...------------------------------------------------- UGBA 115: Competitive Strategy Trader Joe’s Midterm Case Analysis ------------------------------------------------- Jean Carlo Hoyos The Industry The grocery industry in the United States is currently an attractive industry (a.k.a. profitable). This attractiveness derives from the relative low threat of new entrants, low supplier and buyer powers, and low threat of substitutes. The main factors driving these results are the low concentration of suppliers and buyers, the significant barriers to entry due to high up-front investment costs (for infrastructure and distribution channels) and scale economies, low availability of substitutes, and the threat of retaliation from incumbents (by lowering price, for example). However, it is important to note that there is a heated rivalry among incumbents due to low seller concentration, high price sensitivity from consumers, dynamic price changes and strong exit barriers. Refer to Exhibit 1 for a detailed observation of the forces influencing the industry’s attractiveness. The industry offers opportunities and poses threats in several areas. In the economic environment, the rising oil prices increases costs in the supply chain and/or distribution channels. In contrast, the several free-trade agreements with different countries open the doors for a variety of products from abroad at potentially lower prices or higher quality. Also, the proliferation of high end and low...
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...Naomi Piché Professor John Burtt BUS 114 Management May 21, 2013 Case Study 1 : Trader Joe’s 1. In what ways does Trader Joe’s demonstrate the importance of each responsibility in the management process-planning, organizing, leading, and controlling? -Trader Joe’s demonstrates planning by intending to carry unique products at a low cost within a fun, relaxing environment. Their organizing skills were apparent due to their approach to find unusual foods from around the world, contract directly with manufacturers, label their products with catchy phrases and by maintaining a small stock of each product. Their leadership was exemplified by hiring employees with job skills such as being “ambitious and adventurous” and providing a laid-back atmosphere both for their workers and customers. Their employees had higher pay rates than those that worked for their competitors and had great benefits. Because managers were hired from within, they had an ultimate knowledge-base of how the system works. Also, the employees were encouraged to taste and learn about the products to be able to share with their customers, creating a more involved employee to customer relationship. Regarding Trader Joe’s control, they were able to control real estate costs by buying smaller stores and staying away from “prime” locations. Their “one in, one out” policy to get rid of poorly selling products or have rising costs replaced by new products helped to control costs and also showed their customers...
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...Andrew Wash GBA 490-321 Written Case 1 February 12, 2014 Table of Contents Issue #1 ……………………………………………………………………………… 2 Issue #2 ……………………………………………………………………………… 3 Issue #3 ……………………………………………………………………………… 4 Recommendation ……………………………………………………………………. 5 Dominant Economic Characteristics ………………………………………………... 7 PESTEL Analysis …………………………………………………………………… 8 Five Forces Analysis ……………………………………………………………….. 10 Drivers of Change in the Industry …………………………………………………... 12 Current Strategy …………………………………………………………………….. 13 Competitor Analysis ………………………………………………………………... 15 SWOT Analysis …………………………………………………………………….. 17 Financial Analysis ………………………………………………………………….. 19 Issue #1 Trader Joe’s first problem is that information is occasionally leaked regarding the identity of their private label suppliers. Trader Joe’s thrives off keeping the identity of their suppliers a secret to all consumers and media in order to maintain the integrity of their products. Since 80 percent of the products sold at Trader Joe’s are private label, the identity of the supplier is not known because the product is sold under the Trader Joe’s brand name. Information leaks regarding Trader Joe’s suppliers could damage their brand image because it could cause Trader Joe’s to lose its charm to consumers and because it could make other companies wary of supplying their goods. First, information leaks could cause Trader Joe’s to lose its charm in the eyes of the consumer. There were news reports spread within...
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...Job Satisfaction Trader Joe Kimberly Love Dr. Thomas Schaefer Business 520 Leadership and Organizational July 20, 2014 Trader Joe’s founder had a perception for his stores after vacationing in the Caribbean. He perceived that the customers would try new things while on vacationing. Also realized that less is better. Many time customers buy more when there is less to choose from in that store. Their attention is only selective when there is not a big variety of supplies. Trader Joe case describes the business practices and how they reinvented themselves. Trader Joe’s set themselves apart from the 7- Eleven style store they had and they became top competitors to Whole Foods and Dean and Deluca giants. The case gives a description on the history of the retail chain and various aspects of its unique business practices. The retail store offered a selection of exclusive, which were mostly private-labeled products, and replaced poorly performing products with new ones. Trader Joe’s is a small supermarket chain which offers a limited selection of unique food products at reasonable prices. It sales most of its products under the private label 'Trader Joe's' and its variants. T.J. targets its stores at highly educated and travelled, but not necessarily wealthy, segments of the population. Trader Joe has a team of experienced buyers, who does extensive traveling and research before bringing new products into the stores (Palmeri, 2008). Trader Joe also avoids the...
