Marketing Strategies: Borders, Crossfit Essay

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Porter's 5 Forces

One of the most volatile and unstable industries is that of the grocery industry. There are many substitute goods and the product is perishable. Rivalries are high because of the availability of substitute goods, the ease of transfer of consumption habits, challenges in the supply chain, and rival new entrants. Whole Foods is an excellent example of a company which has had to carefully hold onto its niche marketing strategy of offering organic and specialty goods, versus solely competing on price. The threat of new entrants is high given that customers can choose to purchase organic goods at Wal-Mart and Target, not just Whole Foods, as well as patronize their local farm stands. Substitute products are plentiful not just in the form of other grocery products but also in the form of buying prepared foods from healthier chains like Chipotle.

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Competitive rivalry is more intense than ever before "as grocers like Wal-Mart and Kroger ramp up organic offerings and specialty assortments" and as more non-food companies are entering the organic grocery market like Costco, whose membership has a great deal of overlap with Whole Foods' target upscale audience (Lutz 2014). The power of buyers is high in the market given that they can easily move their dollars from one grocery store to the next and now even suppliers of higher-end organics have more venues in which to showcase their goods. All of these are reasons why Whole Foods "shares have fallen 33% in the past year" despite efforts to promote the cheaper store organic brands and to offer amenities to consumers like Apple Pay (Lutz 2014).....

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