Evalutation of Simulation

The intended goal of our company for the simulation was to make the most profitable returns. We wanted to have a high stock price and make the greatest revenue by selling at a price that was either close to the industry’s average or below average.
The main stakeholders for the company were the investors/shareholders of the company. It was also us, the “managers” of the company, making the decisions for the company. We had the responsibility to help them earn the most profits. This influenced our strategy formulation because we knew the strategy we decide to take will impact our performance and will therefore impact investor’s confidence in us.

Using Porter’s 5 forces, the industry seemed relatively unattractive.
The threat of entry by new competitors is medium. If a new competitor wants to enter, their firm must be able to have large economies of scale because production is very costly. They also need a lot of capital to buy the raw materials, machinery, pay for the salaries of their workers, and so forth. In terms of customers’ switching costs, they don’t incur any switching costs, which also mean they don’t necessarily need to be brand loyal.
The degree of rivalry among existing firms is high. We operated in a consolidated industry in which there were only 7 firms. Customers only had us and the importer to choose to purchase from. Thus, the competition among the 7 firms was high. It was also difficult for an existing firm to exit because firms invested capital on the machinery for producing these products. Also, firms had to make decisions whether or not to purchase raw materials, they also invested money in new expansion –all of which will not make it easy for a firm to exit quickly.
The bargaining power of suppliers is relatively high. They are able to charge higher prices for firms who need to purchase raw materials from them in that quarter (or a little lower if firms purchased futures for the raw materials). Firms must purchase the raw materials because it is necessary for the production of their product 1 and product 2, this makes the bargaining power of suppliers high.
The bargaining power of buyers is also high. There are firms in the industry offering product 1 and 2 at different prices. For the product 1 the “cheap” price was about $55 and the most expensive one was “ “. Buyers have different options of where they want to purchase their products 1 and 2. If they feel one product is too expensive, they can switch to a lower cost one. Or if they feel the cheaper products are inferior, they can buy the more expensive one. Thus, there really isn’t much loyalty from the customers.
There are alternatives to plates. There are disposable ones. The washing dish machine makes it easier for people to wash their dishes, which is also an alternative because instead of buying new plates, people can reuse the old ones. Customers can easily find alternatives products from this industry.

From Porter’s 5, we see that this industry is unattractive.

There were changes in the macro environment that had an impact on the industry. For instance, there were changes in the economic index. The economic index for the industry fluctuated; there were periods of decline which caused customers to purchase fewer products and periods in which the economic index increased, which indicated the customers would purchase more. The economic index also influenced the firm’s decision to purchase raw materials, how much the forecasted sales will be, and basically the forecast of sales. Also, the importer was another factor in the macro environment because they sold at lower prices compared to the rest of the industry, which posed as a competition to the industry as a whole.

Our firm had quite a few disadvantages in the industry. One of the disadvantages was that we did not invest in new capacity early enough. We were selling product 1 at a relatively low to moderate price and when we realized we needed to produce more products, we found that we went into overtime and subcontracting, which was very costly. Another disadvantage our firm had was that we did not invest in more sales representatives. We relied too heavily on the 5 representatives we had, until we started to train more trainees and increased the number of sales reps we had. Also another disadvantage our firm had was because we did not spend enough on advertisement. Advertisement is important because it communicates and exposes our customers to our products. When our firm realized this, our strategy was to spend more on advertising and increase our sales reps’ commission. We also changed our strategy to expand our capacity because we wanted to increase the number of sales reps and potentially lower our prices if we knew the cost of our goods sold wouldn’t be as high.

