Trader Joe's case Study
Trader Joe is a prime example of effective management. Started out as a small store in 1958, by Trader Joe, who further invested wisely in effective decision making process to expand the stores to approximately 414 stores well distributed in 400 locations across 37 states in the United States and District of Columbia, The main aim of this paper is to give a thorough discussion of the problems associated with Trader Joe operations, conducting strategic analysis by identifying the strategic issues and formulating alternative solutions to such problems (Hill, Charles, Schilling, Melissa & Jones, 2016).
Essentially, the huge influx of counterfeit products in the U.S markets has affected a lot Trader Joe's business operations
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since they lower the company's sales and have dire effects on the company's profit margins. Moreover, the emerging presence of strong retail giants such as Walmart stores, Safeway Inc. and Kroger Co. has intensified stiff competition for the company. They are much preferred due to their global presence, fair price-quality equation, extensive store networks and a wider array of merchandise. Furthermore, the dynamics in consumer preferences has affected the operations of Trader Joe Company in that it may be very challenging to add new products which meet the consumer's taste preferences as it is highly costly and involves a lot of considerable development.
The problem of retaining its network of suppliers who are willing to uphold a secretive business relationship with the organization by the provision of diverse and quality products labeled under the Trader Joe's private label is a huge challenge. Therefore, retention of such valuable resources and high level of competence through attraction and retention of active customers without a marketing and advertisement platform is very difficult.
Trader Joe's promotes an enabling working environment for their workers by giving out a precise comprehension of products dealt. A clear understanding of the products is practically done by tasting each and every product so as to smoothen the customer relationship in cases where questions about the product arise. Therefore, the employees can influence the customer's preference product by offering an extra educative segment about the product (Lewis,
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2005). Higher job satisfaction level among the employees is also triggered by ten percent discounts in combination to paid retirements, medical covers, and company paid vacations. Moreover, the creation of Trader Joe University creates an in-depth knowledge of the business operations. Therefore the criteria used to absorb management from within rather than seeking it from outside the company ensures the easier development of the employees through a quicker learning process while preparing them for the future leadership. The use of the four Emotional Intelligence competencies by the leaders to get a better understanding and management of their emotions and those of other people around is a good strategic issue.
These basically involve the social awareness, self-management, relationship management and self-awareness. Ideally, these issue is evoked through inspiration and motivation of workers by valuing their efforts to harness the skills and the strengths of each one involved in the organization.
Pragmatically, alternative solutions should be proposed and immediately implemented to restore the image of the company and ensure its flexibility in the dynamic market. The company should, therefore, consider an establishment of their own line of organic products since it specializes more in the natural products. Leaders should also strive to seek innovative ways to take advantage of the potential gaps. Moreover, a good marketing team should be created, and online social platforms should be effectively used in promotion of their products.
The establishment of an own line of organic products such as organic meat products in the building of a trustworthy brand admired by customers is very essential for the company to enhance its value and to control the price of their products at slightly higher rates than other products within the store. Consequently, it will boost to higher
sales. Moreover, the utilization of Twitter and Instagram as powerful marketing tools should be integrated within the Company. Instagram offer exclusive pictures of the diverse products within while Twitter is ideal in the description and visual appeal through video uploads of the products. The innovative ways identified should be able to challenge the existing mediocre processes. Customers should be highly rewarded and appreciated through offering incentives to the loyal customers and discount cards as well as giving out free sample products. I, therefore, recommend that a good marketing team with sharp social media skills should be trained and employed within the company. I think they will play a very key role in capturing new markets and therefore boosting sales. I also recommend for the customer reward schemes which will play a vital role in ensuring that customers are retained and also attract other customers. In conclusion, I think that courses should be introduced in Trader Joe's University to teach on the conservative ways of making purely organic products such as animal meat. They should also seek at coming up with the unique packaging of their products in a way that is easily identifiable to the customers and distinct to the other competing products. References Hill, Charles W. L., Schilling, Melissa A., & Jones, Gareth R. (2016). Strategic Management + Mindtap Management, 1 Term - 6 Months Access Card: Theory & Cases: an Integrated Approach. South-Western Lewis, L. (2005). The Trader Joe's adventure: Turning a unique approach to business into a retail and cultural phenomenon. Chicago: Dearborn Trade Pub.