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...Trader Joe’s No average Joe Trader Joe’s is an American privately held chain of grocery stores founded by Joe Coulombe. Trader Joe’s have been successful business for long time with their unique innovative strategy of selling natural and organic food products with only one brand of an item for low price. Their unique culture of relaxed beach environment and helpful knowledgeable employees makes their customer to stay loyal to the brand. Eighty percent of Trader Joe’s has in-house products that differentiate them from competitors and hard to imitate. Trader Joe’s target young educated people who want to eat healthy for low prices. They can really expand their business by investing in marketing, social media, loyalty- card program and building parking garages and gain bigger broader market segment in food industry. This also will help them competitive advantage over their competitors as they will have solid brand image and be successful over the long term. SWOT Analysis The strengths of Trader Joe’s are selling organic & fresh grocery at low prices, introducing new products to their stores frequently and offering friendly customer service. Trader Joe’s sell natural and organic food at cheaper price than its competitors. They buy in bulk one item rather than buying lot of similar items, which gives them competitive advantage over other supermarkets. Trader Joe’s introduce 10-15 new products every week and had special season items and; thus customers liked trying new...
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...Final Exam – Trader Joe’s Case Study 1. Supermarket Industry Analysis In 2013, the traditional supermarket industry is unattractive because of: a) Existence of powerful substitutes in the form of large discount retailers (Wal-Mart, Target), warehouse clubs (Costco, Sam’s Club, BJ’s, and pharmacy chains (CVS, Walgreen’s) that have increased emphasis on grocery sales. * Because increased traffic leads to increased sales of higher margin items in retail stores, there is growing attractiveness for retail stores to enter grocery industry * Retail leaders such as Wal-Mart and Target run highly efficient operations. Coupled with a large volume sale philosophy, both are able to take market share from traditional supermarkets through significant price cuts. As such traditional supermarket share has dropped in last year from 67% to 51% with the growth of retailers participating in grocery sales * Lack of differentiation across products and brands gives consumers a high degree of bargaining power because they incur little to no switching costs between rival competitors and brands (see below) and because of the growth of substitutes. Customers who want to do all their shopping both retail and grocery supplies either in small volume purchases or in bulk have many options to choose from (Wal-Mart vs Schnuck’s vs CVS vs Costco) b) Strong competitors across all segments of supermarkets, which can be broken down into traditional, premium, and discount stores...
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...Trader Joe’s questions; 1. How do firms in the supermarket industry make money? 1. Please conduct a financial ratio analysis using the data in Exhibit 2. How do the results reflect different strategies pursued by the 4 firms? 2. What do the results say about how firms in this industry can deliver strong financial returns in different ways? 2. What are the key sources of Trader Joe’s competitive advantage? 3. What are the main threats to Trader Joe’s competitive advantage? Is their advantage sustainable? 4. How would you modify Trader Joe’s strategy moving forward? What are the key sources of Trader Joe’s competitive advantage? Trader Joe’s Competitive Advantage Their competitive advantage stems not from this “less is more” approach to strategy but from how they execute it. Dan Bane explained, “It’s kind of a loose-tight company. We’re very controlling and tight about cost structure and processes; we’re very loose about how we want the stores to run. We just try to do a good job of what we do, trying to find the next Charles Shaw and trying to keep our hustling going on the buying side.”8 He noted that they don’t carry products like flour, toilet paper, or Coke because these are commodities for which Trader Joe’s can’t get a better price or offer unique value. Bane also acknowledged that by routinely turning over 20 percent of their slower-moving products, customers sometimes were upset and he frequently received letters asking why a favorite...
