Draft Trader Joe's Write-up

Overview :

Trader Joe's is a unique private network of grocery stores founded in 1967 by Joe
Coulombe in Monrovia, California. This store aimed to cater to Pasadena's upscale and
well-educated customers. According to a July 2013 research survey, roughly 6000 individuals
chose Trader Joe's as their favorite spot to buy groceries (Ageri, Roberto, 1). According to 2012
data, Trader Joe's is the 11th most creative company in the United States. The majority of the
time, this is a good thing. CEO Coulombe provided a diverse selection of California's most
superb wines to please the state's discerning audience. In 1979, the German-based food firm Aldi
North purchased the famous California store. After the purchase, Aldi North offered Privately
branded items to consumers. In 1988, CEO Coulombe was ousted by the new employee John
Fields. Trader Joe's expanded to several states under the direction of John Fields, including
Boston, Massachusetts, California North, Arizona, and select sites in New Jersey. The store's
expansion across the United States enhanced Trader Joe's revenues, which continued to expand.
According to Glassdoor.com and Forbes polls, Trader Joe's has been one of the top 50 businesses
to work for since July 2013. SWOT Analysis, VRIN Analysis, and Porter's five factors are
described in the following paragraphs to learn about and analyze the strategies that Trader Joe's
is using.

SWOT Analysis :

Strengths

● Budget-friendly with no rebates offered. The company's chief executive officer has
announced daily discounts.
● Changes in consumer attitudes toward healthy eating
● Unusual foods - offers a wide variety of products not seen in conventional grocery stores.
● A reputable name in the market, having been there for more than half a century.
● Each month/week brings 15 new items, expanding customer choice.

Weaknesses

● Intense rivalry - Competitors like Whole Foods have a strong presence in the market
because they provide a similar image in that they sell natural organic items and offer
several store brand alternatives.
● Small variety - Compared to larger shops, which may stock up to 50,000 products, these
only hold 4000.

Opportunities

● Increase the number of products available under their private label since that accounts for
80% of their revenues.
● Discover new markets that Whole Foods has yet to consider.
 ● Improve technology and provide them the ability to cut down on wait times (I wonder
whether this is still a problem.)

Threats

● The rise in bureaucracy has increased employee competitiveness.

● Healthy competition - Whole foods, Walmart, and other rising businesses.
● Replacement products
● Insufficient technology

VRIN Analysis :

Equipped with or Valuable Rare Impossible or Substituteless Consequences for

able to provide Very Expensive Competition
to Reproduce

Unique Brand YES YES NO YES Competitive advantage

in the marketplace
gains/ returns that are
above average

Affordable YES NO NO NO Competitive

Options (Trader gains/returns that are
Joe’s mostly average
Manufacture)

Access to Alcohol YES NO YES NO Somewhat Competitive

Food Sampling YES NO NO NO Above average

gains/returns
 Trader Joe's is well known for its exclusive brands, exclusively available at its locations.
Because no other business may sell their wares, they are both precious and scarce. This method
can be imitated and replicated by other companies, albeit at a high expense. Trader Joe's has a
competitive edge and above-average returns due to the sale of their brands. Moving on to their
affordable choices, emphasizing Trader Joe's production increases their market value and
competitiveness. Trader Joe's has a modest edge over its rivals because of this characteristic,
even though it is joint and other businesses may duplicate its products. Like many other
businesses, Trader Joe's sells alcohol. Several items are available, including Trader Joe's products
and other well-known alcohol brands. In New Jersey, alcohol sales are prohibited at major
retailers such as Walmart and Target, but this is not true in other states. Like Costco and BJ's,
Trader Joe's offers food samples around the store. This characteristic makes them lucrative but
not as uncommon since other firms are doing the same thing, and it is easy to duplicate. Other
alternatives to food tasting exist, but Trader Joe's results remain above average.

Trader Joe’s Five Forces Analysis :

The Threat of New Entrants : In the case of Trader Joe's, the threat posed by new entrants is
low to moderate. As a result of the industry's significant earnings, several new entrants will
attempt to enter the market, despite the industry's prohibitive cost and capital needs. It would not
be easy to locate a decent quality food or health-based provider at a reduced price, but it would
also take new entrants a long time to create a strong brand like Trader Joe's. In addition, the
danger posed by new entrants is modest since Trader Joe's uses absolute cost advantages in most
facets of its company operations.

Bargaining Power of Buyers : The buying power at Trader Joe's is moderate to high. Customers
have a large selection of food to pick from and a great deal of control over pricing and product
quality. Generally, consumers want the most valuable goods at the lowest price, which will
pressure Trader Joe's long-term profitability.

Bargaining Power of Suppliers : The buying power of Traders Joe's is relatively low. They
have their suppliers, which are non-disclosure and make it invisible to customers if their supply
changes. Trader Joe's did not identify their suppliers or manufacturers, so it would have more
options than its rivals.

Threat of Substitute : In this case, the threat of substitution is medium to high since customers
have several food options and retail locations. Even when another supermarket is gaining market
share and identical items are available elsewhere, the only advantage they have is that they have
their own branded product.

Degree of Rivalry : As Whole Foods, Kroger, Safeway, and Supervalu are among the market's
expanding rivals, Trader Joe's faces moderate to high competition. Several are expanding
year-over-year with less product variety, which might boost competition. But, just as Trader Joe's
has a significant amount of money and economies of scale, so do its rivals.

Recommendations :
 ● Alter shop styles: In this case, Trader Joe's stores are compact yet straightforward for
consumers to navigate. Yet, keeping the shelves and storefronts small does not help the
product amount or variety. As a result, Trader Joe's should expand its shelf space to
accommodate additional product alternatives.
● Boost social media presence: According to the CEO, it is crucial that you provide the
correct items at a fair price. Indeed, competition is using social media to attract new
clients. In the digital world, you must maintain pace or risk falling behind inventive
competitors.

Conclusion : Trader Joe's is among the largest stores in the United States in terms of exceptional
customer service and distinctive product quality and brand. Still, I suggest that Trader Joe's boost
its presence on social media platforms like Facebook and Instagram. They should also lengthen
the shop and expand the size of the shelves so that they could offer more items in one location.