Estimated financials and profit margin. This industry is very cost competitive and competition amongst companies within the industry are starting to witness a gap between premium brand grocery stores and low-end grocery stores. Trader Joe's is a neighborhood grocery store with amazing food and drink from around the globe and around the corner. From the SWOT Analysis (Appendix G), Trader Joe’s has an opportunity to learn more information from customers. Trader Joe’s announced that 1,250 of its 53,000 employees tested positive for COVID-19 within the past eight months, an infection rate of about 2.4%, according to the grocery store chain. Since 80 percent of the products sold at Trader Joe’s are private label, the identity of the supplier is not known because the product is sold under the Trader Joe’s … The Trader Joes economic factors or forces involves interest rates, inflation, and growth of economy, cost of living, working hours, wage rate and exchange rates. Moreover, the recommendation also needs to entail the plan B, that if for instance the results are not generated as per the plan, the second set of recommendation must be incorporated in the plan, in order to allow the organization to quickly shift to the plan B, in order to avoid the losses and sustain the presence of the company in the market. The major advantage is that it enables the significant comparison between time periods. It is more concentrated than the industry it is selling to. A strong Trader Joes recommendation must cover the key areas as how the organization will implement the alternatives, what benefits will it receive if it implement the when alternatives and what could be the cost, that he organization will need to overcome or address, in order to effectively implement the alternatives. Trader Joe’s doesn’t have any having official Trader Joe’s social media sites, besides the fans websites made by fans. Relative movements in price: targeting for the purpose of creating the shareholder value depends on the relative performance of price. Joe Coulombe, the founder of this grocery chain, in 1958 acquired a small chain around the LA area under the name of "Pronto Markets," the idea of Quick and fast markets. This essay will discuss and analyze Trader Joe’s strategic group and their closest competitors as well as offering an opinion on the macroenvrionment factors that affect Trader Joe’s future growth. Moreover it also delineates the impact of such changing factors on the users, and other stakeholders. Liquidity: it is the ability of an organization satisfying immediate obligations, maintaining positive cash flows and it most likely based on the balance sheet of company depicting the financial condition of organization. Trader Joe’s generic strategy is focused on differentiated products for a differentiated target market at low prices. The social factors includes safety and health consciousness, various demographics, population growth rates and cultural aspects. A bargaining power of a supplier in the market is strong if: The buyers having strong bargaining power can highly influence the profitability of the suppliers operating in the market by imposing condition that are not much favorable for the suppliers in terms of price, quality or service. After considering the major top problems, the business analysts or managers would then be able maximizing the shareholder’s wealth. In order for Trader Joe’s to solve the weak social media use issue, I recommend that Trader Joe’s promote an employee who has the skill and knowledge to take on full responsibility of social media. If you want original case solution please place your order on the website; or contact customer support representative. The information gathered ranges anywhere form buying patterns to simple, overall satisfaction from their shopping experience. Firm infrastructure activities at Joe's Trader supports entire value chain though the scope varies given that Joe's Trader is a diversified company even within the industry. Lastly, while doing the evaluation of Trader Joes alternatives, it is important to quantify the options through different techniques. If this continues, then firms may sell some of their chains to private equity investors. This analysis of the external environment will be done with the use of Porter’s Five Forces. The sales implications for the selling and purchasing power, economies of scale and amount of market share. It is a factor that contribute positively towards the growth of the organization. By assessing the stability of the company needs use of balance sheet and income statement as well as non-financial and financial indicators. Alternative are the different ways of achieving a same end goal through two or more different methods. Due to which the products being produced by the companies that are already existing in the market and is using the same technology are than replaced by the other company’s products that are comparatively better in terms of price and quality and are being produced from sectors with significant profits. All rights reserved, Trader Joe's Case Analysis. Thus is important as to allow the organization. In particular section, the management/teams develops different options through which the problem can be resolved. The robustness of the option also needs to be analyzed. Everyday low