Input Diagnosis
The Nadler-Tushman Congruence Model evolved out of open systems theory as a tool for organizational diagnosis (Falletta, 2005), and is arguably the most complete tool available, in that while complex it has the ability to capture the subtlety and nuance real world corporations. Performance in this model is dictated by strategy, culture, structure, work and people. The key is that these different variables should all be aligned towards a single, unified strategy. If that is the case, the organization will have a higher level of performance, because the different organizational inputs are complementing each other. Where there is misalignment, resources are not working in a synergistic way, and the result is a lot less effective. (MindTools, 2014).
The organizational diagnosis under the congruence model requires the user to have a high level of knowledge about the organization. A tool has been developed, known as the diagnostic funnel, that assists with this. The diagnostic funnel basically breaks down the information gathering function into constituent parts, based on scientific inquiry: data collection, data analysis, unique diagnostic paradigm and diagnostic feedback (Gregory et al., 2007). This technique will be applied to Whole Foods, in an attempt to understand the company's inputs, which will then be run through the framework of the Nadler Tushman Congruence Model.
Strategy
The point of the congruence model is that the inputs need to align with the strategy. Whole Foods operates in the grocery business. The company operates grocery stores, mainly in the U.S. But also Canada and the UK. Whole Foods has differentiated itself in the marketplace with premium positioning. The company has focused on organic and healthy foods, and indeed one of the company's most important target markets is among people who are specifically conscious about certain dietary restrictions, as Whole Foods stocks the niche foods that such people will eat.
Whole Foods has other target markets as well. Knowing that their niche foods were already going to be priced at a premium, as were the organics that the company was making a core part of its business, Whole Foods has added many high-end food products. They carry premium prices, but they also have premium quality. The company thus seeks out wealthier, educated clientele, and foodies, who are customers with the means to pay and with the desire to buy. This is what is known as a differentiated strategy (QuickMBA, 2010). The differentiate strategy not only requires the company to offer premium foods, but to deliver a premium shopping experience, including everything from service to store design to store offerings. Whole Foods has cultivated this premium positioning as a means of differentiating itself in a competitive grocery business, and has been able to grow by offering consumers a supermarket level of selection of niche goods, but with an aspirational shopping experience.
Environment
The first of the key inputs is the environment. The macroenvironment contains a number of different factors, and sometimes the PESTLE model is used to work through them. The economic environment can affect Whole Foods, because consumers have the ability to trade down when they are faced with financial hardship. Economic hard numbers are available, published by the Bureau of Economic Analysis and the Bureau of Labor Statistics. In general, they show a recent trend in the last couple of quarters towards strong GDP increases, and a five-year declining trend in unemployment. Other economic metrics like the stock market, and inflation rates, also point to a very healthy economy going forward -- not perfect -- but supportive of a premium grocery store. During the last recession, Whole Foods' customers were actually not affected as much as customers of some other retailers, so that Whole Foods was able to weather that economic storm.
The social environment has been a key driver of success for Whole Foods. The company has benefitted from increases knowledge of and demand for niche products. Whether it is organic foods, vegan foods, gluten-free, Whole Foods caters to all dietary needs and niches. As such, the rise of interest in these different diets and issues is a social trend that has been well-aligned with Whole Foods' strategy. The political environment has generally been favorable, but it is worth noting that the company has worked hard to maintain alignment with political forces, even striking a controversial deal with big agribusiness over GMO labeling (Benson, 2013).
Resources
Resources are a critical component of Whole Foods' success. The company has ensured that it has the normal prerequisite resources for a success large retail business -- a strong brand, ample access...
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