Strategic thinking helped us realize the problems our firm was facing and the new strategies we needed to take to make our team more efficient. By thinking strategically, we were able to reorganize our goals to try to develop distinctive competencies to gain a competitive advantage in the industry. When we realized that our revenues and stock price wasn’t too strong, we thought strategically how we would able to make our firm stronger; we attempted to build new competencies to help our firm gain a competitive advantage. For example, when we realized we had a lot of returns, we spent more money in engineering studies and R & D to try to make our products better. When we realized we spent a lot of money on cost of goods sold, we expanded our capacity to try to spend less on future quarters. The new strategy we took helped our firm gain more revenues as well as a higher stock price, although it didn’t put us on top of the industry.
I think some of the barriers to growing the distinctive competencies in the beginning of the simulation were because of our high cost of goods sold which limited our budget on other factors such as advertising, paying higher commissions, hiring more sales reps, spending more on R&D, engineering studies, etc. Our firm didn’t invest in new capacity until towards the middle of the simulation, which was a major barrier. This put us at a disadvantage towards the end of the simulation as well because our firm was put in the position to limit spending on other important factors while worrying that we would end up with a negative net income. This was evidence that our company found was really difficult to adapt to changing industry conditions because when the economic index was forecast to be lower, we had to price our goods lower in hopes of having more customers purchase our products but at the same time, we wouldn’t have been able to make enough profits to cover the costs of goods sold and come out with positive earnings; earnings that were good compared to other firms in the industry.
The corporate strategy we pursued was to keep our company profitable with a high stock price. We wanted our customers to return to us, that was why we wanted to spend more money to make sure our products were good quality. We wanted to make sure our sales reps were satisfied with their compensations. For example, when we realized we had some sales reps who quit, we decided to pay them a higher salary. When we realized our sales volume was low, we raised their commission. Our overall strategy was to adequately compensate our sales reps, keep our customers satisfied with the quality and price of our products and to try to keep our company profitable.

I don’t think our company was too successful in implementing our strategies. (“Successful” would be to ace the simulation). Our firm ended in a mediocre spot in the industry. There were times when it seemed our company was declining; however, we were able to gradually make our company better. It seemed difficult for our firm to come to decisions we all agreed. I felt that our strategy for the simulation wasn’t consistent. We knew what we wanted but we had different ideas as to how to achieve that goal; so when one strategy didn’t work for us, we switched to the second idea. By the time we realized we needed just one set strategy to follow, we were able to make some successes, but we didn’t have enough time to implement our new and focused strategy with success, as the simulation was already over.

If the simulation continued for additional periods, I would continue to expand our capacity, make more products and sell it at a relatively lower price compared to that of other firms in the industry. I would also spend more money on advertising, increase the number of sales reps, and raise their commission so they have more incentives to sell more. I would also continue to sell more of product 2. We would have the material and labor requirement to be able to sell product 1 and product 2, without worrying that product 2 would be too costly on our operations.
If there were any changes I would make for the future, I would make sure we will have enough labor needed to fulfill how much products we want to make without incurring too much cost. I will also spend more money on advertising for both products. I will also consider purchasing our company’s shares back when the time is right to increase the company’s stock price. Most of all, I would make sure our firm will have one strategy in which we will follow and an alternative strategy and how to transition from strategy 1 to strategy 2 in case strategy 1 is not meeting our goals.

Symptoms of a Firm's Strategic Problems

There are some symptoms that indicate a firm may have some strategic problems. I believe two symptoms that show a firm may have strategic problems are a deteriorating company/brand image and a firm’s product being viewed as relatively substandard. If a company’s product is viewed as being relatively substandard, wouldn’t a customer want to purchase a product that is standard or better? If a product is substandard, it means the product might not have the ability to meet the needs of customers and satisfy their desires. It could also potentially mean the current customers may not trust not only the product, but possibly other products/services the company has to offer. So, these customers may be deterred from purchasing from the company in the future. This is a sign that a firm may be exhibiting strategic problems because they know that their product(s) are being perceived as substandard and they aren’t doing anything to change or prevent this perception. Also, this perception may be caused by other factors indicating strategic problems such as not enough investment in R&D and quality control, outdated technologies, not hiring the right personnel to produce better products, etc. If management had a better strategic plan, they would work to prevent their products from being viewed as substandard because they know this could cause a deteriorating company/brand image, which is the second symptom of a firm having strategic problems.

