Trader Joe’s
Marketing and Business Strategies: A Case of Trader Joe’s
Instructions:-
A Case of Trader Joe’s
The primary purpose of cases is to create a forum for discussing marketing concepts and strategies. Typically, there is not one “right” answer to a case, but there are stronger and weaker marketing recommendations based on stronger or weaker analyses.
It is important to remember that this is not a report. I’m not looking to see if you read the case or not. You need to take the key issues and think about them within the context of what’s given in the case. The key here is to think about what you would do if you were in this situation. I am looking for your thoughts—with justification. Integrate and synthesize theory and terminology from class and the readings into your case analysis. This is key to producing a superior analysis.
How to Prepare the Written Case Studies
Use the following instructions for each part to structure your analysis.
Part I. Identify the Key Issues in an Executive Summary
In this section you should read the case and ask yourself, “What’s happening here right now?” What are the issues that the firm faces within the context of the case? In many cases there are issues that involve more than one business function. For example, are there marketing issues, management issues, organizational issues, competitive issues, financial issues, etc.? Your executive summary should briefly identify the key issue(s) at hand and describe how you will come up with your solution. Briefly, but specifically, mention your key strategies at the end of this section. This section should be one page maximum—preferably half a page. It might help to write this as your last section.
For Parts II and beyond, remember: You are not writing a “report.” You are writing an analysis. You should take the information in the case, think about it, and then report your thoughts. You should be comfortable saying “I think….” and be comfortable making bold statements. Think of yourself as a consultant hired by the firm to give them strategic advice. They already know what it’s in the case—they want your take on the situation. The use of outside information may be appropriate to support your claims, thoughts, and ideas.
Part II. Identify Internal Strengths
What is the firm doing well internally? Why is it doing these things well? And, more importantly, how do the strengths of the firm tie to marketing theory and concepts? What lead to the success of the firm in the past (or present)? What strengths of the firm will lead to future value?
Part III. Identify Internal Weaknesses
What is the firm doing poorly internally? Why is it doing these things poorly? What lead to these poor tactics? How do the weaknesses contradict “good” marketing theory and concepts?
Part IV. Identify External Opportunities
What is going on the firm’s external environment that the firm can use to its advantage? For example, if you are analyzing a case on McDonald’s, an external opportunity might be the fact that the Atkins Diet has run its course and people are eating carbs again. These are not strategies here—those will come later (Part VII). In this section, focus on the external variables the firm can take advantage of.
Part V. Identify External Threats
What is going on in the firm’s external environment that the firm needs to defend against? Analyze competitors—competition is certainly one external threat. Maybe government regulation is another. Possibly the taste of the target market is another. For example, if you are analyzing a case on Amtrak, one major threat is the growth of Southwest airlines and cheap, national air travel.
Part VI. Other Issues / Metrics
What other issues are going on in the case? How does the firm’s financial situation look? If financial data is given, what are the trends you see? Does anything you see “jump out” at you? Is there a lot of debt? Any expenses seem odd?
Are there any other issues out there that didn’t quite fit in Parts II–V? Discuss them here.
Part VII. Strategies
Based on all the issues that you identified in Parts II–VI, what do you recommend that the firm do now? Be specific as possible. General strategies like “sell more products” are a gimme and add little to your analysis. You have to think deep here. How can the firm use its strengths to take advantage of external issues? How might the firm have to defend itself against threats? How can the firm shore up weaknesses? Again, think of yourself as someone hired to help this firm. What do you tell them and why? What are the risks and short/long term implications of what you suggest? (Please note that this should be your longest section.
Solution
Marketing and Business Strategies: A Case of Trader Joe’s
A Case of Trader Joe’s
Summary
Trader Joe’s stores are experiencing increased expansion in the market. The stores’ management has been showing constant improvement, and each change in management has brought with it new organizational issues which have steered the company to bigger expansion. The company faces numerous competitors in the market from Publix, Amazon and other company but it seems to have the lead due to the trade secrets and support from the staff. The main internal threat in the company is the reluctance to have the technology and to specialize in customized goods thus not stocking other labels available in the market. The company should capitalize on the good relationship with the customer to expand within manageable limits and use technology to ease the operation.
Internal Strength
The company has mastered the art of diversification in retaining the relevance in the market. The store generally stock what is unavailable on the market, the store has a variety of choice of both natural and organic foods; the company has offered to other producers by giving private labels of the product thus it has established a brand. Apart from selling food products, the store has invested in music and pantyhose. This diversification makes the store a one-stop shop, and it can fairly weather challenges in faced by specialized sales. Traders have another important approach which has helped the company grow, the customer-centered service delivery. The company has created avenues to educate the customer. This strategy helps to create loyalty and gives a business the edge to weather market challenges. Like its competitors, the Trade Joe’s operates small business units. This gives it a chance to compete and survive in the market (Harris and Lenox).
Another internal strength of the Trade Joe’s is the value of employees. From the report, it has clarified that the employees are rewarded handsomely thus improving the working morale. The company operation is aimed at lowering the cost of production while maximizing the profit realized (Conrad). It cut the advertisement cost and adopted cheaper means of using newsletter and audio recording. This makes the company have reduced expenses. Instead of giving offers Trade Joe’s uses a better approach of lowering the price of the commodity. From management perceptive, I think the management has correct operational strategies. A pivotal internal strength adopted by the company was to keep trade secret and reduce giving the competitors clue on the ways the company has managed to prevail in the market. The Albrecht Family has shown the management fully support a position proved by the once-per-year visit to the headquarters to check the progress. Trade Joe’s strong appreciation of staff makes it thrive in the market. The company also encourage the full participation of the staff in helping the customers shop. This customer-centered marketing makes the customers feel appreciated.
