Case Study: System Feedback Loops of Whole

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[. . .] The "Whole Foods" element of the company's emphasizes the learning nature of the enterprise. According to the internal analysis of the company, Whole Foods "search for the highest quality, least processed, most flavorful, and most natural foods available. They believe that food in its most natural state is the best tasting and most nutritious food" (p. 2). Therefore, the company's efforts in this area to date have contributed to the customer loyalty initiatives which are discussed further below.

Reinforcing Loop. To date, Whole Foods has been highly successful in reinforcing customer loyalty in a competitive environment. For instance, Anderson (2008) reports that, "Whole Foods Market sells organic foods and private labels and has been very profitable. The reinforcing loop is maintained through a variety of customer loyalty initiative. For example, in order to facilitate communication with its customers, Whole Foods stores provide so-called "take action" centers that allow customers to provide their feedback and comments (Whole Foods internal analysis). According to the internal analysis of the company, "Whole Foods wanted to turn highly satisfied customers into advocates for Whole Foods Markets. Customers could get personal attention in each store department and team members of Whole Foods were knowledgeable and enthusiastic with customers" (Internal analysis, p. 1).

Moreover, Berry (2007) also cites the company's ability to leverage its organizational learning in ways that contribute to customer loyalty. According to Berry, "To compete, smaller supermarket chains such as Whole Foods Market Inc. Of Austin have shifted gears. They are playing up differences to improve customer loyalty, particularly with those who shop often and generate the highest profits" (p. 4). Indeed, a visit to the local Whole Foods retail outlet can be a pleasurable experience compared to the nitty-gritty environments of larger retail grocers. In fact, Berry enthuses that, "When you go into a Whole Foods store, it's theater" (p. 4). This is marketing theater, though, with a pragmatic goal in mind. In this regard, Berry emphasizes that for Whole Foods, "The goal is to make each store a unique destination that spurs more frequent visits and keeps customers in stores longer, potentially raising sales" (p. 4).

Opportunities for Organizational Learning from the Balancing and Reinforcing Loops

Balancing Loop. Becoming a learning organization involves a thorough understanding of what factors comprise the strategic internal drivers that are required to build learning capabilities (Goh, 1999). Consequently the opportunity exists for the company to avoid the so-called "Icarus syndrome" wherein they continue to rely on their existing business model to the exclusion of other market segments (Nagl, 2011) as discussed further below.

Reinforcing Loop. Although the company devotes a relatively small amount of organizational resources to marketing, it has been judicious in what it does spend by targeting a specific market. There appears to be an opportunity to grow their market share, though, by expanding their marketing efforts outside this niche market. For instance, Anderson (2008) emphasizes that, "With the number of food and contamination scares in the news, we think the company stands to benefit from growing customer loyalty" (p. 37).


The research showed that all systems thinking models employ two basic feedback loops, Balancing and Reinforcing loops, to portray the relationships between the constituent elements. The research also showed that a Balancing Loop at Whole Foods is the focus on marketing only wholesome, organically grown products that are superior in nutritional content and a Reinforcing Loop is the manner in which the company engages in customer loyalty initiatives to educate its employees and customers concerning the superiority of its products to encourage their promotion of the company to their families, friends, co-workers and neighbors. As a learning organization, Whole Foods has consistently demonstrated the ability to translate what it has learned about the superior nutritional attributes of organic foods into a profitable enterprise in a competitive marketplace, but there are some potential opportunities available by expanding its marketing efforts beyond its current targeted market segment.


Anderson, J.A. (2008, March). Bright spots in a tough market. Black Enterprise, 38(8), 36-39.

Baker, J. (2006, Winter). Systems thinking and counterinsurgencies. Parameters, 36(4), 26-29.

Berry, K. (2007, March 30). Grocers excelling as relationship builders. American Banker, 15(3),


Giesecke, J. & McNeil, B. (2004, Summer). Transitioning to the learning organization. Library Trends, 53(1), 54-57.

Goh, S.C. (1998, Spring). Toward a learning organization: The strategic building blocks. SAM

Advanced Management Journal, 63(2), 15-17.


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APA Format

System Feedback Loops of Whole.  (2013, April 11).  Retrieved July 18, 2019, from

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"System Feedback Loops of Whole."  11 April 2013.  Web.  18 July 2019. <>.

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"System Feedback Loops of Whole."  April 11, 2013.  Accessed July 18, 2019.