A deteriorating brand/company image is a sign of strategic problems because that company had a good image, but because of their strategic problems, their image is poor. If the image is poor, this can lead to several possibilities, such as investors might not feel confident in investing in the company, or customers might not want to purchase from the company since there’s something negative associated with the company. For example, if Taco Bell frequently has news about people finding rodents in their foods or mice & rodents in their restaurants, this would obviously lead to a poor and deteriorating brand image. Customers would not want to purchase their food because of fear of uncleanness associated with Taco bell. This is a sign of a strategic problem the company is enduring because if the firm was well, they would take acts to prevent the company from having their image deteriorate. They would realize their problems earlier on and take preventive steps to make sure the image of the firm remains positive in customers, investors, and the public’s minds. An example of a company with deteriorating image is Sharper Image.

Sharper Image was once perceived as an innovative and elite company, offering customers differentiated products that they were either able to use or entertain themselves with in their everyday lives. However, because it seemed as though they didn’t position the company correctly, meaning they had a lot of diversification and they weren’t able to compete with the market. They had many different products sold to different consumers; it seemed as though there wasn’t really a particular aim for target customers. For example, they sold products like umbrellas, headphones, robotic toys, and massage chairs. Many different people could’ve had use for these products. Also, since they sold luxurious massage chairs at very high prices (perhaps several thousands of dollars), when the market for massage chairs became popular, it seemed like Sharper Image’s massage chairs didn’t compete well. A lot of Sharper Image’s products were adopted by other companies like Brookstone, who sold their products at more moderate prices. Thus, the firm’s image began to deteriorate. They were no longer the leading and well known company that offered innovative products which would suit luxurious living and they failed to compete effectively in the market. Their brand image began to deteriorate because consumers simply didn’t turn to them for their needs and eventually, this would lead to their bankruptcy.

How a firm can gain competitive advantage

For this assignment, we were to select 2 ways a firm can gain competitive advantage and discuss it.

I think product/service differentiation is important for a firm to secure competitive advantage, especially if a firm is in or entering a fairly dense industry. This is particularly important because in an industry that has been around for a while, any firm needs to find a unique point of differentiation, otherwise they would be doing the same as existing firms. Why would customers want to change to another firm then? Even if a firm isn’t entering a dense industry, that firm still needs to be unique to secure competitive advantage. A firm that is maturing in a dense industry can restructure themselves to be unique. This can be done by looking at what is currently being offered by rivalries, what/how customers feel about what is being offered and what else can be done to increase market share and thereby gain a competitive advantage. An example of a firm that gained competitive advantage by being unique, as compared to competitors in the market n a fairly dense industry is Apple.

I think Apple is a good example because they’ve been around for many years but was never as popular as it has been in recent years. I think their differentiating point is their changes in technology –being more innovative, such as creation of iPods, iPhone, better MAC computers, etc. All of these products and services they offer are all correlated with one another. I also think their campaign is very modern and appleaing to a vast majority of the public. They also offer customers many services associated with their products and also perhaps the first hands on experience customers can gain with all the products they offer before the customer decides to buy. Competitors in the industry haven’t really gained much of a competitive advantage in recent years because it seems as though they don’t really have a campaign which differentiates themselves from other brands. For instance, I think Apple’s colors are unique to their company. PCs are often dark, dull colors; as are other electronics. Rarely do they come in Apple’s signature white and multi colors. Also, what differentiates them from others is that all their products seem to correlate with one another –iPods are in the iPhone, you need a dock for the iPod, skins compliment the iPods, etc. It seems once a customer chooses to purchase any one of their products, they are most likely to purchase another because of the positive experience they’ve gained from using one of their products/services.
Another example is Toyota’s emphasis on safety and fuel efficiency. Although Toyota isn’t a pioneer in the automobile industry, they’ve managed to gain competitive advantage in this market by being a pioneer in a new idea for this market, thereby differentiating themselves from their competitors. With oil prices rising substantially, Toyota is one of the first companies to introduce fuel efficient cars. Although fuel efficient cars have not saturated the market, Toyota’s emphasis on safety and reliability gains also them a competitive advantage; they’ve gained a large market share, particularly in the United States in recent years, well over domestic automobile companies like Ford.
Another important way a firm can secure competitive advantage is being the first mover/first entrant into the market. This is important because if a firm is the first to enter the market, this will establish a reputation amongst other firms who may decide to enter the industry later on. By being the first entrant, this can also foster greater customer loyalty. Customers know that you are the first to create or break into the industry with your product/service; they will trust that by being able to enter the market first and being able to stay in the market for a period of time, you have something customers know and trust. Also, being “original” may allow customers to think of your company first when they want the particular service/product offered. Since you are the pioneer, customers can automatically think of you and thus, purchase from you.

