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!

Enhanced by Zemanta

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.

Enhanced by Zemanta

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)

Conclusion
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.
Enhanced by Zemanta

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.

Enhanced by Zemanta

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)

Enhanced by Zemanta