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.
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.