4. Whole foods: An Organic History
The early age:
1978- twenty-five year old dropout John Mackey and twenty-one year
old Rene Lawson Hardy, opened the small natural foods store.
1980- John and Rene partnered with Craig Weller and Mark Skiles to
merge SaferWay with their Clarksville Natural Grocery.
Expansion:
1984- Whole Foods Market began its expansion.
1989- We expanded to the West Coast.
1990-1999- acquiring other natural foods chains throughout the 90's.
1998- Development of "virtual" store began.
2000- Additional acquisitions.
2001- Whole Foods moved into Manhattan.
2002- Saw an expansion into Canada
2003-2004- Whole Foods Market entered the United Kingdom.
2007- Merger with Whole Foods Market
(Whole foods Market,2007)
6. Whole Foods Core Values
Promoting the health of
our stakeholders
through healthy eating
education
Selling the highest quality
natural and organic
products available
Satisfying and delighting
our customers
Supporting team member
happiness and excellenceCreating wealth through
profits & growth
Caring about our
communities & our
environment
Creating ongoing win-win
partnerships with our
suppliers
7. Definition of sustainability
Sustainable Development
Meeting the needs of the present generation without compromising the
ability of future generations to meet their own needs.
(Brundtland Commission, 1987)
The Brundtland Report recommends that the international community
should meet to discuss the growing environmental issues, and to examine
how best to reduce the effects of human activity on the environment for
future generations that is in line with their newly developed concept of
sustainable development.
(The Brundtland Report, 1987)
8. Triple Bottom Line
Financial performance: improve profits and share dividends to
shareholders.
Social performance : the responsibility of other social stakeholders.
Environmental performance: the measure of environmental
protection.
(Merriman and Sen, 2012)
(Elkington, 1998)
9. The Importance of Embedded
Sustainability
Embedded Sustainability is the incorporation of environmental,
health, and social value into the core business with no trade-off in
price or quality.
(Laszlo and Zhexembayeva, 2011)
Resourced Base Perspective
Environmental Perspective
10. Bolt-on sustainability Embedded sustainability
Goal Pursue shareholder value Pursue sustainable value
Scope Add symbolic wins at the
margins
Transform core business
activities
Customer Offer “green” and “socially
responsible” products at
premium prices or with
diminished quality
Offer “smarter” solutions with
no trade-off in quality and no
social or green premium
Value
capture
Focus on risk mitigation
and improved efficiencies
Reach across all seven levels
of sustainable value creation
Value
chain
Manage company’s own
activities
Manage across the product
or service life cycle value
chain
Bolt-on vs Embedded Sustainability
(Laszlo and Zhexembayeva, 2011)
11. Bolt-on sustainability Embedded sustainability
Relationships Leverage transactional
relationship. Stakeholders such
as customers, employees, and
suppliers are resources to be
managed and sources of
input
Build transformative
relationships. Co-develop
solutions with all key
stakeholders including NGOs
and regulators to build system-
level change
Competitor Operate only in win-lose mode
in which any gain is
competitor’s loss
Add cooperation with
competitors as potential
sources of gain
Organization Create a “scapegoat”
department of sustainability
Make sustainability everyone’s
job
Competenci
es
Focus on data analysis,
planning, and project
management skills
Add new competencies in
design, inquiry, appreciation,
and wholeness
Visibility Make green and social
responsibility highly visible and
try to manage the resulting
scepticism and confusion
Make sustainability
performance largely invisible
but capable of aligning and
motivating everyone
(Laszlo and Zhexembayeva, 2011)
12. Creating Sustainable Value
6 Business Context
5 Brand
4 Market
3 Product
2 Process
1 Risk
7RadicalInnovation
Cost
Laszlo (2003; 2011)
13. 1 + 7 Value Creation
Value Destruction
o Short term view
o Profit trade-offs
o Did Wholefoods consider this?
Risk mitigation
o “Fail to prepare, Prepare to fail”
o Sourcing
o Embedded ethics
o Collaborations
Efficiency
o Environmental efficiency
o Sustainable Sourcing
o The Upper Room and Streetlytes
14. 1 + 7 Value Creation
Product differentiation
o Organic
o Health
o Lifestyle
New Markets
o Conscious consumer market (Scotland)
o Higher disposable income
o Allegro Coffee
Protecting and enhancing the Brand
o Risk mitigation
o Good practices = good reputation
15. 1 + 7 Value Creation
Raising industry standards
o Food labelling
o British and Scottish produce
o Ethics and sustainability
Radical Innovation
o Supply Chain innovation
o Renewable energy
o Lifestyle
16. Harts (2005) Natural-Resource-Based
View
A theory of competitive advantage based upon the firm's relationship to
the natural environment.
