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Trader Joe’s International Expansion Market Analysis

Student’s Name

Institution Affiliation
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Contents
1.0 Executive Summary...............................................................................................................................2
2.0 Introduction...........................................................................................................................................3
2.1 Company Overview...........................................................................................................................3
2.2 SWOT Analysis.................................................................................................................................4
2.2.1 Strengths.........................................................................................................................................4
2.2.2 Weaknesses.....................................................................................................................................5
2.2.3 Opportunities..................................................................................................................................5
2.2.4 Threats............................................................................................................................................5
2.3 Country for Expansion.......................................................................................................................5
3.0 Economic Analysis................................................................................................................................5
4.0 Cultural Analysis...................................................................................................................................7
5.0 Political Analysis...................................................................................................................................8
5.1 United Arab Emirates........................................................................................................................8
6.0 Ranking of the Countries based on the Appeal......................................................................................8
6.1 United Arab Emirates........................................................................................................................8
7.0 Proposed International Approach..........................................................................................................9
8.0 References.............................................................................................................................................9
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Trader Joe’s International Expansion Market Analysis

1.0 Executive Summary

Trader Joe's is a unique private food retail chain founded by Joe Coulombe in 1967 in Monrovia,

California. The company now has 530 sites throughout the United States. Their annual revenues

are projected to reach $13 billion (Adams, 2020). The average size of a Trader Joe's location is

10,000 square feet. They keep their businesses small and only carry a few items to keep costs

down. They sell more than 70% of their things under their own brand, allowing them to save at

least 20% on product costs (Adams, 2020). Using private labels, the company can also provide

high-quality products to their clients. Trader Joe's main strengths include consistently inventing

new products and responding to its customers. As a result of its success in the United States, the

company intends to expand internationally.

This paper highlights analysis of three countries that Trade Joe intends to expand to and comparing

it to the United States. As such, the document highlights the company overviews, economic

analysis of these countries in comparison to the United States. The economic analysis includes

various macroeconomic indicators of the country. As well, the study highlights business and

corporate culture of this countries company to the United States. The cultural analysis indicates

that Germany has similar culture with the US, while India and China have variation in their culture.

Political analysis is also undertaken in this study, which reveals that all countries are stable but few

political risks.
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2.0 Introduction

2.1 Company Overview

Trader Joe's is a unique private food retail chain founded by Joe Coulombe in 1967 in Monrovia,

California. The goal of this supermarket was to cater to Pasadena's affluent and over-educated

customers. In the year 1979, the popular California supermarket was purchased by the German-

based grocery company Aldi North. After the takeover, Aldi North decided to sell the Private

Labeled products to customers (Adams, 2020). In 1988, CEO Coulombe was succeeded by John

Fields, a fresh employee. Trader Joe's expanded to several states under JohnFields' management,

including Boston, Massachusetts, California North, Arizona, and a few outlets in New Jersey.

Trader Joe's revenues soared as the supermarket expanded across the United States, and it steadily

increased. The company now has 530 locations around the country (Adams, 2020). Their yearly

revenues are projected to be in excess of $13 billion. Trader Joe's establishments are typically

around 10,000 square feet in size. To keep expenses down, they keep their stores tiny and only

carry a few things. More than 70% of their items is sold under their own brand, allowing them to

save at least 20% on product prices (Adams, 2020). The corporation can also supply high-quality

products to their customers by using private labels. Trader Joe's primary skills include

developing new items on a regular basis and listening to its customers. The corporation hopes to

expand in the foreign market as a result of its success in the United States. Germany, China, and

India are among the countries where the corporation plans to expand.
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2.2 SWOT Analysis

2.2.1 Strengths

Some of the strengths of Trader Joe’s are that it is a credible brand that has been around for 50

years. This credibility provides a secure image and idea of what the store is, and what it offers to

their consumers. As well, another company’s is that it has a very wide distribution network, with

over 530 stores nationwide (Adams, 2020).

2.2.2 Weaknesses

Trader Joe’s has had to go through product recall a few times. Some products were believed to

be contaminated and had to be removed for safety reasons. It is a company’s duty to ensure their

customers that their products are safe to use/consume. When a company is required to recall

products, it damages the company’s reputation and makes consumers question their products.

2.2.3 Opportunities

The opportunities for Trader Joe’s include expanding to international market and in the

expanding markets for private labels. Another opportunity is the growing demand for organic

foods (Adams, 2020). Trader Joe’s is valuable to consumers because of their organic products,

and the demand for organic products continues to grow, which can be very beneficial for Trader

Joe’s.

2.2.4 Threats

Competition is major threat of Trader Joe’s market. The food market is highly filled with

competition, and it is important to constantly create competitive advantages in order to be ahead

of your competitors. Trader Joe’s has some very well established and successful competitors, and

the company has to be very cautious and innovative to be able to distinguish from competitors.
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2.3 Country for Expansion

1. United Arab Emirates

3.0 Economic Analysis

Economic analysis involves utilizing the macroeconomic data to determine future investment

possibilities. As such, economic analysis will help Trade Joe determine the best market to

expand and help the company generate more revenue. There various economic indicators that

include GNI, PPP, GNP, population, inflation rate over time, as well as unemployment rate.

