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Ease of Entry into IndustryRetail markets are not generally viewed as easy to enter, since there is usually extreme competition involved. With the large competition within this industry, it is hard to maintain a presence unless you are a “big name brand”. One of the main reasons that this industry is hard to enter pertains to the high start-up costs involved with acquiring inventory. Not only are they required to obtain a variety of products, but they also have to establish supplier relations that are reliable and cost effective. Other variables that contribute to difficult entry include identifying an effective location and obtaining permission from regulators to build a store at that specific location. In general, the number of large grocery outlets in the US holds at a SEK17
Whole Foods Marketsteady 31,000 each year. Studies have shown that entry and exit is much more common for smaller “mom and pop” stores than for larger supercenter retailers. Management’s Agenda/IntegrityThe mission of Whole Foods Market is stated on their 10K; “We are a mission driven company that aims to set the standards of excellence in food retailing. Our success is measured by customer satisfaction, team member happiness and excellence, return on invested capital, active environmental stewardship, service in our local and global communities, and win-win supplier partnerships, among other things” (Whole Foods Market’s Annual Report). In addition to their general mission, management has implemented a growth strategy that involves successfully opening stores in existing and new areas. This expansion seems feasible especially if they continue to expand stores in areas that they are familiar with as well as new locations. In the 10K report they specify the locations they are looking for; “we typically targetpremium real estate sites, and while new stores may be as small as 20,000 square feet or as large as 75,000 square feet, the majority fall in the range of 35,000 to 45,000 square feet” (10K). Below is a graph from their 10K Report that shows their growth in stores over the past few years.18SEK
Whole Foods MarketSource: Whole Foods Market’s Annual ReportThey have also been working on the “365 by Whole Foods Market” campaign to expand their growth. “The mission of 365 by Whole Foods Market is to bring fresh, healthy, and affordable food to more people in more places every day” (Whole Foods Market’s Annual Report). This new brand allows for consumers with lower incomes to purchase products at Whole Foods and expand their customer base. With regards to integrity, WFM has a Code of Business Conduct that is applicable for all of their employees and board members. Within the code there is a section, Financial Integrity: Maintaining Books and Records, that highlights the expected behavior of each employee to ensure accurate records. In addition to this specific section, the report includes the Core Values of the company. This code is a representation of the environment that management hascreated around integrity and other core values.