Trader Joe's Business Strategy
Summary:
Requirements: Case Write-up answers are to be no more than two pages of text in length, double-spaced with standard margins and 11-pt font.
Topic: Trader Joe’s
Please read the following articles and answer the questions.
https://www(dot)cbsnews(dot)com/news/10-secrets-to-trader-joes-success/
https://www(dot)forbes(dot)com/sites/deniselyohn/2018/06/13/six-surprising-facts-that-explain-trader-joes-secrets-to-success/#7a42038c1601
these are the questions.
Question:
What is the business-level strategy of Trader Joe’s? Please define the industry first and explain its business-level strategy with consideration of the source of competitive advantage (cost or uniqueness) and the scope of operations (broad or narrow).
Considering the source of competitive advantage and the scope of operations, which company do you think is the main competitor of Trader Joe’s? Please explain why.
Do you have any suggestions for Trader Joe’s to keep competitive in the industry? If it has a serious issue, please suggest a way to fix it. If not, please suggest any recommendations to improve its business.
If Trader Joe’s considers expanding its business portfolio, which integration (Vertical/horizontal) will increase its corporate value? Please explain why.
You do not need to include the questions in your answer, but please include the question numbers in your answer.
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Trader Joe's
1 Trader Joe's (TJ), an American chain of grocery stores in California, has several stores in over 42 states. This grocery store company took over a chain of convenience stores in Los Angeles when convenience stores made very little sense. Since then, Trader Joe's has added value to its customers by offering quality products for the best prices by selling products with its label on them. The company beats stiff competition from Sprouts Farmers Market and other grocery stores by sticking to its eccentric playbook. Through its transformation from its old form to its current state, Trader Joe's has made much progress to become part of an $8 billion company. One unique strategy that Trader Joe's took was to offer high-quality products at low prices.
2 Tobak (2010) posits that Trader Joe's manages to offer high-quality products at cut-prices by getting large volumes of products from its suppliers at affordably lower prices. It becomes a win-win situation for both the supplier and this company. Other than the low costs, Trader Joe's has earned its consumers' trust who believe in the company's brand. Over 80 percent of its products bear the company's brand, giving customers reasons to maintain their loyalty (Tobak, 2010). TJ uses the secret technique that sees to it that no one knows who is manufacturing its products. This strategy works for its competitive advantage as its suppliers would also not give the same deal to TJ's customers. Without sponsoring loyalty programs or having sales, Trader Joe's buys directly from its suppliers and bargains for the best price before passing the savings on to its customers.
3 Secrecy is Trader Joe's competitive advantage since its competitors would not know how its products come to be. According to Yohn (2018), the company's suppliers would not also give TJ the same deal as its customers or competitors, making it easier for them to succeed in the market. Adding to its low prices for its high-quality produ...