Trader Joe's Internalization

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

Trader Joe’s has great workforce management practices and its employees enjoy what they do. They have cheerful attitudes and are more than willing to assist customers with anything in the store. Trader Joe’s employees are engaged in conversation with the customers that shop in the store and make the customers aware of any new or exciting products from them to try. The positive behavior of these employees is due to the compensation and benefits each employee receives, which is far more competitive than other grocery food stores. Trader Joe’s has also created an environment where employees feel valued and know their opinions matter to the growth of the

The company keeps real estate costs low by staying away from desirable locations to accommodate its average smalls stores. Trader Joe’s takes prides in the way they cut costs and maintain its economical ways to benefit everyone. One of their slogans is “Every penny we save is a penny you save and our CEO doesn’t even have a secretary.” (Organizational Behavior 2014, p.499) There are many ways in which they fight to maintain keeping costs low. The company searches out delicious unusual foods from around the world and then directly deals with the manufacturers to make a contract. The company puts their own label and then makes it a house brand. Then they make each product a tester and if people like the product, it gets to stay on the shelf. This low overhead approach is what keeps the company going. What the company does not do is sacrifice quality, there house brands have been a success due to them taking risks. There are about fifteen new products put out on the shelves every week, but they make sure when one product goes out on the shelf, another product goes off the shelf. Therefore, the products that do not sell get taken off. They will even bring back discontinued products if customers request

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.

What are the main threads to Trader Joe’s competitive advantage? Is the company’s competitive advantage sustainable?

Trader Joe’s has successfully separated itself from its competitors and will continue to remain successful as their organizational culture values their employees and customers. Trader Joe’s has continually kept prices down, and offer one-of-a kind products while simultaneously keeping their customers and employees happy. Overall, customers want to build relationships where they shop and feel important, something Trader Joe’s has nailed the head

Grocery shopping is more diversified and evolved than ever before. Individuals across the nation have access to everything from exotic products to unique delivery services. Often, specialty stores have limited locations whereas specialty services have a limited reach. However, two retailers have expanded to hundreds of locations while adhering to unexpected market positioning for previously untargeted market segments. Whole Foods Market and Trader Joe’s have become household names while also innovating beyond regional and national traditional chains. Despite comparable size in

Dan Bane has been working with Trader Joe’s for over 20 years. In 1998 he become president of the company for three years, where he was then appointed CEO. Trader Joe’s originated as a small chain of grocery stores in 1967, and since then has expanded to over 465 stores nationwide across 41 states. Often referred to as the go-to neighborhood grocery store, Trader Joe’s has established its brand through continuous success under Dan Bane, generating a whopping 15.7 billion in revenue in 2016. Bane’s commitment to serving individual communities throughout the country is evident through the company’s donation of $341 million worth of organic food products to food banks last year. The company’s revenue has been growing at an average of 6.8 percent

Neither Whole Foods nor Trader Joe’s does much in the way of advertising, such as utilizing billboards or other spaces. Despite their minimalistic marketing approach, the stores are promoted through word of mouth, and each are equally popular among different demographics. Both stores sell re-usable bags that not only promote their respective “eco-friendly” images, but also work as effective advertising for the stores. All the styles are clearly branded, thus making customers who carry the bags walking advertisements. As far as promotion goes, Whole Foods offers a Whole Deal Value Guide, which includes coupons, Sure Deals, budget-friendly recipes, daily meal planners, and seasonal money-saving tips.

“At Trader Joe's, our mission is to bring our customers the best food and beverage values and the information to make informed buying decisions. There are more than 2000 unique grocery items in our label, all at honest everyday low prices. We work hard at buying things right: Our buyers travel the world searching for new items and we work with a variety of suppliers who make

Market Force has ranked Trader Joe’s as #3 for America’s favorite grocery stores (Vasel, 2016). Trader Joe’s is all about customer service, happy employees and offering high quality products at low prices. Their strategy is to compete differently than their rivals, and by offering products that the others can’t. This is reflected in their mission statement below:

Trader Joe’s success with their employee’s is based on hiring individuals who are “ambitious and adventurous, enjoy smiling and have a strong sense of values” (Uhl-Bien, Schermerhorn Jr., & Osborn, 2013, p. 98). Trader Joe’s employees’ exhibit job satisfaction and higher performance because they are compensated very well in their earnings, benefits and professional growth opportunities. Employees’ that are based in California stores “can earn almost 20 percent

Trader Joe’s doesn’t have some big store that you can notice from down the road, they do not locate their buildings in an area that you can see from the highway, instead a typically Trader Joe location is in a low-rent, out-of-the-way area. Unlike other food stores, Trader Joe’s does not have on-site bakeries, delis, seafood sections, butchers, and large produce sections. The case author mentions Trader Joe’s buys directly from suppliers and negotiates hard on price. They also have no form of advertising, their biggest type of promotion is word-of-mouth. You would think that a company whose biggest promotion is word-of-mouth would not be as successful, but somehow it works for Trader Joe’s.

Trader Joe’s should also engage in branding its own line of organic products (including meats).

Trader Joe’s offers a very lucrative financial package to management and contributes to the employee’s retirement funds