Associated Wholesale Grocers (AWG) came into being more than eight decades ago when several independent retailers decided that the power of a cooperative far outweighed the influence of any one individual retail grocer. AWG provides distributor services to independent grocers in over 30 states with nine distribution centers throughout the South and Southeast regions of the country. In addition to their wholesale foods department, AWG offers a myriad of services from new store design, construction, marketing, product placement and “world class” logistical consultation (cite 11). AWG faces many of the same logistical challenges that other similar wholesalers face to include rising fuel costs, inclement weather, stringent timelines and an ever evolving need for stringent quality. One method to exploit a business’s positive and negative attributes is through the use of a Strength-Weakness-Opportunity-Threat analysis, or SWOT analysis (Cite 11). If used correctly, the analysis results can give insight into potential market areas of expansion and expose vulnerabilities to senior leadership so that they can be mitigated. AWG looks at its Supply Chain Management (SCM) as an integral part of its core business offering multiple services such as logistics to new co-op members. The team members of AWG are positioning themselves for sustainable success, now and in the future.
The primary problem would be the structure of the organization. This is due to the fact that there are thirteen departments in total which would lead to the failure of the ability to concentrate on long term viability of the business.
Secrecy is the mainly competitive advantage for Trader Joe’s. Trader Joe’s would never share the information of their suppliers as well as who is making to product to the competitors and customers. In this way, Trader Joe’s can keep their selling price less than other market.
Present day Federated consists of both Bloomingdale’s and Macy’s stores and operates in 34 states as well as Guam and Puerto Rico. While Bloomingdale’s and Macy’s provide both private and national brands and are similar in merchandising categories (men’s, women’s and children’s apparel, home décor, shoes, beauty, and accessories), they differ greatly in culture. Bloomingdale’s, being more upscale, targets consumers that are more concerned with trend and quality than they are price. Macy’s targets the more value oriented consumer and represents a broader Federated clientele. Macy’s represents 423 of the 459 Federated locations while Bloomingdale’s represents only 36 locations. Because I can better relate to the value conscious consumer of the Macy’s division and because they represent such a large portion of Federated, I will further explore their current characteristics and behaviors that suggest that they possess qualities of both monopolistic competition and oligopolies.
First, addressing perceived authenticity of social mission in a changing marketplace. In a book called The Omnivore’s Dilemma, Michael Pollan, criticized Whole Foods and business like it to task for contributing the rise of industrial organic farms. As Whole Foods purchased from natural foods farming giants and he accused the company of ignoring the local focused, sustainable values that it supposedly acclaimed. Second, focus on suitable acquisition candidates to continue upwards growth trend. As it was said earlier that its strategy to increase its competitive market by acquiring Wild Oats, it faced a challenge from FTC (Federal Trade Commission) who was trying to stop the acquisition, fearful of the organic supermarket industry being monopolized by Whole Foods. Despite its challenges, I think it is possible in scale and profits and stay true to a social mission. According to Mackey, he saw a synergy from this tension and he called it “conscious capitalism” where this system as based on the pursuit of a deeper purpose beyond making profits. The best way to maximize profits is to not make them a primary goal of a business and I believe that the most successful businesses is to put customer
Companies all over the world varies but yet shares a common challenge, that is to solve problem not only effectively and efficiently but also creatively. The P-O-L-C framework which stands for Planning, Organising, Leading and Controlling plays a major role in both the company’s survivability and success. The SWOT analysis looks at both internal and external factors that can affect the Starbucks’s performance. The purpose of this report is to define and analyse how Starbucks respond and should have respond to the change of its external environment on the cofee market,This report will also identify and disscuss how The P-O-L-C framework and can help starbucks to compete and reduce the loss of their failing peformance in the Australian market and how SWOT analysis helps to define some externalities that can be a threat to Starbucks.
In 1945, Sam Walton opened his first variety store and in 1962, he opened his first Wal-Mart Discount City in Rogers, Arkansas. Now, Wal-Mart is expected to exceed “$200 billion a year in sales by 2002 (with current figures of) more than 100 million shoppers a week…(and as of 1999) it became the first (private-sector) company in the world to have more than one million employees.” Why? One reason is that Wal-Mart has continued “to lead the way in adopting cutting-edge technology to track how people shop, and to buy and deliver goods more efficiently and cheaply than any other rival.” Many examples exist throughout Wal-Mart’s history including its use of networks, satellite communication, UPC/barcode adoption and more. Much of the technology that was utilized helped Sam Walton more efficiently track what he originally noted on yellow legal pads. From the very beginning, he wanted to know what the customers purchased, what inventory was selling and what stock was not selling. Wal-Mart now “tracks on an almost instantaneous basis the ordering, shipment, and delivery of literally every item it sells, and that it requires its suppliers to hook into the system, enabling it to track most goods every step of the way from the time they’re made and packaged in the factories to when they’re carried out store doors by shoppers.” “Wal-Mart operates the world’s most powerful corporate computing system, with a capacity (as of late 1999) of more than 100 terabytes of data (A terabyte is 1,000 gigabytes, or roughly the equivalent of 250 million pages of text.).