Internal Weakness
The bigger internal weakness was noted during the management of Dan Bane who had reduced appreciation of technology in the running of the business. It is stated that the CEO believed that talking to the customer was more effective however considering the audience a customer care can reach to as time, the reluctance to adopt advertising screen in the stores is a weakness. Another weakness noted in the company was the customized labels in the store, this reduced the chances of retaining customers as could not find any major brand in Trader Joe’s. The constant change of products by Trade Joe’s every week frustrate the customer who needs to buy similar goods in from the store. The introduction and elimination of new and old products from the store, however, have both positive and negative elements. The positive side is that the store reduces goods which were not fast going but again reduced customer satisfaction on the discontinued goods in the store (John).
External Threats
Trader Joe’s has experienced several competitors in the market; this includes the Tesco Company which has opened several branches in the western US. This British company is reported to have similar operating strategies to the Trader Joe’s. However, the Tesco Company did not triumph the market in the US. Another competitor in the market is the Wal-Mart express. The market penetration trends of this competitor are on the rise (Czepiel and Kerin). In the year 2011, the Wal-Mart launched stores which were recorded to be doing well. The market strategy of Wal-Mart was the adoption of the small-format categories which are believed to be effective in the competition with large multiple channels. Other competitors in the market include Target, Publix and the Amazon which has adopted the online marketing strategy.
External opportunities
The company enjoys various opportunities in the market. The operation strategy by the management increased suppliers loyalty as Trade Joe’s did not charge them for stocking their products. The company also limits the information they share to the public this again limit the chances of the competitors learning the operation mechanism in of the company. The binding secrecy between the vendors and the retailers gave the company an edge over its competitors. This cordial relationship with the suppliers is an important external opportunity. From the case study, it is evident that the company has increased customer loyalty and they persuade the company to open new outlets. Customer attraction to Trade Joe’s creates an opportunity for expansion. The fact that customers probe for expansion of the company makes me feel that the store offer unparalleled services.
Other Issues (Trends)
The company has been experiencing tremendous growth. This is shown by the grand opening of the new outlets. From the case study, on June 29, 2012, Trader Joe’s had a historic opening of the outlet branch in Lexington, Kentucky. A similar scenario was seen during the opening of another outlet in South Carolina on March 22, 2013. The trend of management of the company seems to have the good experience and business acumen. From the first CEO Coulombe to his immediate successor John Shields and finally to Dan Bane the management acquired different styles, and they all saw the Trade Joe’s company succeed. The exponential expansion of the company is indicated by the many stores opened in the 37 states. The profit margin of the company also hints of reduced threats in future operations. According to the analysis by the Glassdoor.com, the Trade Joe’s is a company on the rise.
Recommendation
Considering the existing market strategies adopted by the management since the start of the Trade Joe’s company is reception and continuity in the market are guaranteed. However, the store needs to do some changes to reduce the competition further and maintain its niche in the market. The management should consider the use of TV screens within the stores to reach out to the customers however this should be done as a complimentary approach to one-on –one customer service. The use of screen will make the company reach a wider audience and reduce the hiring of more staff to guide the customers (Wind and Lilien).
The stores should also reconsider the idea of stocking customized goods solely in the market and in return have other brands on the shelf. This will make customers have a variety to choose from and thereby increasing the marketing. I think the idea of the change of products from the shelves should be done sequentially. Am for the idea of the use of product cycle principle thus the store should allow products to be in the market for a considerable time and then eliminate them once they attain the extinction stage in the market. This removal of the product should be done gradually. The adoption of these new strategies will cost the store in term of the investment cost of procuring and installation of the screen however the cost benefit will outweigh the existing state of reaching out to customers.
Trade
Joe’s should keep the good relationship existing with both the suppliers and
the staff at the stores. This strategy adopted has helped the company develop (Joseph). The management
should also endeavor to keep the secret of the expansion, the success and the operation
secrets this will continue giving it an edge in the market. As noted in the
case study, the store enjoys good reputation from the customers; this is an opportunity in the market which should be
capitalized by the management. I suggest Trade Joe’s should foster the relationship
and have expansion which will not jeopardize the quality of services given. The
cost implication of these strategies will be insignificant as they are the
normal operation.
Works Cited
Conrad, David. “Workplace Communication Problems: Inquiries by Employees and Applicable Solution.” Journal of Business Studies Quarterly 5.4 (2014): 2-17.
Czepiel, John and Roger A. Kerin. COMPETITOR ANALYSIS. 2012. http://pages.stern.nyu.edu/~jczepiel/Publications/CompetitorAnalysis.pdf. 6 July 2017.
Harris, Jared D, and Michael Lenox. Three Critical Factors of Business Strategy. 26 Feb 2014. https://ideas.darden.virginia.edu/2014/02/three-critical-factors-of-business-strategy/. 6 July 2017.
John, F. Dix. Strategic planning. 2012. The Ohio State University. https://fisher.osu.edu/supplements/10/1470/All_Articles.pdf. 6 July 2017.
Joseph, Laran. The Importance of Business Ethics and Corporate Social Responsibility. 10 Dec 2013. https://blog.udemy.com/importance-of-business-ethics/. 30 June 2017.
Wind, Yoram, and Gary Lilien. Market Strategy Model. Philadelphia: Elsevier Publishers Ltd, 2012. 6 July 2017. <https://faculty.wharton.upenn.edu/wp-content/uploads/2012/04/9305_Marketing_Strategy_Models.pdf>.