An example of a firm who has secured competitive advantage by being the first mover/entrant into the market is Microsoft Corporation. Microsoft is the pioneer of user friendly software products for computers. They created the Microsoft Windows operating system for computers and the Microsoft Office software. Both have helped Microsoft gain a competitive advantage in the computer software market, because practically all PCs use Microsoft software. Even some Apple Macs which never used Microsoft software has adjusted to using it. It seems people are so used to using the Microsoft operating system and Office that it is difficult for people to adapt to another program/software. Almost every PC one buys has Microsoft programs in it and even if it doesn’t (like the Apple MAC), it can be purchased should a customer feel they want Microsoft instead. It’s almost standard that to purchase a PC is to expect Microsoft software installed in it. That is why being a pioneer like Microsoft is has gained them a competitive advantage.

Another example would be eBay. eBay is the pioneer of online auctioning between two parties. They were the first to enter the market with the concept of two parties selling products/service to one another through online auctioning and to this day, they are still the leader in which many people from around the world do online auctioning through. I know whenever I think of auctioning something, trying to find something really rare or even slightly cheaper, eBay comes to mind. I think eBay has a high competitive advantage because they were the first to enter the market with this concept and they’ve been around for a while, thus they’ve established a reputation for online buying/selling at auctioned prices. Other sites such as Craig’s list have obtained a portion of eBay’s market share, but eBay still has the advantage since they were the first to enter the market. Buyers/sellers are used to their technique for trading and have created a selling record tract on eBay’s site, which would bring them back to the site.

Spa/Beauty and wellness industry analysis using Porter's 5 forces model

For this assignment, I decided to do a competitive analysis on the spa/beauty and wellness industry. The spa/ beauty and wellness industry comprises of face and body treatments to maintain, improve and enhance the skin. It also promotes overall relaxation and wellbeing through the services provided by the particular spa. A spa may also sell products to its clientele. By applying Porter’s five forces model, I will analyze substitutes in other industries, buyers, potential new entrants, suppliers and rivalry among current competitors to see how attractive this industry is.

First, to what extent are there substitutes in the spa/beauty and wellness industry? I would say the potential for substitutes is low. The spa/ beauty and wellness industry comprises of facial and body treatments. The potential for substitute for facial treatments is mediocre because customers can purchase alternative facial products such as creams, masks, etc. Even miniature machineries used for a facial treatment can be purchased for at home use. Customers can easily perform facial treatments on themselves at home with such substitutes. However, in products purchased by customers often come from the spa/beauty and wellness industry, so even if this industry loses customers for treatment, they can still obtain customers through sales of products. The substitute for body treatments such as massages and wraps is low. Despite the innovative technologies making massage machines, it is difficult for customers to perform such treatments on themselves. It is often more relaxing and convenient for a professional to perform body treatments on a customer –the results are also more effective. Thus, the threat of substitution in this industry is relatively low, particularly because many people have stress from their daily lives and enjoys being pampered by services from this industry.