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...John Smith MGT 280 20 January 2016 Case 1 Analysis Questions 1. Trader Joe’s demonstrates the importance of each responsibility in the management process: • Planning- Trader Joe’s demonstrates this in its ‘Cost Control’ section. The company prides itself on its thriftiness and cost-saving measures. The company does this by providing delicacies from all around the world in small stocks making each product fight for its place on the shelf. This process enables customers to make easier decisions on which item to purchase. • Organizing- Trader Joe’s demonstrates this in its ‘From Corner Store to Foodie Mecca’ section. The company states that many different individuals are attracted to the delicious foods and the laid-back but enthusiastic customer service. The company also states that its employees and managers greet customers with smiles and are quick to engage in friendly conversation. This allows the customers to enjoy the atmosphere of the store and as stated by the company, “Shopping at Trader Joe’s in less a chore than it is immersion into another culture”. • Leading- Trader Joe’s demonstrates this in its ‘Strength from Within’ section. The company inspires its employees to work hard to achieve high performance by providing numerous benefits for them such as medical, dental and vision insurance. In addition to this, employees earn up to 20% more than other chain grocers. • Controlling- Trader Joe’s demonstrates this in its ‘Customer Connection’ section. The...
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...[pic] TRADER JOE’S Description: Trader Joe’s has become a multi-billion dollar national chain partly through its ability to find cheap real estate, skip name brands and smartly manage its supply chain. It’s also due to its workforce management practices. Below, excerpts from a book Trader Joe’s Adventure, review the company’s management compensation, encouragement of multitasking, screening and wages, careful use of money, fun culture, sense that its people are its brand, and communication style. Learning Objective: Our focus with this case is on immersing students in the fundamentals of organizational culture. Organizational culture is defined as a complex set of shared beliefs, guiding values, behavioral norms, and basic assumptions acquired over time that shape our thinking and behavior; they are part of the social fabric of the organization—its genetic code. As such, culture drives the organization and guides the behavior of everyone in that organization—how they think, feel, and act. In other words, the culture forms a behavior template. Davis and Landa succinctly captured the essence of culture when they say, The factors which define culture are in part internal, deriving from the unique character of the organization and, in part external, determined by the background and experiences managers and employees bring to the enterprise. Culture is a major determinant of productivity; it shapes organizational responses to external pressures; and suppresses or enhances...
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...the field. II. Background of the Case Satin Organic Products, held by Susan Jones, is the major supplier to large health food grocery chains like Whole Foods and Trader Joe’s. Susan and her vice president in marketing, handles all the sales responsibilities of the company. They work directly with the buyers, and built a relationship to their customers. They are known with an outstanding reputation as people who cared about the quality of their products and their customers. But as time gone by, their company grew and Susan and Sal is faced with a challenge of no longer able to handle the sales responsibilities. III. Objectives 1. To decide which option would best fit the company’s image in hiring employees. 2. To know the possible outcomes of hiring inside or outside sales agent. IV. Analysis of the Internal Environment Satin Organic Products has been in the market for 9 years which helped them build relationships with large companies like Whole Foods and Trader Joe’s. The owner and their vice president in marketing were very hand on which is the strength of their company because the customer feels secure in transacting with their company. But due to the lack of employees the company cannot meet the demand of their customers. (Basis: Satin Organic Product became the major supplier of large health food grocery chain. Susan and Sal handled all sales responsibilities, working directly with their buyers.) V. Analysis of the External Environment Once...
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...Strategic management BIG CASE DISCUSSION 4 (Question 3&4 of the external analysis) I. What factors are driving industry changes, and what impacts will these changes have on competitive intensity and industry profitability? * Driving forces 1) Increasing globalization: * New markets in Canada and UK: WF has acquired Wild Oats Market in the US and Canada. - New competitors from neighbor countries like Fresh & Easy from British supermarket giant Tesco. * Products from other countries, for example: Lebanese fig jam, preserved lemons from Morocco, Indian curies, Thai rice, stuffed grape leaves from Greece, and goulash from Hungary. 2) Changes in the long-term industry growth rate: - Natural food generated $22.3 billion in sales in US in 2008, up 10% from 2007, and up 37% from 2004. - UPC-coded organic foods accounted for 49 billion in sale, 16% higher than the previous year, and up 132% since 2004. - Global sales of organic products were estimated to be $52 billion in 2008 and to have grown at the compound rate of 13% since 2004. 3) Changing societal concerns, attitudes, and lifestyles - People are more concern about health and food safety -> Consumer demand for organic products growing at double-digit rates – much larger than that of the traditional grocery products (2-3%) - Demand for value-priced: The United States now spends more than $1 billion a year to import organic food, according to the USDA, and the ratio of imported to exported...
