The Grocery And Supermarket Industry

3488 Words Feb 18th, 2015 14 Pages
Executive Summary The grocery and supermarket industry is a highly competitive and congested industry. In the face of serious obstacles, Trader Joe’s has managed to separate itself from its closest competitors within the industry. This case study aims to explain how Trader Joes has created its competitive advantage as well to examine the company’s future prospects. We will do this through analysis of four key factors related to the success of the company; Trader Joe’s external environment, the generic strategies used by TJ’s and its competitors, sources of the company’s competitive advantages, and TJ’s strategies going forward. Analysis of the external environment suggests a fierce rivalry between Trader Joe’s and its competitors. This rivalry is brought on by the high bargaining power of buyers and high threat of new entrants into the market, both of which put pressure on companies to maintain low prices and provide high-quality products. Grocery provider strategies weigh heavily on Trader Joe’s ability to maintain a strong cost margin as most members of the industry struggle to capture enough gross profit to survive. Trader Joe’s has managed to distance itself the majority of its competitors, who are forced to sell bargain products, by establishing itself as a differentiation-focused competitor. Trader Joe’s value chain is unique for its industry. TJ’s defies the industry standards of buying supplies from middlemen, offering coupons,…
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