Trader Joe’s Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

QUESTION:1

SUITABLE GENERIC STRATEGY THAT THE TRADER JOE SHOULD PURSUE:

TRADER JOE’s GOAL:

The goal of Trader Joe is to continually expand its business and provide a unique set of shopping or purchasing experience to their customers in a steady and relaxed environment. In their early years, they were thinking about the kind of product they should use in their stores. Later on, they offered one-of-a-kind private label products at great prices.

PRODUCTS:

Like most of the chain of stores such as Walmart, Kroger, Safeway & Publix, etc. Trader Joe doesn’t include much in its store products that are of famous brands, and which are freely available to every big store.

Trader Joe’s stores 80% merchandise consists of private label product and 20% are others, which include several brands. This means that their aim is to create their own brand name in the market and provide satisfaction to their customers with these unique products. The private labels of products include several names starting with affix “Trader”Ming, Jose, Giotto and their famous private label wine affixed with the name “Two Chuck Buck”. Varieties include food and non-food items.

TARGET CUSTOMERS:

Trader Joe’s target customers are mostly those, who are well educated and want to purchase different types of products. Their aim is to provide those products to their well-educated and sophisticated customers who are not typically available at the Supermarkets (such as whole-bean coffee, sprouted bread, and black rice. According to their study almost 80% percent of the populated are educated and went to college.

PRICING STRATEGY:

Their aim is to provide their customers with lower cost products while maintaining the quality of the products. They have adopted any special pricing strategy which the others would like and also currently adopting those strategies. These special strategies are offering the products with discount, special promotions, weekly sales promotion offers, etc.

They have realized this situation and wanted to get clear from their pricing strategy towards their customers that they are offering “everyday low-pricing”.

SUBSTITUTES:

Since their start, many players have tried to copy their business model and want to service their customers in the exact way as Trader Joe did, but they failed to adopt such a model, in fact they were forced to exit from that market in the past, like Wal-Mart exit from Germany in 2006. Despite of the increasing competition, they have maintained their reputation. Their business model is rare and difficult as well as costly to imitate.

RECOMMENDATION:

The product that Trader Joe is offering is unique and has their private labeled brand. Its reputation is high and despite of facing immense competition, its earnings are stable & increasing. Its target customers are mostly educated people. It provides low cost and high quality products. The most suitable “Generic Strategy is the differentiation strategy”.

QUESTION NO: 2

HOW DO FIRMS IN THE SUPER MARKETS INDUSTRY MAKE MONEY?

Today’s world is very fast moving. The customers value their time as the most important factor. They want to save their time in every aspect of life like in a job through the use of computers, saving time in the hesitating paper work, fast travel through trains and cars, purchasing goods from the stores that possess all kinds of accessories like pharmacy products, food & beverages, gifts, clothes and various costumes and many more.

Trader Joe’s Case Solution

The Supermarkets are the one, which can fulfill these sophisticated customers’ needs and save their time by providing the above mention accessories on the one single platform. The first factor that helps them in earning substantial great revenue from the normal store is that they provide a wide variety of products.

In addition to this wide variety they also provide extensive discounts on the bulk purchase and even on the single product sometimes. This enables them to provide cheaper products than the other stores, while maintaining the quality.

They manage a good relation with their suppliers by providing them top shelf spaces with no extra fees or sometimes charge a little fee. The cheap and quality factor attracts huge customers and increases their sales, which enables them to pay their suppliers promptly. These factors enable them to manage their suppliers and also bargain with them on acceptable terms

They do extensive research on the changing patterns of the customers and accordingly update their product line-up with the changing taste of the customer.....................