The purpose of this memo is to show the affects of how Albertson’s is trying to implement many strategies in order to try, and compete with its powerhouse competitor Wal-Mart. This memo will contain information on steps Albertson’s is taking to gain back some of the market share that Wal-Mart has swallowed up. It will also describe Albertson’s planned innovations that will be what determines their success. Lastly it will discuss how through IT as well as a successful implementation of satisfying consumers demands, will possibly allow them to compete with the ever so powerful Wal-Mart.
The competitive pressures that Oliver’s Market must be prepared to deal with are the pressure associated with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry and the pressure associated with the threat of new entrants into the market. They must be prepared to face with the rival stores, Trader Joe’s, Costco, and Whole Foods who had recently entered in the sales territory with brand new stores and so far Wal-Mart and Target also had announced plans to develop regional supercenter, that is, large –format discount center into their territory.
Some core competencies that must be exploited are: Brand Kmart is an existing well-known and trusted national brand in USA Kmart has private label and designer clothing that is well endorsed Infrastructure Kmart has a large number of well-located, low-cost, leased stores in urban far away from competitors through out the country ( Appendix B ). Staffing Confidence by the market in Kmart is created by the achievements of its staff and management. With the turn-around strategy in place, new blood has been put into the top management structures. In any renewal there will be retrenchment as unprofitable stores are closed. This can be used as an opportunity to retain and move high performing staff to where they are needed and to get rid of non-performing staff. Anderson the chairperson of Kmart is well supported by Wall Street and the board of Directors. These new staff members enter the company with needed skills to address problems in certain areas that previously were poorly managed such as inventory control and merchandising. Store locations, layout and Performance Stores conveniently located away from competitors like Wal-mart and Target therefore less to compete for customers face-to-face. There are 250 non-performing stores who have already been identified as being more cost effective to close than continue with running costs. Expertise exists in-house for the planning of store layout and appearance to meet different customer segments. This concentration of effort will enable focus on key areas Technology Kmart has already invested in good retailing systems. The system can be use to control inventory, supplier payments, track customer buying and monitor income versus profit margins across all stores. Research and Development The planning department is well established and in cross-functional to provide various perspective. The planning department to ensure that strategies at all levels are executed can further use the access to past data and knowledge of changes in buying patterns. Financial Backing JP Morgan Chase has agreed to support Kmart to avert the current threat of closure due to bankruptcy.
A strong upward and downward communication chain underscores the management and organizational style adopted by Trader Joe's. This means fostering a belief that the store group operates as a team and that individual opinions are valued, rather than an environment where people speak out and are either not heard or have their opinions suppressed (Workforce, 2005). (Schermerhorn, 2012) The company applies its pursuit of value to every facet of its operations” (p.W-99).
Being the leader in its industry, the company has capitalized on the large market capital and is opening up to foreign countries where organic food is appreciated.
...nal supermarket retailers will reinvent themselves over a period of time, in order to attract and maintain a loyal customer base. New concepts, neighborhood marketing, and innovation will be the key to success over the next decade.” (Imlay, 2006) What is propose is that a smart mix of products, perhaps catering to demographic tastes and needs, may tempt the shopper not drive out to the big box store, but instead loyal to their local market.
Lack of brand awareness. Our company has a strong image in other countries. But as we introduce our product into our new market where we may not have competitors with similar products, we may have competition with a variety of related products. We will address this issue with heavy and aggressive promotion emphasizing in our products’ nutrition facts.
The word “organic” refers to the way farmers grow and process their products to follow specific standards regulated by the United States Department of Agriculture (USDA). The purpose of organic farming is to restrain the amount of synthetic chemicals used to fertilize foods (although certain approved pesticides may be used) and reduce environmental pollution by relying on sustainable techniques to enhance the natural features of a farm. Although the research available does not provide enough evidence on their nutrient composition, to remark there is an advantage for a better health, the demand for organically grown food is increasing, and organic farming is revolutionizing the food industry in today’s society. Consumers who buy organic food