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Whole Foods Introduction and SWOT Analysis


Whole Foods

Whole Foods (Photo credit: bookgrl)

Company Introduction

Whole Foods Market is a natural and organic supermarket chain that was established in Austin, Texas in 1980.  Four businesspeople in Texas decided that that natural foods industry was ready for a supermarket strategy.  Whole Foods grew through acquisitions of other natural and organic supermarkets like Food For Thought and Wild Oats Markets.  Whole Foods Market now has locations outside of the United States, in Canada and the United Kingdom.

The Supermarket and Grocery Stores industry is extremely competitive.  However, Whole Foods is able to compete in this market because many consumers are interested in the natural and organic foods that Whole Foods offers.

In 2011, Whole Foods recorded sales of $10,107. 79 million, up 10.9% from 2010, and net income of $342.6 million, up 28.2% from 2010.

SWOT Analysis

Information from DATAMONITOR

Strengths Broad Product Offerings 

- Perishable foods to appeal to natural and organic foods and gourmet shoppers

- Produce, seafood, grocery, meat and poultry, bakery, prepared foods and catering, specialty (beer, wine, and cheese), coffee and tea, and much more

- Catering services with made-to-order foods available for purchase

- Fresh foods provide competitive edge

- Address multiple customer segments

Focused Growth Strategy

- Opened 16 new stores in FY2010 and 18 new stores in FY2011

- FY2012: 6 stores in first quarter, 3 stores expected in second quarter

- Opened a store in Glasgow and London

- Plans to open 28-32 stores by FY2013

- Compounded annual growth rate (CAGR) of 26% during 1991-2011

Strong Focus on Right Sizing of Stores

- Right size store for locations: Downsized 20 leases by average of 13,000 sq. feet each

- Larger-format stores in dense urban areas, and smaller stores have potential to earn high returns

Weaknesses Product Recalls Affect Brand Image 

- Recalls due to contamination

- 2012 – Whole Foods Market Dairy Free bakery products recalled because they contain milk which is not on labels

- 2010 – Whole Foods Market of Austin, Texas recalled seven types of cheddar cheese due to possible risk of E. coli or listeria contamination

- 2009 – Whole Foods Carob Energee Nuggets recalled due to potential Salmonella contamination

Weak International Operations

- Only seven stores in Canada and five stores in the UK

- Intends to open new stores, but its operations in these markets are not large enough to derive economies of scale

- Competitors receive benefits because of global operations

Increasing Rental Expenses

- Rental leases increasing significantly

- 2011 = $321,6 million, 2010 = $303.5 million, and 2009 = $281.9 million

Opportunities Increasing Demand for Organic Products 

- Rising awareness about importance of natural foods in diets

- Sales of organic foods increased three fold since 2000 exceeding $28.6 billion

- Rose 7.7% in 2010

Increasing Popularity of Private Labels will Improve Margins

- Private label popularity increases as price becomes a concern

- Private label brands accounted for 17.4% of US food products sales in 2010 (was 15.2% in 2006)

- Private-label branded products industry is worth $90 billion in the U.S.

Trends Support Increased Demand for Food Products

- Eating healthy and at home is an increasing trend

- 92% of grocery shoppers view home-prepared foods as a much healthier meal

Threats Intense Competition May Have an Adverse Effect of Profitability 

- Food retailing is an extremely competitive industry

- Competitors: local, regional, national, and international conventional and specialty supermarkets, natural foods stores, warehouse membership clubs, smaller specialty stores, farmers’ markets, restaurants

Stringent Regulations Impose Additional Liability

- Laws and regulations related to health, sanitation and food labeling

- Failure to comply with standards results in penalties

Whole Foods Market

Whole Foods Market (Photo credit: Wikipedia)

The rising popularity of natural and organic foods has led to the success of Whole Foods Market.  After looking at their SWOT analysis, some suggestions for Whole Foods would be to expand more globally.  There are many grocery retailers that have a high presence in the global market, and if consumers outside of the U.S. are considering the importance of natural and organic foods, then Whole Foods would do well in the global market.  Whole Foods also needs to be careful with some of their products.  Product recalls can have a negative affect on their brand image.  In conclusion, Whole Foods does have many strengths in the grocery industry, as well as many opportunities.
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Twubs.com: Searching Hashtags

Source: Photo from Twubs.com Main Page

Twubs.com is a useful website for Twitter or Twitter users to search topics that have been “hashtagged.”

What is a #hashtag?
“A user-created standard for identifying tweets belonging to a topic. Simply include the tag in your tweet and other people searching for the same tag will be able to find it.”
Source: Twubs.com  

Twubs.com is a useful website for many reasons.  You can create groups, event pages, content pages, or find information on any topic.  If it has been tweeted with a hashtag, that topic can be searched.
Source: http://www.go2web20.net/app/?a=twubs

With this website, you can search any topic you choose.  It can be sports, hobbies, movies, and just about anything else!  If anyone has written the phrase with a hashtag (#) it is now a Twub.

Follow Twubs on Twitter: @twubs

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Organizational Layout and Revenue Contribution for Apple, Inc.

Apple Store

Image via Wikipedia

Organizational Chart
An organizational chart, also called an org chart, is a diagram that shows the structure of an organization.  The chart also shows relationships between different divisions in an organization and the ranks of the divisions.

Source: http://www.orgchart.net/wiki/Main_Page

Below is an organizational chart of Apple, Inc. and the revenue generated from the divisions within the company in 2010.

