The case study of Trade Joe’s

Introduction

There are several huge retailers in America, and Trader Joe’s is one of them. It has been in that business for a while. Trader Joe delivered to the end customers with products that were discretely labeled, and the customers were delighted with this (Trader Joe’s case study, 2008). This was the strategy utilized by Trader Joe to appeal to its clients. The massive retail chain views creating interest in the products as a key selling point. Additionally, there was an agreement between the business and the suppliers that their identities would stay a secret. About 80 percent of the goods which are stored by Trader Joe’s are products which are labeled discretely and when they are being sold, they use Trader Joe’s brand name. Maintaining the legitimacy of the goods they were selling in the marketplace was important to them and so the company opted for this strategic business. Aside from that reason, the company was also interested in monopolizing the cost price of the products supplied to Trader Joe’s thus partnering with an anonymous supplier(“What is Trader Joe’s Strategy?”, 2017).

Information Leaks

Even though the company has its own strategy that will make them advance, there are a number of things that hinder their progress and the major one is information leaks. The core principle of the organization is to remain discrete with their suppliers and practices that hinder this taint the personalized image of Trader Joe’s. This is because, once information leaks, it leads to trust issues between the company and its suppliers since they had agreed on anonymity thus the relationship is affected negatively. This may lead to the suppliers terminating any further contractual engagements with Trader Joe’s.

In the recent past, there were rumors that revealed that branded yogurt that was being sold by Trader Joe’s was distributed by a farm called Stonyfield. On the other hand, there were also allegations that the Pita Chips that were being vented at Trader Joe were being furnished by Frito Lay. These allegations were not confirmed and there is a likelihood that they might have been flimsy allegations that have are meant to tarnish the reputation of the store. In case these reports turn out to be authentic, it can cause the clients to believe that there is no uniqueness in the goods being vented at Trader Joe’s thus it is not necessary to incur more expenses whereas similar commodities can easily be acquired at lesser fees at another organization. Additionally, the same allegations can diminish the competitive advantage that Trader Joe’s has possessed over its competitors in the market.

Second Issue

The second problem that Trader Joe’s is encountering is the quickness of their expansion into new states. The possible outcome of this is that their unique appeal will fade away. This is because Trader Joe’s has always maintained their significant competencies at every moment of their history of the organization thus leading to a perception of being a market that is particular to a specific neighborhood. Their services are considered unique and not many societies are able to have access to such service. Every store is coordinated a bit more different with regards to the preferment of the store manager. Even though this is true, the continuous enlargement of the organization can cause the consumer’s perspective to degenerate. This enlargement of the organization can cause lack of uniqueness for every store and can cause an increase in bureaucracy and standardization throughout the organization.

The first thing to occur is that Trader Joe’s could lose its particularity if there is a continuous opening of stores throughout the nation. It is a fact that the uniqueness of this organization is among its strongholds since it generates an increase in desire by clients (“Forbes Welcome”, 2011). In case Trader Joe’s happened to be commoditized with various locations like Wal-Mart or any other main grocery retailers, the company would vulnerable to losing more of its brand image and the customer loyalty would diminish thus causing them to shop less in their premises. The chief executives of Trader Joe’s have gone out of their way to be cautious advancing the brand to locations which are more geographic and they opt to pursue their goal of looking for the target market of intellectual, civilized, speculative people and take up residence around them (“Trader Joe’s Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies”, 2012).

The second thing that may occur once the expansion takes place is that there will be an increment in bureaucracy and standardization throughout the organization. The enterprise flourishes due to the way they advocate for creativity among its workers. This is particular evidence when you look at the stores since every store is allowed to arrange the goods in whichever manner they find suitable and every store has certain exclusive signs that were designed by the employees.

The level of trust that Trader Joe’s shows to it workers is exceptional and this also allows have freedom when they are engaging with the customers and the manner in which they conduct themselves in the workplace. This situation of exercising their freedom and utilizing their freedom may be hindered once an expansion takes place. Furthermore, the level of bureaucracy will definitely increase once the organization enlarges since it becomes more challenging for the executives put up measures that will enable them to maintain the bearing of the business with that kind of loose grip on every store.

Third Issue

A shortfall of social media presence is a noticeable problem that the Trader Joe’s faces. In the beginning, the enterprise made use of a customer newsletter and continuous radio ads so that they can create awareness for their brand. Instead of updating their means of advertising upon the induction and pervasiveness of social media, Trader Joe’s decides to stick to their initial methods. It is true to lament that various brands these days are striving to have a competitive advantage over their competitors via the usage of social media marketing yet Trader Joe’s cannot be considered to be part of this battle. Since social media is growing exponentially, the unavailable social media presence of Trader Joe’s could bring drastic results in the future.

In addition, people in the United States are deeply engrossed in and influenced by social media thus the usage of social media as a method of making your brand has grown to be a cutthroat market. Once social media used in the correct way, it can give an organization the boost that it needs to reach out to more clients. On the other hand, Trader Joe’s has decided to be rigid when it comes to updating its modes of marketing and sticking to consistently using radio ads and newsletter thus they are not able to explore the market in social media. Because of this approach in the market, various marketing experts believe that the non-usage of social media is a glaring blind spot for Trader Joe’s.

Once someone accesses social media, they find consumers praising their services but Trader Joe’s is not able to take part in the conversation. It is clearly evident that Trader Joe’s prefer to maintain the secrecy of their operations, for example, they do not release their financial numbers and possessing a website which very vague. This trend of not taking part in social media and being discreet has continued for a while. This is not advisable because we are in a digital era. This era has brought about an increase in the digital market and for an organization stays informed with this digital age, they have participated in social media so that they interact with clients. In this case, Trader Joe’s is appreciated by numerous consumers throughout the United States and so participating social media will assist them immeasurably when it comes to informing and captivating customers.

