Trader Joe's Problem Analysis

1506 WordsNov 20, 20157 Pages
Trader Joe’s Problem Undeniably Trader Joe’s has had admirable success in pioneering a new style of grocery shopping which involves low prices for new exotic food. It modified the way traditional grocery stores practice business. For example, stocking only what it sells and sourcing products directly from manufacturers; therefore cutting out middlemen, ultimately, revolutionized distribution. In 2013, Trader Joe’s was ranked among the best supermarkets in the country (Ager & Roberto, 2014). Consumers were not the only ones noticing their success, new competition was created as other companies attempted to resemble Trader Joe’s success in the retail industry. Once noticing Trader Joe’s high sales per square foot, big store chains started adding small stores. These retailors included Target, Walmart, Kroger and other giant retailers. Despite of having low margin due to high cost of goods sold, Trader Joe’s is doing well financially and has placed itself in a distinct and loyal niche market. In addition to customer focus, Trader Joe’s has prioritized their relationship with their suppliers as well as high employee morale than its competitors. As Trader Joe’s faces strong competition growth, Trader Joe’s has new opportunities that with proper planning and utilization could keep the company’s growth figures. Porter’s Five Forces Threat of Substitutes When considering shopping for groceries, customers have the option to cook at home or dine out. Individuals can cook with what
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