Trader Joe's Competitive Advantage

This assignment examines Trader Joe's competitive advantage in the grocery market. It analyzes their strengths, such as unique product offerings and strong brand loyalty, while identifying potential threats like technological advancements and increasing competition. The discussion also explores strategies Trader Joe can employ to counter these threats and maintain its competitive edge.

Strategic Management 1
STRATEGIC MANAGEMENT
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Strategic Management 2
Strategy Management
Question 1:
SOLUTION
Strategy is defined as set of goals and other major goals that a company sets to increase its
performance (Rao, et.al 2008). It is launched to competitive environment over other business and
this is defined by profit margins of the company compared to others. A company’s profit growth
is measured by the amount of profit made within time.
The purposes of strategy making is achieved by considering the following essential elements
which include; setting direction which involves defining goals which have motivating factors,
concentrating on all resources required in the set direction to achieve full results, maintaining the
same focus and concentrating on one direction.
There are different types of strategies that a company who wants to invest internationally can
consider, they include global strategies whereby global firms sell same products using the same
brands to achieve economies of scale, and this applies especially when dealing with electronics
products. The other type of strategy is the multi-domestic which focuses on local needs within its
markets other than investing all globally (Enz 2010).
For a company to sustain its competitive advantage, it should strategize well so as to be able to
maintain high profits for a long time and to achieve that they should understand how different
strategies can create activities that can make a company unique
For the company to invest in the United States it has to look into consideration the business
model and how to increase its competitive advantage in the market. Supermarket industry has

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really grown in States because its country’s economy, but despite the revenue growth, the
industry operators have faced competition from alternative retailers offering the same brands of
good s and services as in the supermarkets. This has affected the number of customers going to
the supermarkets because merchandisers sell the goods to them at a lower price.
Consumers have also moved to the small and fresh format stores to purchase their goods hence
making the supermarkets growth to go down, therefore when a company needs to invest in such
market it consider the targets in the market and what they offer and their pricing.
The location of the company also has an effect on its growth in a given market, supermarkets
should be located where there are a high number of residents, and therefore retailers decide to
locate their shops in cities. Location is also determined by the shopping preference of in the
different regions of the United States.
Proximity to the key market, availability of labor and ability to control stock are also factors to
consider in investing in the supermarket.
Future recommendations
With current situation in the US, the company should be well analyzed to achieve a good
recommendation, the characteristics of a company influences the decisions to be made. The
company should invest well in the products they are offering so that they can attract more
customers and counter the competition from the other retailers.
Companies should develop local networks and when expanding so as to remain competitive in a
given market this is because with networking, they are able to interact well to improve the level
of business in different countries.

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Question 2.
SOLUTION
A business model involves the conception of how strategies should work together to enable the
company achieve high profits (Chesbrough 2010). This model describes how a company will
select its customers in the market to invest in, state which products and service to offer, how to
value the customers, how to get customers in the market and be able to maintain them, how the
company will produce goods and services.
Business model also helps a company on how to increase their production and lower its costs,
ways of delivering the goods to the market, have good organization of activities within the
company, how to achieve high profitability and growth of business over time.
Supermarkets make money by buying in bulk and in consolidated manner and selling them at a
higher price. Foods and other perishable goods should not be highly stocked because they expire
early and can lead to wastes (Ruhlman 2017).
For a business to do well despite the competition, the management should invest well on its
products so that they offer high quality products hence attract customers, the target group in the
market is also important because it determines what goods and services are required. By
delivering the goods to the market leads to success because the company will be supplying door-
to door unlike the traditional groceries where customers goes on their own to buy at the grocery.
Deviations are production changes which are different from that of customer specifications; this
change determines the quality of a product. If there should any deviation, the manufacturer
should take note and consult the consumer, hence reducing costs and achieving the correct

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quality. When a company takes this into consideration and involve a consumer in the decision
making of the effects of deviations, it earns trust from the customer and there will be increased
number of customers who are brought in by either the existing customers or those who have been
attracted by the firm’s quality products and services.
Question 3.
SOLUTION
Competitive positioning involves how a company differentiates and creates value to the market.
Trader Joe is differentiated in the market because in US consumers are attracted to organic and
fresh foods and therefore by delivering the products to a market readily available makes it
unique. A good positioning is brought by market profile which includes the size of the market,
available competitors and the growth of the company, the Strengths, weaknesses, opportunities
and threats of the market, customer segments (Noe, et.al 2003).
When a company differentiates, the market will get a clear picture of it and will get attracted.
This can be done through product leadership, customer relationship and operational excellence.
Trader Joe’s supermarket should ensure provision of quality products at an affordable price,
excellent performance of the business and also maintain customer relations at the same time
welcoming new potential customers.
Another factor that a company should consider to maintain competitive advantage is
competition, it should lay foundation well and be ready for competition, and this is achieved by
building a good strategy (Porter 2008).

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Question 4.
SOLUTION
Growth of markets is increasing on daily basis and the companies in the same markets should be
on look out not to be by-passed by other competitors. Global investing, technology improvement
and new innovations in the market causes intense competition among companies, therefore
companies should always have strong strategies so that they cannot face high competition.
This advantage over competitors faces high risk and some of the leading factors which might
cause loss are the changes in technology and new innovations in the market. Other factors
include change in customer preference where companies begin to ignore their customers,
challenges from competitors whereby they introduce new products to attract attention of
customers and the changes in the organizational structure (Asefeso 2012). Trader Joe can lose
competitive advantage because of the changes in the technology and also high competition in the
US market (Hill & Jones 2012).
The danger of losing competitive advantage for trader Joe is competition from other traders,
when they introduce new products to the market.
For a company to counter the problem of loss of competitive advantage, there are ways which
help them to regain back what is lost and they include; changes in prices which will help in
attracting customers who might have been taken by competitors, this strategy in as much as it
improves the market share, it is costly and reduces profit margin.

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A company can also do promotion in order to regain its performance; this involves advertising or
improving the brand of the company. This strategy is also costly and it requires large companies.
Another way which a company can regain its vibrancy in the market is by offering new products
which is highly differentiated from other competitors.

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Reference List
Asefeso, A 2012, Outsourcing: the competitive advantage. Lexington, KY, [publisher not
identified].
Chesbrough, H 2010, Business model innovation: opportunities and barriers. Long range
planning, 43(2), pp.354-363
Enz, CA 2010, Hospitality strategic management: concepts and cases. Hoboken, N.J., John
Wiley & Sons.
Gitman, LJ & McDaniel, CD 2008, The future of business: the essentials. Mason, OH, Thomson
South-Western.
Hill, CWL & Jones, GR 2012, Strategic Management. Cengage Learning.
Noe, RA Hollenbeck, JR Gerhart, B and Wright, PM 2003, Gaining a competitive advantage.
Irwin: McGraw-Hill.
Rao, CA Rao, BP & Sivaramakrishna, K 2008, Strategic management and business policy: texts
and cases. New Delhi, India, Excel.
Ruhlman, M 2017, Grocery: the buying and selling of food in America.
Porter, ME 2008, Competitive advantage: Creating and sustaining superior performance. Simon
and Schuster.
Stevenson, WJ and Hojati, M 2007, Operations management (Vol. 8). Boston:
McGraw-Hill/Irwin.