Trader Joe S Final Paper

Topics: Private label, Grocery store, Supermarket Pages: 15 (3481 words) Published: November 17, 2014

Trader Joe’s
Case Analysis Business Competitive Strategies

Katlyn Cann Sarah Musgrave Jill Chant Alana Gillis Abdel Aziz Cherif

Contents
About Trader Joe’s4
Key Strategic Issues4
SWOT Analysis5
Strengths5
Product & Brand Diversity5
Decentralized Operations6
Weaknesses7
Lack of Retail Channels & Online Presence7
Product Recalls8
Overdependence on US Market8
Opportunities8
Rising Demand for Organic Products8
Rising Demand of Private Labels9
Organic Growth Initiatives9
Opening Smaller Retail Location10
Threats10
Evolving Consumer Preferences10
Increase in Counterfeit Products11
Trader Joe’s VRIO11
Valuable Resources and Competencies11
Rarity12
Cost of Imitation12
Organized to Capture Value13
Trader Joe’s External Environment13
Demographic Trends13
Cultural Trends13
Economic Climate14
Legal and Political Conditions14
Recommendations14
References15

About Trader Joe’s

Trader Joe’s has approximately 414 stores in 400 locations across 37 states in the United States plus the District of Columbia. Many Trader Joe’s stores can be found in old strip malls in suburban locations. The typical Trader Joe’s store has less than 15,000 square feet of selling space. The store works with a much lower square footage than larger supermarket chains that range from about 40,000-50,000 square feet. Experts estimate that Trader Joe’s generate approximately $10 billion in annual revenue. The store carries about 4,000 SKU’s per location compared to about 50,000 SKU’s for most other grocery stores. 80% or more of their products consist of private label items and you can’t find any major brands at the store. They do not offer a wide range of meat but instead they offer a wide range of frozen goods such as fruit. Trader Joe’s do not offer all of the necessities that you may need while shopping therefore a typical family wouldn’t be able to do all of their shopping there. The company scoured high for interesting and dynamic products. They introduce 10-15 products per week and eliminate 10-15. Trader Joe’s is not a technology savvy store and they do not have things such as self-checkouts. Instead Trader Joe’s believes on being able to converse with their customers. Trader Joe’s employees are paid more than if they worked at another grocery store. New part-time hires typically earn $12 per hour. Full time employees earned approximately $50,000 per year. Store captains earn around $100,000 annually. Trader Joe’s main customer focus is people that are health-conscious, enjoy travel, and like trying new things. Key Strategic Issues

Trader Joe’s has no formal corporate social media presence, and any social media presence the organization has is purely fan made. Trader Joe’s employees feel the company is becoming more bureaucratic as it expands (implementing more processes and procedures) which violates one of their 7 core values. These recent changes have also led to increased competition between employees seeking advancement, which tends to detract from the camaraderie Trader Joe’s crew members are known to have. Parking tends to be a big issue to customers who drive as the lots tend to be small, beat up, and not very well organized; this deters driving...

References: (October 31, 2014). Canadean - SWOT Analysis, Retrieved from www.lexisnexis.com/hottopics/lnacademi
(October 30, 2012). WMI - SWOT Analysis, Retrieved from www.lexisnexis.com/hottopics/lnacademic
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