Recommendation

I suggest that Trader Joe’s should participate in social media by starting a Facebook page or twitter account. The reason for doing this is that marketing via social media will inevitably be essence in the not too distant future and Trader Joe’s should not allow themselves to be excluded from repeating the benefits of these developments. Trader Joe’s has a quirky brand and its consumers are often using social media, therefore they have two key motives as to why they should utilize social media. First, since the formation of the organization, Trader Joe’s has been able to prosper by utilizing its quirky, exclusive brand image. Currently, they are doing a couple activities that make them stand out from conventional supermarkets, for example, miniature store with minimal SKU’s; aisles which slightly bent to the left in lieu of being vertical to the store entrance; 80 percent of the commodities are labeled privately; workers put on shirts which are made in Hawaii (“10 Secrets to Trader Joe’s Success”, 2010). Every one of these quirks shows that social media is a suitable market for Trader Joe’s. This actually implies that they can employ an individual to take charge of one or more of their social media channels thus utilizing their sense of humor and creativity to market the brand. Evidently, this level of quirkiness would bring results since it incorporates social media and it consists of succinct, witty, unforgettable blurbs that show an individual’s or firm’s emotions.

Secondly, since their supporters and clients make use social media, Trader Joe’s are also mandated to make use of it. A lot of the consumers have started Twitter accounts, Facebook pages, and YouTube channels so that they share insights about Trader Joe’s. Moreover, clients visit a Trader Joe’s store and afterward go searching for Trader Joe’s on Twitter to speak about the fantastic commodities they have discovered in the store but they are not able to speak directly to Trader Joe’s since they have not opened a Twitter account. This clearly shows that Trader Joe’s is underutilizing their potential since they are not active on social media which can give them the chance to tap into the digital market and expose themselves through interacting with customers. Therefore, I suggest that Trader Joe’s opens a Twitter account so that they can post witty comments about their brand and Facebook page which will allow the clients to discover more details about any grocery retailer.

Pestel Analysis

When one analyses the case, one will discover that economic conditions relating to the grocery market are not specified but because it occurs in 2011 in the outcome of the economic recession of 2008, I would assume that purchasers spend less than they did before the economic recession. Many of the purchasers know discount grocery retailers as a result of the economic recession. The health and organic food market is one of the socio-cultural elements that have played a part in changing the grocery market. This is because it is clearly evident that a lot of consumers are searching for and purchasing more organic and health foods unlike the previous periods thus this bearing is enabling premium grocers like Whole Foods to obtain a substantial share of the market. In 2011, the Whole Foods were able to accomplish 8.4 percent similar store sales expansion. This means that a lot the customers are making fewer purchases of foods which they consider unhealthy like having a lot of fats and acquiring foods which good for their health from the grocery stores.

The case does account for technological factors but Trader Joe’s is known for not being keen on technological matters in their stores. This is true because in their premises there no self-checkout lines that customers can utilize nor do they offer television screens when someone is at the registers. The reason why do not have the screens is because they want to set up a friendly atmosphere between the workers and customers. On the hand, their fellow retailers proffer these features alongside others.

When it comes to the grocery market, environmental factors have a moderate effect on this market. Because a lot of the beverage and food commodities are produced from natural elements, on some occasions unfavorable weather conditions can ruin supply. However, the only way weather can aggravate grocery retailers is when it is significant since a little disturbance in the climate will just impel retailers to look for new suppliers for their goods. In addition, weather may also alter the capability of shipment in the food industry since numerous goods ought to be transported across the ocean or cover substantial long distances over land so that they can get to their intended destination.

The grocery market can be influenced by a few legal and regulatory elements. Some of the key elements are FDA regulations and import/export regulations. Import and expect laws usually have an impact in the grocery market since numerous food and beverage commodities are exterior services and are being mass-produced away from the United States and are imported into the nation. If nations interfere with the selling of a couple of food products via governmental regulations, this could bring about a varying effect on the grocery market in U.S.

SWOT Analysis

The factors that give Trader Joe’s a competitive advantage include a powerful brand image, a fanatic fan base and the consistent introduction of products in their stores. Every organization requires something that sets them apart from the crowd and Trader Joe’s has its powerful brand name to show for this, for example, the layout of the store. Trader’s Joe has fans who are fanatics and they go to the extent of writing letters requesting them to open stores around their region. The consistent introduction of products in their stores is essential because it entices clients to come back and shop for new products.

References

10 Secrets to Trader Joe’s Success. (2010). Cbsnews.com. Retrieved 2 April 2017, from http://www.cbsnews.com/news/10-secrets-to-trader-joes-success/

Forbes Welcome. (2011). Forbes.com. Retrieved 2 April 2017, from https://www.forbes.com/sites/glennllopis/2011/09/05/why-trader-joes-stands-out-from-all-the-rest-in-the-grocery-business/#aab9eb94dec7

Trader Joe’s Solution and Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies. (2012). Thecasesolutions.com. Retrieved 2 April 2017, from https://www.thecasesolutions.com/trader-joes-2-37898

Trader Joe’s case study. (2008) (1st ed.). London.

What is Trader Joe’s Strategy?. (2017). OnStrategy. Retrieved 2 April 2017, from https://onstrategyhq.com/resources/what-is-trader-joes-strategy/