Whole Foods

 

Commodity or ?

Whole Foods

Chris Gibbons wrote (from a Business Week story):

“The rule for winning in the niche quadrant (which they {Whole Foods} occupied for so long):  Innovate.  Continually open up the  gap between you and the competitors.  John Mackey is proposing a program called Total Health Immersion, a weekend getaway for  customers.  “Americans are sick of being  sick,” Mackey says.  “they don’t know what to do, and  there’s so much misinformation, which is why we started Whole Foods in the first place.”  Is that innovation enough?”

“So Whole Foods struggles with core strategy:  should we drive down prices to win in the commodity quadrant or should we innovate again to win in the niche quadrant?  They appear to be lost and moving in both  directions which would be a recipe for disaster.”

The fundamental issue is that if Whole Foods wants to be a premium brand it must act like it is a premium brand. If it wants to follow a commodity model than just about every food business will be a competitor.

In our business, we faced a similar situation with a low-price competitor less than a mile from us….at the low-end of the price range. We could not compete….we had better products….though not priced low enough. Of course the answer….don’t try to compete with a commodity business.

For us….the strategy was: be different and unique. Be the only one who had our line of products….excellent selling and….strong customer service. Those were are values that they didn’t have at the other place.

In my opinion….Whole Foods won’t win in the commodity quadrant.

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