Firms resources operationalized via 3 interconnected strategic
capabilities:
1. pollution prevention
2. product stewardship
3. sustainable development
Driven by the challenge of irreversible global environmental damage
17. Harts (2005) Natural-Resource-Based
View
Believes both the firms internal capabilities and environmental factors
are important in gaining competitive advantage. View derived from
Andrews (1971) Chandler (1962) Hofer & Schendel (1978) Penrose (1959).
Believes a firm should be concerned with its future position. Taking from
Hamel and Prahalad (1994) idea of "competing for the future".
Valuable and costly to copy resources of a firm are key to maintaining
competitive advantage. The capabilities creating the advantage
should be supported by resources that are not easily duplicated by
competitors (Rumelt, 1984)
18. Challenges of the Natural Environment
Climate Change
U.S. Historical Climatology Network (USHCN) (2010)
20. Challenges of the Natural Environment
Growth in Population
United Nations (2011) World Economic and Social Survey 2011
21. Challenges of the Natural Environment
Growth in Energy Consumption
United Nations (2011) World Economic and Social Survey
22. Whole Food's Competencies
Strategic
capability
Core Competencies Competitive advantage
Pollution
prevention
Encourages store to Purchase from local
suppliers
Code of Conduct
Ethical image
Product
stewardship
Stakeholder integration by Whole Foods
Offering enjoyable grocery shopping
experience
Highly selective in products they sell: Natural
and Certified Organic
Perishable foods 67% of sales
Sells Private Label organic food as lack of
organic brands
Quality and Service
Appeals to above average
income earner
Sustainable
development
Organizational set-up: locating where the
demand is
Team-based environments- independent
decisions
Acquisition as a means of expansion
Shared vision
In the 100 best Corporate
Citizens
Reputation as No.1 natural food
chain
27. Do Whole Foods Markets embed
sustainability?
Core Principles
Sustainable Aims
Stakeholder Orientation
Conscious Environmental
Awareness & Effort
“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.” (Whole Foods Market, 2012)
Balancing Triple
Bottom Line
28. Organic
Happy Famers
Biologically Viable
Health & Safety
Zero Pesticides
372 Miles Travelled
Non-Organic
Mistreated Farmers
Wasted Land
Poor Health & Safety
68 Pesticides
Flush and Wax
11,552 Miles Travelled
29. Andrews, K. 1971. The concept of strategy. Homewood, IL: Irwin.
Brundtland Commission (1987), Our Common Future , United Nations World Commission on Environment and
Development. Oxford: Oxford University Press.
The Brundtland Report, 1987. Report of the world commission on environment and development: Our common
future.[Online] available at: http://www.undocuments. net/wced-ocf.htm (accessed: 1st March, 2015).
Chandler, A. 1962. Strategy and structure. Cambridge, MA: MIT Press.
Conscious Capitalism. (2015). An Introduction to Conscious Capitalism. [Online] Available:
http://www.consciouscapitalism.org/node/3998. [Accessed: 9th Feb 2015]
Elkington, J. (1998). Enter the Triple Bottom Line. [Online] Available:
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2015]
Hofer, C., & Schendel, D. 1978. Strategy formulation: Analytical concepts. St. Paul, MN: West.
Hubbard, D.W. (2010). How to measure anything: finding the value of intangibles in business. New York City: John
Wiley & Sons.
Laszlo, C, Zhexembayeva, N. (2011) Embedded Sustainability: The Next Big Competitive Advantage. Sheffield:
Greenleaf Publishing. P121
Levy, D. L. (1997). ‘Environmental management as political sustainability’, Organization & Environment, 10 (2), pp.126-
147.
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30. References
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National Pesticide Information Centre (2015). http://npic.orst.edu/
Penrose, E. 1959. The theory of the growth of the firm. New York: Wiley.
Hamel. G.. & Prahalad. C. K. 1991. Corporate imagination and expeditionary marketing.
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February 2015
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