Trader Joe's Case Analysis

Trader Joe’s is a major food retailer who has developed quite the name for themselves. It has well over 350 stores in over 32 states and is expected to continually grow over the next few years (Bond, 2012). For over 50 years, Trader Joe’s has been providing quality customer services, products and a unique shopping experience for its customers. They have come a very long way from when they first officially opened their doors. Trader Joe’s started when its founder Joe Coulombe wanted to find a way to differentiate his 7-Eleven stores (Schermerhorn, Osborn, Uhl-Bien & Hunt, 2012). In the food retailer industry, Trader Joe’s has developed a process that works well and

Also, while Trader Joe 's is not a health food chain, it still supplies a large amount of organic options in its stores which sells in the billions (Smyszkowski, 2012).

The threat that substitute products pose to an industry's profitability depends on the relative price-to-performance ratios of the different types of products or services to which customers can turn to satisfy the same basic need. The threat of

Trader Joe’s chief executives have been careful in their expanding of the brand to more geographic locations, and they must continue to seek out their target market of “intelligent, educated, inquisitive individuals” and settle around them.

Trader Joe’s promotes healthy and unique organic products at affordable prices. Most products on the shelves are their own brand and come from vendors all over the world, unlike other grocery

Factors that can limit the threat of new entrants are known as barriers to entry. In this case barriers to entry are low because: there is no government intervention to prevent businesses from entering the industry, resources are abundant, and customers’ switching costs are low as well as fixed costs to start this type of business.

In some industries, there are no substitutes and there is no competition. In a market that has only one or few suppliers of a good or service, the producer can control price, meaning that a consumer does not have choice, cannot maximize his or her total utility and

Further reactions from competitors could be to provide cheaper alternatives that may appear similar to the offering provided by the Vigor brand. The result of this could be possible price wars to obtain market

Joe Coulombe started Trader Joe’s in 1967. Traded Joe’s can be characterized as a low cost, high quality grocery store. Eighty percent private label product mix, expanding its target markets, keeping costs down, and extremely effective marketing powers Trader Joe’s increase popularity. Since 2002, the market value of private food label has risen twelve percent (Datamonitor, 2008). This essay

Threat of Substitutes: Few substitutes such as bars for hard liquor, restaurant for food, etc. The threat is low because product sold depends upon customers taste and preference and there is minimal product differentiation.

Trader Joe’s operates over 340 stores in 9 states were they “buy direct from suppliers whenever possible, bargain hard to get the best prices and then pass the savings on to the customer” (Trader Joe’s, 2013, para. 4). Whole Food’s Market is the “world’s leader in natural and organic foods, with more than 360 stores in North America and the United Kingdom” (Whole Food, 2013, para 2). Trader Joe’s and Whole Food’s Market have managed to take original ideas and spread them throughout the nation to many different customers. Although they differ not only in the technique in which they decide to bring products to their customers but also in term of inventory management and supply chain organization. These two companies have become so successful in my opinion, not by what they differ in but what they have most in common, which is their commitment to their loyal customers, employees and undeniable quality in their products they sell. Through their loyalty to their customers and employees in addition to their irreplaceable value

United Beverages’ CEO is debating with his department heads on the course of action the company is going to take in the future. Their flagship product, GangBuster, has been highly successful for the past 5 years. However, they have been thinking of entering the market for Energy Drinks for kids. Paul Diaz also comes up with a revolutionary idea of the dual-drink, having two separate flavored drinks in a bottle and being able to mix both flavors. Due to the limited resources of United Beverages, they have two weeks to decide whether to expand their portfolio or not?

The threat of new entrants: According to our text, the threat of new entrants is the possibility that the profits they make in an area may be eroded by new competition. The McDonald’s by me competes with Burger King, Wendy’s, Dairy Queen, and other smaller places like Zel’s. Each time a new place opens the less business they will have. For the other company, there will be a barrier to entry. They will have to use product differentiation to bring in the customers…to make them overcome their loyalty to McDonald’s (Dess, p. 53).

If an industry is profitable, it will become a magnet to attract more competitors looking to do same business with us. If it is easy for these new entrants to enter the market, this poses a threat to the firms already competing in that market. Threat of new entrants is one of the forces that shape the competitive structure of an industry (Marc, 2014). A high threat of entry means new competitors are attracted by the profits of the industry and can enter the industry easily. New competitors entering the marketplace can make the market share and profitability of existing competitors more threaten cause the existing competitor to make some changes to existing product quality or price levels. A high threat of new entrance can make an industry more competitive and decrease profit potential for existing competitors whereas a low high threat of new entrance can make an industry less competitive and increases profit potential for the existing

• The phenomenal increase is facilitated by an annual 10% growth in the amount that Americans spent on meals away from home.