Next, I will look at the bargaining power of buyers. I would say the bargaining power of buyers is high in this industry because there are so many selections of spas customers can choose from. For example, in the Chinatown area of New York City alone, there is at least a spa/facial center on every block. Thus, customers have a substantial influence and power over the firms in this industry. Prices must be kept at a competitive level because if spas offered similar services and some were priced lower, customers would much rather join the cheaper spa. The services provided must be of utmost quality because many spas offer similar services at similar prices, so one distinguishing feature is the quality of services provided. Because this is primarily a service oriented industry, customers have a high degree of power in terms of brand loyalty; brand loyalty builds on your ability to communicate and foster a relationship of trust between you and your customer. Clients can switch over to another spa easily with little or no cost. Thus, because there are so many selections of similar products/services at similar price levels, brand loyalty is difficult to maintain.

The bargaining power of suppliers. I think the bargaining power of suppliers in this industry is low. Suppliers in this industry provide products for facial and body treatments. This may include bed sheets, salon-sized washes, creams, masks, facial products, machines, etc. However, because of the fact there are so many suppliers offering similar products at prices which are relatively the same in the United States, the bargaining power of suppliers is rather low. Their power is further reduced by the fact that the cost of the exact same products is substantially cheaper if imported from another country like China. Suppliers of facial product might have a slightly higher bargaining power, since customers develop brand loyalty towards a product they’ve been using. Even so, because there are so many selection of other facial products in the market, suppliers might not have a high bargaining power neither. Also, often times, it is up to the esthetician to recommend or persuade customers to buy a particular product. Prices for facial products are often set at a wholesale price; however prices for all other products are often negotiable. Thus, the bargaining power of suppliers is low.

Rivalry among current competitors. The rivalry among current competitors is high. The spa/beauty and wellness industry is a fragmented one in which there are many small to medium firms. These firms have low to medium market share. Many of these firms are individual firms and some are chains. This means customers have a wide variety of options because they can easily change amongst competitors. This leads to an opportunity for price wars because customers have more power and the fragmented firms need to give customers an incentive to consume from that firm. Also, the demand for services and products in this industry is medium. Services and products are not absolutely necessary, they are things that people enjoy and become necessary when they hope to achieve a desired result and find that product/service effective. Thus, I would conclude that the growth in demand isn’t too high, that’s why there is more competition.

Finally, in looking at exit barriers, if a firm wanted to exit the industry, it is quite easy. They can close down or another firm can buy them out. Although this typically means less competition, the fact that there’s easy entry into this industry balances the easy exit barriers. Also, a startup firm typically stays in the industry for a minimum of one year and during that period, new firms are opening. Service providers have gained enough experience to start up a firm on the own. So, despite the easy exit barriers, the fact that the rate of new firms entering the industry is greater than exiting firms makes the rivalry among current competition high.

Potential New Entrants. What is the potential for new entrants in this industry? It is high. When assessing what the potential for new entrants is, we should look at the capital requirement to start the business and how accessible the capital is. Brand loyalty to current firms, government regulations, switching costs, experiences, and access to key suppliers are factors that should also be taken into account when evaluating the potential for new entrants. If consumers have developed brand loyalty, it would be a barrier for potential new entrants to break into the industry and compete for current customers. Government regulations affect entry into the industry. Laws require industry personnel to be licensed for practice. Also, different insurance regulations affect the industry, which varies on the procedures done. Government regulations don’t pose as a large barrier to entry because a firm needs to comply with licensure requirements to operate, which isn’t too complicated.