prices 3. The collection time is measured by days receivables on credit sales.With increasing day’s receivable, the company would need more working capital. An upper performance quantile can be the most appropriate performance standard (D’Aveni, 2007), The Trader Joes assessment of the operational efficiency in the initial stage as a whole for business or any of the business sub-division is likely performed through a percentage analysis of income statement. These factors are important to be mentioned in the recommendation, in order to make itr strong and firm and allow the stakeholders/reader to connect the problem and solution, leading to better understanding. All the environmental factors are consider as a threat to an organization that could affect the efficiency and effectiveness of the organization. To avoid this decrease, Trader Joe’s and its supplier need to maintain a close relationship. The Trader Joes competition is moreover on basis of diversity, the development within the sector and the barriers related to entrance in the market. 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. Moreover it does not consider non-market forces. Gross profit margin (GPM):it is also referred to operating profit margin. It is comparatively low importance for the companies with minimum need for capitals such as leased retail operations and wholesale distribution. Whole Foods stores contain 21,000 SKUs and store sizes average roughly 38,000 square feet. Which areas are in need of immense attention? The Basic idea of the Trader Joes VRIO model is to analyze the factor that are valuable for the organization. Most grocery stores are on average 40-50,000 square feet, while the average Trader Joe’s is less than 15,000. Some companies can’t make it out of the gap because switching to the new products would be very costly for their company. Conduct a basic financial ratio analysis using the data in exhibit 2 (i.e. This is important as it allows the organization in meeting the ultimate goals and addressing the problem effectively. This will allow the team to develop a better solution plan addressing all the factors and considering all the risk associated with it. Trader Joe’s keeps all business transactions with their suppliers a secret. It can be a skill, a resource, image, market leadership, relation with buyer or supplier or any other advantage relative to its competitors that fulfill the needs of the market by providing the organization with a comparative advantage. Trader Joes Apart from the model only provide the overview of the environment and does not define the industry clearly. Companies are using social media as a gateway for market research. With success in the financial realm of their company, Trader Joe’s has been able to have 400 stores nationwide and earn revenues larger than $10 billion in the past year. Such products prevail due to the technological and innovative advancement. Day’s receivables: it is the measure of how long will it takes for an organization collecting bills owing to it. The sales amount of an organization depicts the business size. The Trader Joes VRIO analysis is basically the extension of the Trader Joes PESTEL analysis, which allows the oragnation to understand the resources, competitive edge, value proposition and its value in the market. In 2013, Trader Joe's faced several threats as larger chains such as Wal-Mart and Tesco had begun to open small-format stores that mimicked the Trader Joe's approach. Combining all of these lasting inevitable impact on the expectations of market regarding the cash flow generation and future success of the company. These are the factors that an organization lacks and does poorly in comparison to the organizations operating in the same market at the same level. An organization should consider the influence of the national and international laws where the organization would originate the business operations. A change in the gross margin might derived from the combination of the changes in the product’s selling price, manufacturing cost level for the product and the variation in the business’s product mix. All in all, the advantage of using the VRIO analysis is to determine the sustained competitive edge in the market. It is significant to consider these factors. Trader Joes Customer are deemed strong if they contain negotiating leverage specifically if the industry is sensitive to price, the buyers can pressure suppliers for further price reductions. The company offers its branded products to highly educated and low income generating target market, at lower prices as compared to its customers. In 2011, supermarkets share of grocery sales in the United States fell to 51%; just a decade ago, supermarkets accounted for two-thirds of all grocery sales in the nation. Sociocultural Forces: The new trend of consumers wanting to live a healthy lifestyle has made a huge impact in the supermarket industry. The recommendation is mad in away, that not only offers the solution the problem, but also depicts the implementation process and the course of action that the organization needs to take in order to be successful. Companies caught up in the middle of the gap are strategically trying to get themselves out of the gap. From customers’ responses, companies can learn more about customers and figure out a way to