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Case - The Battle for the Organic Food Market

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Q1. Explain at least 4 major environmental variables which have affected the organic food market.

Answer - Most of the companies are affected by internal and external environmental factors. While delivering services and products to the customers the companies have to consider major environmental variables. While analyzing the organic food market industry we can understand that major environmental factors affecting the business include;

1. Excess use of pesticides and other materials for increasing the food production

Most of the farmers are using different types of pesticides for increasing food production and for earning revenue. Over usage of pesticides will directly affect the quality of the product and it also creates problems for the environment (Running et al 2018, p.184). Most of the customers are not interested to purchase products which used pesticides. As per the report of Business Insider (2016) heavy use of pesticides also create different health problems.

2. Increasing the awareness of environmental and food safety issues.

Most of the customers are now well aware of the different environmental and food safety issues. We know the fact that the organic food market mainly focused on delivering quality products to the customers. Most of the time the companies are failed to get the return on investment because most of the customers feel that the products create different health and other related problems (Hu et al 2018, p.1606).

3. Availability of the natural resources

Natural resources can be called as the major raw material for the companies to produce quality goods and services. As per the report of Forbes (2016), most organic food manufacturing companies are facing the problem related to the availability of natural resources. In order for managing the competition and for retaining the customers the companies required the natural resources.

4. Issues related to waste disposal

The companies are also facing a problem related to waste disposal. Most of the organic food manufacturing companies are failed to find an effective solution for managing waste in a productive way.

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Q2. If economic conditions worsen and unemployment rate increases significantly, which retailer(s) will suffer the most in terms of sales and profits? Please explain your rationale.

Answer - If the economic conditions are not favourable, the retailers selling organic products have to suffer in terms of sales and profits. While analyzing the cost of producing organic foods we can understand that it is very high compared to other products in the market. The price for the organic products is also high and if the unemployment rate increase most of the customers will not be interested to buy organic products due to the high price.

Q3. Should Whole Foods consider selling non-organic products as a way to expand their sales?

Yes, it is better for the company to consider selling non-organic products to increase its sales. We know the fact that due to the changes in the market most of the companies are facing competition from national and international players (Demuth et al 2018,p.141). While analyzing the case study we can understand that Whole Foods is facing tough competition from HEB and Kroger. They are selling both organic and non-organic products. In order to compete with companies like HEB and Kroger, the company has to diversify its business into different segments. It is better for the company to sell the selected type of non-organic products at a low price. The company can provide offers such as if they are buying more number of organic products they will get one or two non-organic products free. Based on the changes in the market the companies have to implement new strategies and plans. The company can also expand its business to different parts of the country and they have to give more importance to the quality of the organic products. Most of the customers are health conscious and if the company is introducing more varieties of organic food they can able to capture market share and it also helps for improving the overall profitability of the business.

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