Typically, switching costs for buyers are minimal because they don’t have many obligations. They can purchase a package or membership at a discounted price, which would obligate them to use the services or they could do single treatments at prices higher than the package rate, which would be no obligations at all. Similarly, for products, consumers can choose to buy a product with no obligation. They will continue to use the product or services if they feel it’s beneficial to them, which is partially developing brand loyalty. Thus, because switching costs are minimal, the potential for new entrants is high, therefore, the competition is also high. Access to key suppliers is another fact to look at. The more difficult access to key suppliers is, the bigger the barrier to entry. In this industry, the access key suppliers is high because there are many suppliers selling similar products, all competing to sell spas the products.

So in conclusion, by applying Porter’s five forces model, I would say the industry is a competitive one. Substitutes are high, buyer’s power is high, potential new entrants is high, power of suppliers is low, and rivalry among existing firms is high. So overall, this is a competitive industry that might not be too attractive to enter. Since this industry is primarily service oriented, it takes a lot of time for firms in the industry to develop relationships with customers, and patience is something much needed to survive in this industry.

A firm's mission statement

What is a mission statement and why is it important to a firm’s success? Whether a firm is large, comprising of thousands of people, or small, comprising of only one person, a mission statement is the driving force. It is persistently guiding the company to meet its goals. It is like “inner voice” steering the company in the right direction, so without it, it would be difficult to meet the firm’s purpose.

Every company is established to do something, whether it is to provide a product or service in a particular industry. The mission statement is like the backbone of a firm, laying the foundation for what the firm hopes to accomplish in their industry. So a mission statement must be precise in detailing what they do, hope to do and become in the future and what they are committed to doing in the long run. It cannot be too vague, like “we hope to be the best in what we do” because what is the “best”? There must be broad standards, which is what the mission statement should entail. However, the statement should not define every standard for performance because the statement is not a code of conduct to the employees. Parthasarthy and Booke’s Strategic Management textbook has four parts necessary to a mission statement.

The four components of a mission statement they mention are: task (what the firm does), vision (what the firm wants to become in the future), values/beliefs (the ideals the firm is committed to) and goals/objectives (the end results the firm seeks). In evaluating a mission statement, we should look at whether the firm has these four components and if it does, whether they are consistent with what the firm does, in the industry they are in. It is also important to see whether important stakeholders are being considered in the statement since stakeholders influence a firm’s success at every level.

The firm’s task must define what exactly it is they do. A firm may be providing products or services or both, but they need to be clear in what they do. What they do may determine prospective customers they would want to attract, so they can cater their products/services to that clientele.

The firm’s vision must detail what it wants to accomplish in the future. The vision should define and establish goals that the firm would set out to meet in the long run. This provides the firm with direction so it would know what it needs to do to meet its vision. An example would be “to become a leading spa service provider in New York City”.

The firm’s goals/objectives are similar to its vision. The company’s objectives are the specifics detailing how the company will eventually accomplish its vision. Thus, the goals/objectives, whether financial or strategic, should be quantifiable with a precise period in which the goals should be met so it can become a standard to determine whether the company is doing what it should to meet its vision.

The firm’s values should define the culture of the firm. It should detail what the firm believes in. This is important because it fosters a particular type of culture within the company, depending on what kind of values are set.

I have chosen to evaluate Whole Foods Markets’ mission statement.

Declaration of Interdependence

Whole Foods Market is a dynamic leader in the quality food business. We are a mission-driven company that aims to set the standards of excellence for food retailers. We are building a business in which high standards permeate all aspects of our company. Quality is a state of mind at Whole Foods Market.

Our motto — Whole Foods, Whole People, Whole Planet — emphasizes that our vision reaches far beyond just being a food retailer. Our success in fulfilling our vision is measured by customer satisfaction, Team Member excellence and happiness, return on capital investment, improvement in the state of the environment, and local and larger community support.

Our ability to instill a clear sense of interdependence among our various stakeholders (the people who are interested and benefit from the success of our company) is contingent upon our efforts to communicate more often, more openly, and more compassionately. Better communication equals better understanding and more trust.

We Sell the Highest Quality Natural and Organic Products Available

We appreciate and celebrate that great food and cooking improves the lives of all of our stakeholders. Breaking bread with others, eating healthfully and eating well — these are some of the great joys of our lives.