improve the problems or enhance the already established system. Trader Joe’s currently does not have an official social media, yet fans are creating fan-based accounts. With the golden technology age that is occurring right now, companies are finding ways to bring technology into their businesses to enhance the customers shopping experience. It is due to the fact that the organization needs to analyze exact factor in terms of its reversibility to see, if the process can be reversed, if the option fails to offer the respective results. By doing so, Trader Joe’s is able to save money because they are buying new products in bulk. Social media is a new aspect being brought into companies. The ration lay under profitability are discussed below; Return on assets (ROA): it is one of the most commonly and widely used performance measure of an organization. The company holds its vision closely as it allows them to orientate its innovation in terms of choices regarding the investment and strategies. It is noteworthy, that the charities needs to be included where a government are not willing services and goods to be provided. Apart from this it only cover the issues that are definite and doesn’t priorities them. This could potentially ruin Trader Joe’s business. The realistic and SMART nature of the option is important to be considered and developed, so it offer maximum value and also resolves the problem effectively. Such is important in order to allow the organization move in a specified direction, reducing the chances of deviating From the actual path. In recent period, the problems statement  are widely used by the firms to allow the management execute the improvement process or identify the loopholes that are effecting the overall performance or profitability of the company. Analysis From ATTOM Reveals Fresh Take on Grocery Stores Impacting the U.S. Housing Market Trader Joe's leads the pack for homebuyers, while … Trader Joe’s Wal-Mart KSFs Importance Score Weight Score Weight Supplier Network. The Trader Joes substitute products are an alternatives that are available in the market at comparatively better prices. Thus, the analysis of the financial statement is important mode of assessing the past performance as well as planning and forecasting the future performance. The ratios under asset management includes current asset turnover, day’s receivable, days of inventory and inventory turnover. Also, the purpose of the problem statement is to describe the external environment and its effect on the overall organization in short and long-term. The products in the industry are standardized or are undifferentiated. It is amazing how technology has improved shopping experiences for customers. It can be used for examining the business operations from the variety of perspective for determining the ways that can be used to strengthen the business and understating the greater financial condition or situation. One can be in any city in America and easily find a grocery store. In addition, it also analyze the factors that are Rare within the organization. These are the factors that are easily imitable by the organization (other players) and thus needs to be considered. Competitive strategies … Trader Joes Porter five forces reflects the competitive environment of an industry. Whole Foods' second-biggest rival is Trader Joe's, a California-based privately held business that began as a chain of convenience stores in 1958 when the … Issue #3: Lacking technology to enhance shopping experience. In addition, the imitable factor also outlines the factors that are inimitable by the other organization. The effectiveness of the analysis highly depends on the accuracy of the collected data, updates to accommodation changes in timely manner and other tools trimming down the PESTLE limitation to some extent. We are committed to providing our customers outstanding value in the form of the best quality products at the best everyday prices. Trader Joe’s does this so the customers and the industry are surprised with what products they are offering in their stores. Another limitation associated with Trader Joes SWOT analysis is that it provide equal weight to each factor regardless of their impact or relevancy. Basically, developing a problem statement is an extensive process and requires the proper brain storming of the teams in order to identify the underlying loopholes or inefficiencies within the organization. Trader Joe’s is a national chain of neighborhood grocery stores. From the Five Forces Model (Appendix C), it is stated the reason behind Trader Joe’s business a secrecy- to keep competition clueless. This is important, as it allows the reader and stakeholders to understand the proven facts, and the pasts results such recommendation has harvested, leading to more acceptability and also the determination of the plan that may be in need to be  adopted so to avoid the delays and resistance in the organization, while implementing the change. Once the purchase is made, Trader Joe’s pays its suppliers immediately rather than trying to stretch out its account payable for as many days as possible. In case of high current debt to equity ratio, it means that the company would be in problematic situation while paying its bills. The factors or forces are discussed below; These are the Trader Joes