The divisions and their contributions include:
1.  iPhone Related Products – $25,179,000,000
2.  Macintosh Sales – $17,479,000,000
3.  iPod – $8,274,000,000
4.  iPad & Related Products – $4,958,000,000
5.  Other Music Related Products – $4,948,000,000
6.   Software Service – $2,573,000,000
7.  Peripheral & Hardware – $1,814,000,000
Total Revenues for 2010 was $65,225,000,000

(Click on image to enlarge)

Source: Disclosure from LexisNexis


Revenue Contribution

The organizational chart above showed the revenue contributions for each segment of Apple, Inc.  Below is a pie chart of the same information, but shown as a percentage of Apple’s total revenue for 2010.

(Click on image to enlarge)

Source: Disclosure from LexisNexis

As you can see from the graph, iPhone Related Products (38.6%) and Macintosh Sales (26.8%) make up the majority of revenue generated for Apple, Inc.

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Apple, Inc. Mission Statement, Business Description, and Company Vision

Image representing Apple as depicted in CrunchBase

Image via CrunchBase

Mission Statement:  “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork, and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad which is defining the future of mobile media and computing devices.”
Source: FAQ on Investor Relations Apple Inc. Website

Business Description:
“Apple has an “i” for revolutionary technology. Since its release, the company’s iPhone has spurred a revolution in cell phones and mobile computing. It also continues to innovate its core Mac desktop and laptop computers — all of which feature its OS X operating system — including the iMac all-in-one desktop and MacBook portable for the consumer and education markets, and the high-end Mac Pro and MacBook Pro for consumers and professionals involved in design and publishing. Apple scored a runaway hit with its digital music players (iPod) and online music store (iTunes). Its iPad tablet computer could become another game-changer in the consumer market. Apple gets more than half of its sales from outside the US.”
Source: Hoover’s Inc.

“Apple Inc. (Apple) designs, manufactures and markets a range of personal computers, mobile communication and media devices, and portable digital music players, and sells a range of related software, services, peripherals, networking solutions, and third-party digital content and applications. It’s products and services include Macintosh (Mac) computers, iPhone, iPad, iPod, Apple TV, Xserve, a portfolio of consumer and professional software applications, the Mac OS X and iOS operating systems, third-party digital content and applications through the iTunes Store, and a range of accessory, service and support offerings. The Company sells its products globally through its retail stores, online stores, and direct sales force and third-party cellular network carriers, wholesalers, retailers, and value-added resellers. As of September 25, 2010, the Company had opened a total of 317 retail stores, including 233 stores in the United States and 84 stores internationally.”
Source: LexisNexis Company Disclosure

Vision Statement:  “We believe that we are on the face of the earth to make great products and that’s not changing. We are constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when we’re wrong and the courage to change. And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well.”
Source: CEO Tim Cook said this during a conference call with investor.  Found on the Apple Discussion Board.

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Remarkable Apple Products

Apple Store in Downtown Montreal

Image via Wikipedia

Watch this short video of photos of some amazing Apple products!  Most of these pictures were taken of products at the Apple Store in Orland Park, Illinois.  The rest of the photos are taken of products that my family and I own.  Products in this video include the iPod, iPod Touch, MacBook, and iPad.

This video was created using One True Media.

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Market Shares of the Key Players in the Computer Manufacturing Industry

computer monitor

Image by Mediajon via Flickr

The major companies in the Computer Manufacturing Industry are Hewlett-Packard, Dell, IBM, Apple, and Oracle.  These companies make up approximately 80% of the market share.  The industry, as a whole, has had an annual growth rate of -2.5% from 2006 to 2011.  The growth rate is expected to fall to -6.9% from 2011-2016.

Market Share

Market share is the percentage of an industry or market’s total sales that is earned by a particular company over a specified time period.  To calculate market share, you take the company’s sales over the period and dividing it by the total sales of the industry over the same period. This metric is used to give a general idea of the size of a company to its market and its competitors.
Source: Investopedia.com

It is important to look at the concentration of the Computer Manufacturing Industry, because the more concentrated a market, the more market share one company has which may lead to a monopoly and less competition.

Herfindahl-Hirschman Index

To find the concentration of a company, you must calculate the Herfindahl-Hirschman Index (HHI).  It is calculated by squaring the market share of each firm competing in a market, and then summing the resulting numbers. The HHI number can range from close to zero to 10,000.

HHI for Computer Manufacturing Industry
- Hewlett-Packard: 25.1%
- Dell: 21.5%
- IBM: 15.4%
- Apple: 14.3%
- Oracle: 4.6%
Square each of these numbers and add them together:
630.01 + 462.25 + 237.16 + 204.49 + 21.16 = 1,555.07

“The U.S. Department of Justice considers a market with a result of less than 1,000 to be a competitive marketplace; a result of 1,000-1,800 to be a moderately concentrated marketplace; and a result of 1,800 or greater to be a highly concentrated marketplace.”
Source: Investopedia.com

The Computer Manufacturing Industry has an HHI score of 1,555.07, meaning the industry is moderately concentrated.  Companies find this number important because they want to have a part in many industries in case one industry is more concentrated.  On the graph below, you can see that the industry is moderately concentrated because there are five key competitors owning approximately 80% of the market share combined.

Market Share information from IBISWorld Industry Report (Industry 33411a)


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Select External Environment Factors Influencing the United States Computer Manufacturing Industry

The Computer Manufacturing Industry is responsible for the manufacturing, designing, and assembly of personal computers (PCs), laptops, handheld computers and servers.  The revenue for this industry is expected to decline at an average annual rate of 2.5% over the period.  However, demand for computers has increased over the past five years as more Americans start to own computers.  The fierce competition between companies in this industry, like Apple, HP, and Dell, drive them to continuously differentiate their products from the rest.



Click on image to expand view

(Information from IBISWorld 33411a Computer Manufacturing in the US Industry Report)

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