Our goal is to sell the highest quality products that also offer high value for our customers. High value is a product of high quality at a competitive price. Our product quality standards focus on ingredients, freshness, taste, nutritive value, safety and/or appearance. While we have very high standards for product quality, we believe that it is important to be inclusive and open minded, and not overly restrictive or dogmatic.

We Satisfy and Delight Our Customers

Our customers are the most important stakeholder in our business. Therefore, we go to extraordinary lengths to satisfy and delight our customers. We want to meet or exceed their expectations on every shopping trip. We know that by doing so we turn customers into advocates for whole foods. We guarantee our customers 100% product satisfaction or their money will be refunded.

Outstanding customer service is a result of both our Team Members skill and enthusiasm in serving our customers and their in-depth knowledge and excitement about the products we sell. We nurture a quality business relationship with our customers by daily demonstrating our customer service beliefs:

• Customers are the lifeblood of our business and we are interdependent on each other.
• Customers are the primary motivation for our work — they are not an interruption of our work.
• Customers are people who bring us their wants and desires and our primary objective is to satisfy them as best we can — they are not people to argue or match wits with.
• Customers are fellow human beings with feelings and emotions like our own; they are equals to be treated with courtesy and respect at all times.

We continually experiment and innovate in order to raise our retail standards. We create store environments that are inviting, fun, unique, informal, comfortable, attractive, nurturing and educational. We want our stores to become community meeting places where our customers come to join their friends and to make new ones. Our stores are "inclusive." Everyone is welcome, regardless of race, gender, sexual orientation, age, beliefs, or personal appearance. We value diversity — whole foods are for everyone.

We Support Team Member Excellence and Happiness

Our success is also dependent upon the collective energy and intelligence of all our Team Members. In addition to receiving fair wages and benefits, belief in the value of our work and finding fulfillment from our jobs is a key reason we are part of Whole Foods Market. Therefore, we design and promote safe work environments where motivated Team Members can flourish and reach their highest potential. And no matter how long a person has worked or plans to work with us, each and every Team Member is a valued contributor.

There are many Team Members in our company who "work behind the scenes" to produce product, distribute product and generally support our retail Team Members and customers. Although they are not as visible as our retail Team Members, they are integral to the success of our business.

Achieving unity of vision about the future of our company, and building trust between Team Members is a goal of Whole Foods Market. At the same time diversity and individual differences are recognized and honored. We aim to cultivate a strong sense of community and dedication to the company. We also realize how important leisure time, family, and community involvement outside of work is for a rich, meaningful and balanced life. We must remember that we are not "Whole Life Market."

We strive to build positive and healthy relationships among Team Members. "Us versus them" thinking has no place in our company. We believe that the best way to do this is to encourage participation and involvement at all levels of our business. Some of the ways we do this are:

• Self directed Teams that meet regularly to discuss issues, solve problems and appreciate each other's contributions.
• Increased communication through Team Member Forums and Advisory Groups, and open book, open door, and open people practices.
• Labor gainsharing and other Team Member incentive programs.
• Team Member Stock Options and Stock Purchase Plan.
• Commitment to make our jobs more fun by combining work and play and through friendly competition to improve our stores.
• Continuous learning opportunities about company values, food, nutrition and job skills.
• Equal opportunity for employment, with promotion mostly from within the company.

We Create Wealth Through Profits and Growth

We earn profits every day through voluntary exchange with our customers. We know that profits are essential to create capital for growth, job security and overall financial success. Profits are the "savings" every business needs in order to change and evolve to meet the future. They are the "seed corn" for next year's crop. We are the stewards of our shareholder's investments and we are committed to increasing long term shareholder value.

As a publicly traded company, Whole Foods Market intends to grow. We will grow at such a pace that our quality of work environment, Team Member productivity and excellence, customer satisfaction, and financial health continue to prosper.