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...recommendation is to launch a mass-market product under a different product line in order to monetize excess inventory and position Neptune to capture more of the North American seafood market share. Going forward Neptune management must be more cautious in matching investment in production to growth in market demands. B. Situation Analysis Summary: Neptune Gourmet Seafood is currently North America’s third largest seafood producer with 4% in market share. Tagged “The Best Seafood on the Water Planet”, Neptune has a reputation to maintain and focuses heavily on its product to keep its customers satisfied. Neptune has done a great job reaching a variety of customer. 30% of revenues from grocery chains, 33% from wholesalers distributing across the U.S., and the remaining third coming from sales to the biggest cruise lines and also choice restaurants within 250 miles of Neptune’s headquarters. Through the situation analysis it is apparent that the root cause for excess inventory is a rapid growth in production capacity due to technological investment but less significant growth in its single high-end market segment (See Root Cause Analysis in Appendix D). The two sides of the decision to either cut prices or introduce a new line are best highlighted by the interests and concerns of Jim Hargrove and Rita Sanchez: (See full Stakeholder...
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...Whole Foods Strategic Audit Robert Harper Andrew Pequinot Taylor Tisdale Renee Werner MBA 8820 Professor Denis Grégoire April 18, 2006 Executive Summary – Whole Foods Strategic Audit Whole Foods Market competes successfully within the organic/natural foods industry, having enjoyed close to 19% growth over the past five years. As a point of comparison, Kroger – a traditional supermarket operator – only grew 4%. On a larger scale, the organic food retail industry in the U.S. has fared well in the last decade. Reported sales grew 23.4%, which is much more than the 3.3% growth of the overall food industry during the same time period. However, a recent announcement from a Whole Foods competitor recently sparked considerable buzz in the industry and put a mild dent in Whole Foods Market stock price. The announcement came from the industry giant Wal-Mart who unveiled its plan to more than double its organic offerings and begin marketing to more upscale clientele, many of who currently shop at Whole Foods. Wal-Mart is well known for squeezing supplier margins to bring “everyday low prices” to consumers. As the industry leader in several retail categories, including traditional grocery sales, Wal-Mart has the size and influence to significantly impact the organic food landscape if it dedicates itself to the market. Although Wal-Mart’s impact on the natural niche remains to be seen, it’s critical that Whole Foods review its strategy in light of Wal-Mart’s entry. Whole Foods’...
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...QUESTIONS FOR CASE STUDY ASSIGNMENT STRATEGIC EXCELLENCE Licensed for use by the students of the Executive MBA Program, The Icfai University. Not to be reproduced. QUESTIONS FOR CASE STUDY ASSIGNMENT STRATEGIC EXCELLENCE ANSWER THE QUESTIONS FOR ANY TEN CASE STUDIES Questions for 18 case studies are given below. Each case study assignment has 2 questions. Students are required to answer questions for any 10 case studies (20 answers). Students are advised to submit answers for all 10 cases in one go, for results to be adjudged in one instance. 01. McDonald’s in the United Kingdom a. When McDonald’s entered the UK market in 1974, it initially failed to attract British customers and reported losses. However, as of 2009, the UK was one of the most promising markets for McDonald’s. Many factors were responsible for this change in situation. First, identify the subset of factors that could be attributed to the organization’s strategies. Next, tabulate that subset of factors along with the associated strategies for each factor. Finally, classify these strategies into originally intended and subsequently emergent strategies. b. As of 2009, McDonald’s faced many challenges in the UK. In your opinion, what strategies should McDonald’s adopt at the corporate, business, and functional levels to continue its growth trend in the UK? Give reasons for your answer. 02. Emerging Markets Strategy: Nokia Life Tools for Rural Markets a. Business strategy is often compared...
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...Strayer University Course: Bus 599 Prof: Elile Awa 01/20/2012 Title: Whole Foods Market Assignment 2 John-Miguel Onkony Discuss the trends in retailing of organic foods and the impact of these trends on Whole Foods Market? Fresh produce was the most popular organic product on the market and biggest its sellers were lettuce, broccoli, cauliflower, celery, carrots, and apples. Meat, dairy, bread, and snack foods were among the increasing popular organic product categories too. The Supermarket chains like Wal-Mart and Safeway had created nonperishable organic and health food sections in most of their stores. Whole Foods struggled to find organic beef and chicken suppliers large enough to supply its entire store and several factors transformed organic foods retailing into the top-growing segment of U.S. food sales. First of all, the people were becoming better educated about foods, nutrition, and the eating became a healthy habits. Second, there was an increasing number of consumer concerns about the purity and safety of food due to the presence of pesticides, growth hormones, artificial ingredients, chemicals, and genetically engineered ingredients. Third, there was a health consciousness trend among people of various ethnic groups, and a belief that organic farming had positive environmental effects. The higher the price...
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