Country United States United Arab Emirates

Economic

Indicators

GNI per Capita 21.69 trillion 686.9 billion PPP

PPP dollars dollars

GNP 21.43 trillion 421.1 billion  USD

USD

Population 329.5 million 9.89 million

Inflation rate 1.23% 4.95%

over time

Unemployment 4.6% 4.24%

rate

Source (Trading economics, 2021)

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Based on the economic indicators highlights above, Trader Joe company can expand in

international market as the country highlighted that the individuals consumer products in the

market. Compared to the United Arab Emirates, United States has higher gross national income

per capita. The United States has higher gross national product compared to UAE. Thus, both

countries have higher consumer rate of the products in the market (Trading economics, 2021).

United States has a higher populations compared to the UAE; as such, using the population

Trade Joe have a chance of expand in this market as there is higher demand of grocery related

products. The inflation over time indicates the increase in prices over the years.

4.0 Cultural Analysis

4.1 United Arab Emirates and United States

Although there are difference and similarities in business and corporate culture between the

United Arab Emirates and United States it is clear that Trade Joe can use these to learn how to

approach UAE market. Both cultures have same level of drive and motivation of success, job

satisfaction, and providing for their families. However, the US is a meritocracy state where

individual accomplishments are more valued than group, while in UAE group work is more

valued. As such, an UAE individual will take into account how their actions affect others.

Having this in mind, Trade Joe executive must ensure their marketing strategy considers UAE

culture for the company to gain a market share in United Arab Emirates.

As west countries, United States have fundamental different with United Arab Emirates in shared

values and cultural practices when it comes to business and corporate culture. However,

American culture encourages communication that is more direct and open compared to the

United States. As such, Trade Joe will fit perfectly within UAE culture as there no much

difference with the US. Family relationships are one of the most noticeable variations between
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American and UAE culture. While the Arabs place a high value on families, the Americans place

a high value on individualism. Individual ideals are given less weight in Arabs society than

family values. Arabs hold family values in high regard. As such, it is important for Trade Joe to

utilize marketing strategy that focus on family as a marketing strategy.

5.0 Political Analysis

5.1 United Arab Emirates

Notwithstanding regional concerns over Iran, the UAE will be stable and prosperous from 2022

through 2026. The transition of power in Abu Dhabi from the current monarch, who is unwell, to

the crown prince is expected to be peaceful. In 2022, economic growth will pick up, boosted by

pro-business policies, looser oil output limitations, and a post-coronavirus rebound in services.

Diversification and a favorable business climate will be priority, but oil will continue to play a

vital role in the economy. United Arab Emirates has experienced political stability; however,

there is always risk of domestic unrest. United Arab Emirates has one of the highest foreign

direct investments in the world, with an FDI of $10.385 billion and is ranked number 27th in the

world. UAE-US relationship have positive attitude as it allows both countries to continue doing

business. In the United Arab Emirates, the "Corruption Perceptions Index" for the public sector

indicated 29 marks for 2020. The scale runs from 0 to 100, with the larger the amount, the more

corruption there is. The United Arab Emirates is ranked 21st as a result of this.
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6.0 Ranking of the Countries based on the Appeal

6.1 United Arab Emirates

United Arab Emirates is best fit for international expansion and it has an appeal for Trader Joe

expansion. The country rank is based in terms of political stability and culture that is most

related to the UAE.

7.0 Proposed International Approach

Trader Joe’s should use pricing strategy as market entering strategy. The strategy will help the

company to in large scale and reach more customers. As well, the company should utilize

functional organization strategy to employee people with skill sets that help the company achieve

its goals effectively. Also, the company should use global expansion strategy and use customized

marketing structure.
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8.0 References

Adams, H. G. (2020). Trader Joe’s: A Case Analysis of Trader Joe's Competitive Strategy.

Lutz, Ashley.(2018) “How Trader Joe's Sells Twice As Much As Whole Foods.” Business

Insider, Business Insider. Retrieved https://www.businessinsider.com/trader-joes-

salesstrategy-2014-10.

Steenkamp, J. B. E. (2018). Brands and retailers under attack from hard discounters.

In Handbook of Research on Retailing. Edward Elgar Publishing.

Trading economics. (2021). Economic indicators | List by country. TRADING ECONOMICS |

20 million INDICATORS FROM 196

COUNTRIES. https://tradingeconomics.com/countries

Watson IV, G. F., Weaven, S., Perkins, H., Sardana, D., & Palmatier, R. W. (2018). International

market entry strategies: Relational, digital, and hybrid approaches. Journal of

International Marketing, 26(1), 30-60.