There is a community of self interest among all of our stakeholders. We share together in our collective vision for the company. To that end we have a salary cap that limits the maximum cash compensation (wages plus profit incentive bonuses) paid to any Team Member in the calendar year to 19 times the company-wide annual average salary of all full-time Team Members.

We Support Our Communities and Encourage Local Involvement

Our business is intimately tied to the neighborhood and larger community that we serve and in which we live. The unique character of our stores is a direct reflection of the customers who shop with us. Without their support, both financial and philosophical, Whole Foods Market would not be in business. Our interdependence at times goes beyond our mutual interest in quality food and, where appropriate, we will respond. We donate 5% of our after-tax profits to not-for-profit organizations.

We Promote Environmental Stewardship

We see the necessity of active environmental stewardship so that the earth continues to flourish for generations to come. We seek to balance our needs with the needs of the rest of the planet through the following actions:

• Supporting sustainable agriculture. We are committed to greater production of organically and biodynamically grown foods in order to reduce pesticide use and promote soil conservation.
• Reducing waste and consumption of non-renewable resources. We promote and participate in recycling programs in our communities. We are committed to re-usable packaging, reduced packaging, and water and energy conservation.
• Encouraging environmentally sound cleaning and store maintenance programs.

Our Business Associates

We are not a fully self-sustaining ecosystem. There are hundreds of other businesses that we depend on to assist us in creating an outstanding retail shopping experience for our customers. We view our trade partners as allies in serving our stakeholders. We treat them with respect, fairness and integrity, and expect the same in return.

Balance and Integration

Satisfying all of our stakeholders and achieving our standards is our goal. One of the most important responsibilities of Whole Foods Market's leadership is to make sure the interests, desires and needs of our various stakeholders are kept in balance. We recognize that this is a dynamic process. It requires participation and communication by all of our stakeholders. It requires listening compassionately, thinking carefully and acting with integrity. Any conflicts must be mediated and win-win solutions found. Creating and nurturing this community of stakeholders is critical to the long-term success of our company.

Final Thoughts

Our Vision Statement reflects the hopes and intentions of many people. We do not believe it always accurately portrays the way things currently are at Whole Foods Market so much as the way we would like things to be. It is our dissatisfaction with the current reality, when compared with what is possible, that spurs us toward excellence and toward creating a better person, company, and world. When Whole Foods Market fails to measure up to its stated Vision, as it inevitably will at times, we should not despair. Rather let us take up the challenge together to bring our reality closer to our vision. The future we will experience tomorrow is created one step at a time today.

The Declaration of Interdependence was created originally in 1985 by 60 Team Members who volunteered their time. It has been updated in 1988, 1992 and 1997.

I think this is an example of a sound mission statement because it involves so many stakeholders who interdependently provide Whole Foods with a clear mission. First, it clearly defines Whole Foods task –which is to provide the highest quality food. In describing its task, Whole Foods mentions why stakeholders’ would want to receive such high quality food. This clearly indicates what the company does and who their customers are. Also, they specifically say what their visions are for the company and for various stakeholders’ and employees. It says they want to sell high quality foods at competitive prices and expect to do so by fostering an interdependent environment with employees, customers, suppliers, etc. One of their visions is to ensure customer satisfaction and to do so, they even specify what and how they want their customers to be satisfied. It also specifies what and how they want to foster an environment that supports team members’ happiness and excellence. All this ultimately leads to their goal of creating wealth, profit and growth. To be able to create wealth, Whole Foods recognizes in their statement that it is crucial to foster good relations in this interdependent web, and that is why they detailed out what is expected of them at each end of this web. The fact that this mission statement is so precise gives the company a very clear focus on what it needs to do and how they should go about doing it.

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Hi everyone, welcome to my blog. I'm a student studying real estate finance and investments. I'm also a full time cosmotologist at a spa. I hope anyone reading my blog will enjoy, don't find it too boring!