Case Study Description of Whole Foods Market and Wild Oats Merger
Whole Foods and Wild Oats were both natural- and organic-food stores that competed for similar customers on values such as high-quality and healthy products, excellent customer service, knowledge of products, and an enjoyable shopping experience. In February 2007, Whole Foods announced that it would purchase a smaller, yet formidable competitor, Wild Oats. There was tremendous geographic complementarity involved: The merger would give Whole Foods the largest footprint within the natural- and organic-grocery industry in North America.
Authors :: L.J. Bourgeois, Chris Aprill, Daniel Payne, Kristin Strauss
Swot Analysis of "Whole Foods Market and Wild Oats Merger" written by L.J. Bourgeois, Chris Aprill, Daniel Payne, Kristin Strauss includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Oats Wild facing as an external strategic factors. Some of the topics covered in Whole Foods Market and Wild Oats Merger case study are - Strategic Management Strategies, Mergers & acquisitions and Organizational Development.
Some of the macro environment factors that can be used to understand the Whole Foods Market and Wild Oats Merger casestudy better are - – supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, technology disruption, increasing commodity prices,
central banks are concerned over increasing inflation, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Whole Foods Market and Wild Oats Merger
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Whole Foods Market and Wild Oats Merger case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Oats Wild, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Oats Wild operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Whole Foods Market and Wild Oats Merger can be done for the following purposes –
1. Strategic planning using facts provided in Whole Foods Market and Wild Oats Merger case study
2. Improving business portfolio management of Oats Wild
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Oats Wild
Strengths Whole Foods Market and Wild Oats Merger | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Oats Wild in Whole Foods Market and Wild Oats Merger Harvard Business Review case study are -
High brand equity
– Oats Wild has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Oats Wild to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Oats Wild has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Whole Foods Market and Wild Oats Merger - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Oats Wild in the sector have low bargaining power. Whole Foods Market and Wild Oats Merger has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Oats Wild to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Oats Wild is one of the leading recruiters in the industry. Managers in the Whole Foods Market and Wild Oats Merger are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Oats Wild has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Whole Foods Market and Wild Oats Merger HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Oats Wild digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Oats Wild has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Successful track record of launching new products
– Oats Wild has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Oats Wild has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Strong track record of project management
– Oats Wild is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Oats Wild in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Oats Wild is present in almost all the verticals within the industry. This has provided firm in Whole Foods Market and Wild Oats Merger case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to lead change in Organizational Development field
– Oats Wild is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Oats Wild in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Oats Wild has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Whole Foods Market and Wild Oats Merger Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses Whole Foods Market and Wild Oats Merger | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Whole Foods Market and Wild Oats Merger are -
Aligning sales with marketing
– It come across in the case study Whole Foods Market and Wild Oats Merger that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Whole Foods Market and Wild Oats Merger can leverage the sales team experience to cultivate customer relationships as Oats Wild is planning to shift buying processes online.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Oats Wild supply chain. Even after few cautionary changes mentioned in the HBR case study - Whole Foods Market and Wild Oats Merger, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Oats Wild vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Oats Wild has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Whole Foods Market and Wild Oats Merger, in the dynamic environment Oats Wild has struggled to respond to the nimble upstart competition. Oats Wild has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Whole Foods Market and Wild Oats Merger, it seems that the employees of Oats Wild don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Whole Foods Market and Wild Oats Merger HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Oats Wild has relatively successful track record of launching new products.
Need for greater diversity
– Oats Wild has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Capital Spending Reduction
– Even during the low interest decade, Oats Wild has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Products dominated business model
– Even though Oats Wild has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Whole Foods Market and Wild Oats Merger should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, L.J. Bourgeois, Chris Aprill, Daniel Payne, Kristin Strauss suggests that, Oats Wild is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Whole Foods Market and Wild Oats Merger, is just above the industry average. Oats Wild needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities Whole Foods Market and Wild Oats Merger | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Whole Foods Market and Wild Oats Merger are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Oats Wild can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Oats Wild in the consumer business. Now Oats Wild can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Oats Wild can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Oats Wild to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Oats Wild to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Oats Wild has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Manufacturing automation
– Oats Wild can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Oats Wild can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Oats Wild can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Learning at scale
– Online learning technologies has now opened space for Oats Wild to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Oats Wild in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Oats Wild to increase its market reach. Oats Wild will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Oats Wild can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Whole Foods Market and Wild Oats Merger, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Oats Wild can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Oats Wild is facing challenges because of the dominance of functional experts in the organization. Whole Foods Market and Wild Oats Merger case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Whole Foods Market and Wild Oats Merger External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Whole Foods Market and Wild Oats Merger are -
Shortening product life cycle
– it is one of the major threat that Oats Wild is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Oats Wild has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Oats Wild needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Stagnating economy with rate increase
– Oats Wild can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Oats Wild business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Oats Wild with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Oats Wild can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Whole Foods Market and Wild Oats Merger, Oats Wild may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Increasing wage structure of Oats Wild
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Oats Wild.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Oats Wild.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Oats Wild in the Organizational Development sector and impact the bottomline of the organization.
Regulatory challenges
– Oats Wild needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Oats Wild can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Whole Foods Market and Wild Oats Merger .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Oats Wild needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Whole Foods Market and Wild Oats Merger Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Whole Foods Market and Wild Oats Merger needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Whole Foods Market and Wild Oats Merger is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Whole Foods Market and Wild Oats Merger is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Whole Foods Market and Wild Oats Merger is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Oats Wild needs to make to build a sustainable competitive advantage.