Case3 599 Coursework Example | Topics and Well Written Essays - 1250 words

Case3 599 - Coursework Example It was acquired by John Mackey, a college dropout who started with a Texas natural foods store called ‘Safeway.’ He expanded vigorously and by 1999 had 100 stores. Whole Foods is also listed on NASDAQ, currently as WFM. (Market, 2013) Porter’s Competitive Strategies A well positioned firm can function better even if its outer profitability doesn’t seem to be high compared to other companies. Within an industry, different companies position themselves, according to Michael Porter on different strategies based on their target scope and the advantage they have over other companies. Michael Porter has identified four strategies in this regard: cost leadership strategy which focuses on a broader market segment and low cost strategy to drive out competitors. Secondly, there is the differentiation strategy which also caters industry wise and has the advantage of producing unique products. There are also tow focused strategies which are basically subsections of the two aforementioned strategies; focused cost leadership that caters to a narrower target segment but competes on the basis of price, and focused differentiation strategy which differentiates and is unique yet caters to a narrow market segment. ... d sells them to wholesalers with a promise that they will sell them at a premium price and this is how it has differentiated itself in the minds of consumers. Whole Sales Market has managed to carry on with such a strategy because of the facilities and the skilled expertise to handle and manage differentiation in a broad target market. The firm needs adequate sources and new plants were opened up to cater to the needs of expansion as well. Since these are fast moving goods mostly that WMO produces, the shareholder value model wouldn’t apply as much as the unlimited resource model; that WMO needs to invest and manage risk and uniqueness in order to sustain its position in the marketplace for a long time. However, WMO may also be pursuing a cost leadership strategy which is why it has expanded in less affluent areas as well. Research shows that compared to other organic stores, WMO sells products at a cheaper price. And this is seen in the prices as well as the process of qualit y assurance. Food has to comply with the high quality standards that WMO has to maintain according to its policies; quality comes first. There are 270 stores, and they have their own farmers who also place utmost importance on quality rather than on negotiations over price that compromise quality. Many products of WMO are cheaper than the products at Safeway. They also focus on the ‘Whole Deal’ by either keeping the prices the same and adding value or cutting prices whenever possible without compromising on quality. (Porter, 1998) Congruence The Nadler-Tushman Congruence Model is a theory which aligns the inputs, throughputs and outputs of a system and it functions on the basis of certain assumptions: Organizations are part of a larger environment and social system There are three levels in

Economics Essay Example | Topics and Well Written Essays - 3000 words

Economics - Essay Example The political parties in most of the economies try to enhance the lifestyle of the individuals through economic growth and income redistribution in the market. Redistribution of income and raising the standard of living in society are mutually exclusive goals of the government. Figure 1: Economic Growth (Source: Scully, â€Å"Economic Freedom and the Trade-off between Inequality and Growth†) The economic freedom of a country is directly proportional to the level of economic growth in it. Figure 2: Income Inequality (Source: Scully, â€Å"Economic Freedom and the Trade-off between Inequality and Growth†) On the other hand, the level of income inequality is desired to fall with the rise in the level of economic freedom and hence, economic growth. However, there is a strong debate regarding the relationship between income inequality and income growth. Economic Inequality is the discrimination among individuals in terms of income or wealth. It basically elaborates the diffe rences among the individuals of a society in terms of their income, wealth and assets. Income Inequality can either be absolute or relative. Absolute income is the gross income received by the individuals. John Maynard Keynes states that the consumption expenditures of individuals are estimated on the basis of absolute income. Thus, absolute income inequality is the income inequality that denotes the differences in gross income thresholds of the individuals. James Duesenberry claimed that savings and consumption spending decisions of the individuals do not depend on the level of absolute income. Instead, it depends on the relative income level. The savings and consumption expenditures of the individuals are made by them after analyzing their position of income relative to others. Relative income inequality would occur when the absolute income levels would be unevenly distributed in an economy (NBER). Among all the methods, the most important method of measuring income inequality is Gini Coefficient measurement method. This measure estimates the statistical dispersion of income distribution of a nation. The value of income inequality on the basis of a frequency distribution is given by the Gini Coefficient. The value of this index lies from 0 to 1. Where, 0 indicates a situation of perfect income equality and 1 indicates a situation of perfect inequality of income. The diagrammatical representation of a Gini Coefficient is provided is a Lorenz Curve. Figure 3: Lorenze Curve Perfect Income Equality Line Income Inequality Cumulative % of Income Lorenze Curve Cumulative % of Population (Source: Authors Creation) The above graph is of a Lorenze curve (the convex curve). The distance between the perfect income equality line and the Lorenz curve measures the degree of income inequality. Therefore, greater the distance, greater is the level of inequality. The above coefficient is calculated by: It is believed that a greater extent of inequality in income in a nation i mplies the concentration of economic power in the hands of a small group of individuals. In such a situation, the producers in the market get tempted to allocate resources to luxuries and comfort products, instead of basic necessities. The lack of basic necessit