Inputs Diagnosis, SLP: Time Warp Whole FoodsCapstone Project

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Inputs Diagnosis, SLP: Time Warp

Whole Foods Market Input/Strategy

The following will be a review Whole Foods Market's strategy as analyzed against Nadler- Tushman's Congruence processes. An appropriate strategy that fits with Porter's forces will then be ascertained and the likely factor(s) that should affect the strategy will be weighed against the overall organization strategy. The company's inputs will also be reviewed specific critical inputs will be determined from each input category: ambient environ that provides for the inputs, policy matters persistent with the firm, available resources that the firm banks upon (that are termed as internal factors), and traditional history. A connect between the said factors and their analysis will be made to determine the crucial ones that have an impact in alignment with each other and have an effect on the strategic path chosen to be tread by the firm.

Background:

Whole Foods Market which has started its operations in 1998 had, by 2006 become a known and established name in the organic and natural foods retailer chains around the world (Meador, Britton, Phillips, and Howery)." The main ingredients of their astounding rate of success was and is the discerning eye for quality for each of their products, a selective product range coupled with high standards maintained in its employees and personnel (Meador, Britton, Phillips, and Howery). Whole Food's declared statement of mission is to "engender health and vigor through promotion of organic food that was least processed, carried the most natural flavors, and stored in the most natural way possible."

Whole Food's has strategically chosen to acquire fully owned large stores that measured at least 50,000 square feet, instead of opting and following the trend of small chain stores that ranged from five thousand to twenty thousand square feet (Meador, Britton, Phillips, and Howery). The idea behind doing so was to make shopping a pleasurable experience and take the pain out of it by providing an ambience that was enticing as well as full of sensitivity. It was Whole Food's motto to offer the customers a lively atmosphere beyond their offices and homes where they could feel relaxed and at ease (Meador, Britton, Phillips, and Howery).

It becomes pertinent here to assess qualitatively, the accruals of the company, by their pursuance of the strategies that seemed different right at the outset. In the last quarter of 2014, the total proceeds of the company was $229 million out of which they invested back $185 million in capital acquisitions, and had $44 million for cash flow (Lutz, 2014). The Company's strategies can be further understood by their pay out of quarterly dividends to shareholders that amounted to $44 million in addition to reacquiring 2.6 millions of its shares in the market amounting to quarterly dividends to shareholders and repurchased $100 million of common stock, or 2.6 million shares amounting to a hundred million dollars. The total worth of the company in the last quarter of 2014 stood at close to a billion dollars (Lutz, 2014). The financial highlights are further appreciated by the record sales, spurred by a 9% growth on a y-o-y basis, amounting to $3.3 billion. The ROA yielded a robust 14%. In this time, Whole Foods had ventured into seven new markets with its record number of thirteen new openings. Its 5.9% growth rate in 2013 was topped by a growth rate of 3.1% in 2014. (Lutz, 2014). The EPS of the company rose by 9% over its previous years' earning. The total cash flow crossed $1 billion and the available cash was recorded at $378 million, with weekly average per store recorded at $722 thousand (Lutz, 2014).

Strategy/Inputs

Since the strategies adopted by Whole Foods was meant stand out from the crowd distinctly, differentiation strategy was chosen to evaluate Whole Foods in accordance with the Porter's Three Generic Competitive Strategies (Ormanidhi & Stringa, 2008). The main focus of those adopting Differentiation strategy is on sustained efforts to keep along the path of distinction in services, products and capital or other attributes that immediately separate it from other players in the industry and afford a high value to the clients or leave an indelible mark on consumer psyche.(Porter's Generic Strategies)

This sector in general and Whole Foods in particular is facing problems of increased competition and new entrants or imitation start-ups, a global economic slowdown, and increased difficulty in acquiring property. To combat these external forces, the company has to look within and secure ways and means of retaining the attention of its clients by the right trade-off between price and quality as against the competition. The practice of Whole foods to put on offer the best quality at pricing systems that entice clients is more relevant in this niche (Porter's Generic Strategies).

Another filter that needs to be applied as a measure of its resources to its sustainability of differentiation strategy is the process and personnel quality to maintain its image perceived in the public domain. Continuous improvisation in these challenging times need research and development efforts towards products as well as generating and maintaining premium products; and in services as well through conscientious skilled and motivated personnel who ultimately provide the services (Gurau, 2007). Whole Foods is already practicing these norms by providing training to its workforce. In addition to this aspect of resource planning as required by the Nadler -Tushman model (namely the Resources and the Organizational history), its goods also pass the filter to be applied for environmental factors, the external factors as stated by this theory. In being different, however, as Porter's Differentiation model suggests, there is always the looming threat of similar products that are copied from successful ones that cannot be ignored to contend with. The other important factor that needs attention is the shift in consumer tastes that should be noted and addressed at the earliest. These are the Environment factors stated in Nadler-Tushman theory. According to Gurau, Differentiation allows for the right compromise between pricing and quality of goods as a measure of meeting the challenges of changing scenario's in the marketplace that are bound to occur (2007). (Gurau, 2007)

Right from its inception, Whole Foods has fostered three main ingredients in its meeting of its goals, those of Environment (the external factors), Resources (skilled employees coupled with training and superior services) and Organizational history that it has innovated and offered to it prospective clients consistently. The Environment spurs the employees to perform better and outlive the competition in order to reach its goals and align with the strategies of the company. (Hawkins). The motto of the company ever since it came into being in terms of its goals, vision and work culture are the Organizational historical Traits that are followed with zeal and enthusiasm to meet the Strategic goals of the company in order to sustain the forces encountered in the industry of its choosing. In an organization, one of the most important traits is the quality of input that helps in reputation within the organization and fuels the growth machine (Hawkins). The proximity of the interaction process with the stakeholders of industry helps to further the cause of the internal beliefs within the company thereby creating a healthy atmosphere creating further avenues for adherence to avowed traditional values and commitments. Thus the self-belief that arises by way of interaction with external Environment helps strengthen Organizational input in a recursive manner and operational processes likewise (Hawkins).

The Alignment

In line with the Organizational traditions model of Nadler and Tushman, it is important that executives and managers realize the business in totality. That is specially so, as they are the ones who steer the company in difficult and challenging times, such as the ones that are being faced today owing to increasing competition in the industry, slowdown in economy and difficulty in acquiring newer properties, and plan corrective actions (Basu). It is evident from the working culture and growth trajectory of the Whole Foods that the theories of Congruence put forth by Nadler-Tushman of Columbia University are being followed by it. The confluence of factors of Environment, Resources and Traditions are helping each other in this company and are contributing towards sustainability and growth (Basu). The main view of the David Nadler and Michael Tushman theory is that of congruence- the congruence of one or more factors that aid each other seamlessly for achieving the strategies set forth for the target audience perceived by the company. These four input categories ( Environment, Resources, Organizational Traditions and beliefs and Strategies) comprise of four components, namely, individuals, work objectives, formal and informal processes (Basu). For the organization to function smoothly, all the four components have to be in synchronism and with due respect to each other (Basu). The emphasis of Congruence model is on the proper reflex and reaction between the input and output within an organization.

As has been observed in the case of Whole Foods, three (Environment, Resources and History) of the four factors are in congruence. It then follows to examine whether they align with the… [END OF PREVIEW]

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