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Strategic Direction of Trader Joe- Report

   

Added on  2020-02-24

8 Pages1653 Words49 Views
Running Head: STRATEGIC MANAGEMENT: 1STRATEGIC MANAGEMENTSTUDENT:INSTITUTION:DATE:

STRATEGIC MANAGEMENT: 2IntroductionTrader Joe’s is a leading supermarket in the United States of America. Various reports have ranked Trader Joe’s on top as a consumers’ favorite supermarket. In 2012, the company was ranked the 11th among the firms leading in creativity in the U.S.A. the operational locations are spread throughout the U.S with new branches opened in South Carolina, Kentucky, Lexington and Columbia. The industry has many firms creating a competitive market. Regardless of the competition levels, the company has been able to maintain a high profitability brought about by its market power[ CITATION Den17 \l 1033 ]. This report addresses the strategic direction of Trader Joe's touching profitability, business processes, industry analysis and the plans used to tackle competition. Industry analysisThe Porter 5 forcesi.Ease of entryThe market is open to new firms. Most companies coming into the industry are motivated by the success of Trader Joe’s. The success of foreign businesses is short lived, and the new stores haverecorded in billion U.S dollars and end up failing and finally leave the market. The market indicates that there is a great need for strategic positioning to succeed in the American market[ CITATION Loi17 \l 1033 ]. ii.Power of suppliersThe vendors sell their items through Trader Joe's with private labels. Most sales for the supermarket are generated by the non-private goods. There is a need to be supplied with all

STRATEGIC MANAGEMENT: 3necessary products so that customers will make all their shopping under one roof. The suppliers offer Trader Joe’s a dynamic product mix. The sale of seasonal items makes it necessary to introduce new products every time together with eliminating an equal number. The necessity created seasonally give products the highest demand for sale before the season gets over. iii.Power of buyersThe consumer market is vast and sophisticated. Traders Joe's customers primarily visit the stores to find new products. Most consumers aim at finding great bargains. The buyers are well educated creating an honorable population which is a market to supermarket's products because supermarkets are branded as honorable. Many buyers have comparatively low wages and show interest inclined toward products of low prices[ CITATION Ran15 \l 1033 ]. Another characteristic of the customers is their classical view. At some point, the share of supermarkets inthe grocery market declined because the customers are finding other sellers who offer their products at a lower price. The educated people are labeled as intelligent and inquisitive.iv.Availability of substitutesA variety of alternative products especially in the groceries section competes Trader Joe's. Consumer goods are easily available from the Amazon, Walmart, and other renowned retailers. The strategy of using small stores to avail products to customers. Many supermarkets deal in the sale of whole food products which are of high prices and rarely attract discounts. v.CompetitorsThe trending strategy of competitors is the move to operate small neighborhood stores[ CITATION Sar10 \l 1033 ]. Strategic competitors like the Walmart is a significant threat

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