Whole Foods PESTEL Analysis

824 words (3 pages) PESTEL Analysis

23rd Oct 2020 PESTEL Analysis Reference this

Tags: PESTEL AnalysisPESTELFood and DrinkWhole Foods

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Political

The government plays a critical role in influencing business operations in the industry or market (Johnston, 2008). For example, the U.S. government is keen on setting regulations for the organic and GMO food products. In this regard, the retailer has the opportunity to make an improvement on its standards to ensure that proper labelling is done for all its organic and non-GMO products. Through this, it seeks to protect the rights of the consumers (Meyer, 2017). Political influence can give rise to free trade agreements, and this can be a benefit to the company, making it able to expand its business operations due to opportunities that come by free trade agreements. Additionally, the retailer can maximise on its Whole Trade Guarantee to strengthen its brand and lure more prospects (Johnston & Szabo, 2011). The company is able to address the issues raised by the government to ensure its market success.

Economic

Changes in the country's economy have a direct impact on Whole Foods Market. For example, other than the Great Economic Depression of 2008, economic stability has been enjoyed in the United States. A stable and expanding economy has enabled the company to employ more people, thus, reducing the level of unemployment in the country (Meyer, 2017). This notwithstanding, the rising cost of labour in developing nations is turning out to be an economic challenge to Whole Foods since the latter relies on the producers from those countries (Johnston & Szabo, 2011). The effect of this is that the cost of supplying products becomes higher, making the company consider developing proper economic strategies.

Socio-Cultural

The changing lifestyles of the consumers is a factor that Whole Foods Market must address adequately (Johnston & Szabo, 2011). For example, the consumers are now becoming sensitive to healthier and quality organic foods, and this is an opportunity for Whole Foods Market to satisfy the healthy lifestyle trend (Meyer, 2017). Secondly, due to the cultural diversity of the U.S, offering a diverse mix of food items is beneficial to the company. Thirdly, there is an increasing wealth gap, and this is likely to affect the middle-class consumers who are the primary target of Whole Foods Market.

Technological

Following the advancement of technology in the industry, there is a greater need for companies (Whole Foods Market included) to automate its business (Meyer, 2017). In so doing, the business efficiency increases. Similarly, the company can adopt simple technologies such as online services that allow customers to use mobile technology while placing offers (Johnston & Szabo, 2011). This would help in the company to be on par with e-commerce practices that companies are using to gain insights of the market.

Environmental

Meeting ecological requirements is a necessity for companies today. In the macro-environment that Whole Foods Market operates, global warming is posing a significant amount of threats since it interferes with the production side of the supply chain (Meyer, 2017). Besides, there is a major problem of waste disposal. Poor waste disposal increases environmental pollution, and therefore, the company must come up with complex but efficient waste disposal measures in preventing pollution to the environment by such waste (Johnston, 2008). Furthermore, it is critical that Whole Foods Market put emphasis on achieving business sustainability through environmental innovation to reduce ecological impacts.

Legal

The legal concerns influencing the organisational operations include environmental protection laws, inadequate employee laws in developing nations, and antitrust laws. Despite the fact that it has robust environmental policies, there is a need for the company to use this to its advantage to strengthen its brand image (Johnston, 2008). The company must maintain an assessment of its suppliers based on fair labour practices. Finally, antitrust laws limit the company's ability to maximise growth through mergers and acquisitions despite the fact that the Whole Foods Market has utilised acquisition as its key expansion strategy (Meyer, 2017).

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