forces that tends to be altered by the influence of government on the infrastructure of country. The Premium Trader Joe's Company Report contains critical information including: Revenue from previous years (2010 to present) Growth rate. Moreover, the problem statement allow the management to trim down the symptoms of the problem an organization is facing and look on to the real problem that is causing the damage to any specific aspect of the company. The credit policy of an organization last greater impact on the day’s receivables. SWOT for Trader Joe is a powerful tool of analysis as it provide a thought to uncover and exploit the opportunities that can be used to increase and enhance company’s operations. Today they are estimated to be around 8.5 billion. A strategy that has worked effectively for Trader Joe’s is the secrecy within the company. Additionally, the macro environment includes legal and political factors, sociocultural forces, economic forces and technological factors. In addition, while stating the problem statement, the aim of the management is to see the mission and vision of the company and then analyze the current state of the organization, such also allow the right identification of the problem and the lead to the development of concrete problem statement. Not only this, it drives globalization, the factors includes environmental and ecological aspects, and available services as well as products. This in turn might defeating the prime reason of the pestle analysis. Competitive strategies currently utilized, vary throughout the industry. Trader Joes mission and vision statements can be likened to the progressiveness of the practices of this company while operating in a very competitive niche. If they do not follow with this tactic, then Trader Joe’s customers will begin to have negative feelings about shopping there. Economic Conditions: The unemployment rate has an affect on the supermarket industry. One of the unavoidable advantage of this model is thatit has begun establishing benchmarks – across companies and over the period of time which can be used for flagging the potential issues areas where more than one ratios are reflecting the key problem or issue. The acronym Trader Joes SWOT stands for strength, weakness, threats and opportunities. The average value of homes near a Trader Joe’s store is $644,558, compared with $532,224 for Whole Foods and $250,850 for Aldi, according to ATTOM Data … Trader Joe's is a privately held chain of premium grocery stores with headquarters in Monrovia, California. Trader Joe’s and its suppliers keep their business with each other a secret. While developing The Alternative, the following factor are taken in account, in order to develop the best alternative that may resolve the problem effectively. The difference in products and prices is the reason for the grocery store gap. Matthew W. Burr MBC 645: Case Analysis- Trader Joe’s Strategic Management Introduction: The supermarket industry has evolved throughout last half century, with market share decreasing. Are You on a Short Deadline? The new products contain attributes that are more appealing or better suited to their needs. Competition from Producers of Substitute Products (Moderate): Competition from producers of substitute products is moderate. Nonetheless, the analysis needs to be conjunction with other frameworks such as S-W-O-T analysis in order to get a more realistic picture. Opportunities: Trader Joe’s has an opportunity to use more social media sites. The particular decision criteria incorporates all the factors that the company aims to archives. 7%. The open discussion and review from past enables to see more clear picture of the ultimate outcomes, leading to better implementation and selection of the right alternative. whereas the micro environment includesthe external customers of an organization, distributors or agents, competitors and suppliers. Individual expenses or cost items are associating to gross sales revenue adjusted for all allowances and returns. These weigtage are given based on most favorable to least favorable, and the option with most rating s ultimately selected. Supervalu sold five of its grocery chains to private equity investors due to them having to release employees to maintain cost competitive in the industry. Cost of goods sold and gross margin analysis: in operational analysis the most commonly used ratios involves the calculation of the cost of sales as a percentage of sales. Appendix A: Dominant Economic Characteristics Market Size and Growth Rate: The supermarket industry contains retail outlets in various shapes and sizes. Trader Joe's Company operates as a convenience store. The barriers can be both industrial and legal. The Invulnerability of the option is also analyzed, in order to understand the sustainability of the option if the one part factor is missing so to understand the suitability of the option. Legal and Regulatory Factors: Wage legislation has affected the supermarket industry by employees unsatisfied with the amount of pay they receive for the amount they work. In this element of SWOT the abilities and the key properties of organization are discussed that gives an organization an advantage over other organizations by making it more competitive. 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