Whole Foods has long been known as a “Wholesome Company.” As my peer Madison Shouldice stated in her blog entry, “Whole foods caring reputation…attracts consumers.” Their powerful brand suggests a healthy and morally sound company. However as a result of rising competition from other more cost-friendly companies, Whole Foods stock price dropped significantly in May, and has struggled to recover. Their competitors (Wal-Mart, Costco etc..) are staring to enter the niche market of healthy organic produce, that Whole Foods once dominated, and they’re doing it for less.

Walmart goes organic

Whole Foods is planning on initiating a rewards program to incentivize sales and to offer deals. However as Porter’s generic strategies states, when companies try to impose both a “Cost Leadership Strategy,” and “Differentiation Strategy,” as Whole Food’s is attempting to do in starting to offer rewards plans and deals, they risk loosing their competitive advantage and getting “stuck in the middle”. I believe they should focus on marketing the company’s values that allow them to differentiate themselves from competitors. Their customer service, community involvement, ethical operations, sustainable practices, and health priorities are what I believe they should be prioritizing. By trying to adopt a “Low Cost Strategy” they risk confusing the consumers, by blurring their company’s values and brand.

“Some Assembly Required” Business Model

SARB Model

Our generation is without a doubt, a digital era that moves at a revolutionary pace.

Digital age

The old economic system is outdated, and too inefficient to keep up with the demand for jobs in our society. This coupled with the rise in “cloud-based services” has given rise to the SARB model that is growing exponentially. I believe that this ability to launch entrepreneurial ventures at low cost, and often times low risk will encourage innovative individuals to pursue their ideas for new services, products and businesses.

Entrepreneurs

This new found freedom of pushing geographic limitations, eliminating lack of hard skills, and the accessibility of online (oftentimes free) resources encourages average individuals with an above average business idea to “give it a go.” Since their initial investment isn’t as substantial, their potential losses concurrently aren’t as substantial, so they’re less likely to dissuade possible entrepreneurs from pursuing their business ventures. I believe this rise in SARB models will lead to a decline in conventional businesses, and a jump in unique start-up businesses. Social media has played an immense role in the proliferation and ability for these businesses to thrive.

social media

This new tech-driven age is sure to produce many intriguing game-changing businesses, and I cant wait to witness what the future holds.

Lululemon has long been known as a trendy, high quality company with a strong brand and ethos. But after losing a third of its value this year in shares, it’s in need of a.business plan makeover. The problem with their products is that their high costs represent not only the high quality but also the reputable brand name, and in a time of rising competition from more economical competitors, Lululemon is suffering.

lululemon’s competitors

They’re tackling this issue by offering more fashionable products, and branching out from simply workout items.

lululemon getting stylish

Aswell as diversifying, they’re globalizing their presence to international markets. However, the cost of globalization combined with their competitors improvements may hinder Lululemon’s progress. Since Lululemon’s revamp, the number of shoppers have increased, I believe this shows a strong brand loyalty among Lululemon customers. Because Lululemon represents a culture and lifestyle, customers are more inclined to buy into the brand for life.

lululemon community

They should capitalize this and focus on product quality. If they’re going to continue to demand high prices, they should ensure their quality beats the rest of the competition. After learning from their product recall last year, if they can ensure quality, then I believe their loyal customers will be willing to continue buying their products over their competitors.

Today there is growing debate over the social responsibilities a business has to the world at large. The views expressed in this NY times article align with those from “The Social Responsibility of Business is to Increase Profits.” Both articles have a firm belief that in order for a company to maintain its ethical integrity, earning profit must be its sole motivation. As Milton Friedman argued: “For executives to devote resources to anything else would amount to doing charity with other peoples money.” This summarizes the ethos of both the articles in question.

Although, a recent return to social responsibility in businesses, as shown from the increase of companies signing the UN global standards on human rights, may be evidence that considering workers rights or sustainability might help the businesses in the long-term. This model has worked in the past as demonstrated by Henry Ford’s increase of wages in 1914. Ford’s increase of wages was still motivated by self-interest. He wanted to encourage productivity, eventually allow his workers to afford Model-T’s themselves, and decrease the dividend he would need to pay the Dodge brothers. This model of merging social responsibility with self-interest may be the answer to this contested topic.

http://www.nytimes.com/2014/07/16/business/the-do-good-corporation.html?module=Search&mabReward=relbias%3Ar%2C%7B%222%22%3A%22RI%3A14%22%7D&_r=1