PESTEL Analysis for Whole Food Market

PESTEL Analysis for Whole Food Market

PESTEL Analysis for Whole Food Market

This paper seeks to carry out a PESTEL analysis for Whole Food Markets in America to understand the macro environment it operates within which include political, economic, socio-cultural, technological, and legal as well as the environmental factors.

Political factors

Political forces imply the stability of the wider political environment and the position of political interest groups, movements or parties. A Healthier you government influence is one of the commonly known political forces that may influence the Whole Foods markets. Tax policies and other government regulations also serve as political forces. The political forces are normally interrelated with the legal factors for instance employment laws, foreign investment, mergers and acquisitions, and consumer protection among others (Thompson, 2015). However, the political and legal factors differ in that attitudes and reactions are political while legal forces are abiding in law and other regulations. The Whole Foods Market sell products that are mainly produced from other countries outside America and therefore tariffs are common among other international trade agreements. For instance, the Whole Food companies have had to contend with influences from large companies that seek to manipulate the standards by permitting synthetic substances during the preparation, packaging as well as processing stages of the whole foods.

Economic factors

The growth of Whole Food Markets is dependent on a country’s economic stability and the U.S steady rise in employment rate. Therefore, recession for instance affected Whole Food profits in the Year 2008.
Additionally, there is a rise in labor costs in the less developed nations creating a threat since America’s supply chain is primarily based on producers in the less developed nations. Economically, organic foods have been deemed expensive and strategies to reduce their costs has economic impacts. Consequently, the increasing labor costs contribute to high supply costs and a rise in selling prices at the Whole Market Stores in America. The economic factors are therefore a critical aspect in the PESTEL analysis of the Whole Foods Market in order to adequately create strategies to reduce such issues that can have negative impacts.

Socio-cultural factors

These are factors that represent the wider culture of a society within which an organization operates. They cover aspects such as the growth rate of a population, demographics, education level, wealth distribution, lifestyle, and social class among others. Such consumer influences have many impacts in the Whole Food Markets and may serve to present an opportunity or act as a threat. The increased awareness and emphasis on healthy lifestyle has created an opportunity for the Whole Food Market since more and more people are health conscious and prefer the whole or organic foods as opposed to the processed ones.

Technological factors

The world is rapidly changing and technology has been a key driver in these changes, Whole Food Markets have created websites for instance where consumers can conveniently purchase and check health information. New innovations and growth in technology have promoted information flow particularly the mobile technology and the use of internet (Thompson, 2015). The Whole Food Market has seen increased automation the use of mobile technology and the increased patenting of genetically modified foods presenting both an opportunity and a threat to the Whole Food Markets. Therefore, such business must look for a new approach to enhance their processes and reduce dependence on food that contains genetically modified foods.

Environmental factors

Whole Foods has always prioritized on environmental protection since its inception by ensuring there is minimal impact to the environment. Environmental factors are the conditions that characterize the natural environment which have also been referred as ecological forces. They include global warming which is a threat, complex business standards especially in the disposal of waste, and emphasis on the sustainability of business. For instance, The Whole Food Markets is dependent on farmers produce and thus their supply chain is greatly affected by global warming issue. The business must therefore ensure there is enough in its supply chain consistently (Oxford University Press, 2012).

Legal factors

The Whole Foods Market feels the effects of regulations and laws on business such laws on environmental protection, inappropriate labor laws that characterize developing nations and other legally abiding forces. Therefore, the Whole Foods Market has rational policies regarding the environment that enhance its brand image. Labor practices are also the bases for the evaluation of success in the Whole Food Markets. There are also antitrust laws that act as a threat to the business of organic foods since they hinder their growth potential through mergers and acquisitions with the American market (Free Management E-books, 2013). The six factors of PESTEL analysis in the Whole Foods Market in U.S are an important consideration in order to clearly identify threats and opportunities in their macro environment.

Bibliography

Free Management E-books., 2013. PESTEL Analysis Strategy Skills. Retrieved from http://www.free-management-ebooks.com/dldebk-pdf/fme-pestle-analysis.pdf

Oxford University Press, 2012. PESTEL analysis of the Macro-Environment. Retrieved from http://www.kantakji.com/media/1610/ty3.pdf

Thompson, A., 2015. Whole Foods Market External Factors & Consequences. Retrieved from http://panmore.com/whole-foods-market-external-factors-consequences.