Introduction
This report presents the strategic analysis and the strategies followed by the Trader Joe’s. The analysis is followed by the recommendations given at the end of the report. Strategic Factor Analysis of Trader Joe’s tells about strategies that are currently used by this company and how these can improve its profitability as compared to its competitors. This report uncovers the problematic areas and then applies strategic tools to come up with the recommendations for the future actions.
Trader Joe’s was started by a person named “Coulombe”. After completing his education of MBA Coulombe started working with Rexall Company. After some time of experience, he acquired one of the firms of Rexall. After that, Coulombe started Trader Joe’s in 1967. He started Trader Joe’s with the aim that he wanted to support the students who are getting an education so that they can work in Trader joe’s and can get good compensation. The shops were also established in areas where there are more educated people so that they can easily approach Trader Joe’s and fulfill their needs. The other thing that was focused on the company is to provide services to those persons who are more educated but are getting less compensation (Lewis, 2005).
Employee Compensation
Another good aspect of Trader Joe’s is that it pays good attention in satisfying its employees. Traders Joe provides its employees with good compensation. The salary given to them is enough to support a family. Because of this, it gained a good reputation that its employees enjoy their work while working in Traders Joe’s.
Strategic Analysis
Strategic analysis of Trader Joe’s will tell that by using which strategies Trader Joe’s reached the current position. The further it will be discussed that how those strategies led to the success of Trader Joe’s.
Acquisition with Aldi
One of the strategies which Trader Joe’s used is acquiring its business with Aldi North. It is one of the growth strategy used by Trader Joe’s. In 1979, Trader Joe’s decided to join its business with Aldi North. Aldi North is one of the grocery stores which had its chains in different areas of the world (Kowitt, 2010).
The joint venture with the North Aldi diversified the business of the Trader Joe’s. It gave Trader Joe’s full autonomy that it can carry its functions how it want to and can run the business according to its requirements. Both of the companies carried its functions secretly. They led very secret lives that no one from the media could approach them. On the death of Albrecht, even the newspaper could not find any of his photograph for the news. There is very little information on the websites of the company. It does not leak any of its information. Even the employees of the company do not talk to any of the media personalities. It does not allow to give its information to the external world (Kowitt, 2010).
Leadership Strategies
Another strategy was the Appointment of new CEO of Trader Joe’s. One of the course mates of Coulombe named Shields became the CEO of Trader Joe’s. After the arrival of new CEO, the growth of Trader Joe’s further increased. It expanded its business from California to Arizona. It opened many new stores which proved to be very beneficial for Trader Joe’s (Kowitt, 2010).
Trader Joe’s also introduced new win for the students in the university. Its wine became very famous among the people, and they started liking it. It also opened many of its stores in Chicago and many other areas of southern parts of United States. At that time, it was not using any modern technology because of not having a very high budget. It was using the basic things that it previously had. In the duration of new CEO Trader, Joe’s was expanded to almost 175 countries. After Shields-Dan Bane became the new CEO of Trader Joe’s (Kroeze and Keulen, 2013).
Good Compensation Strategies
Another strategy that is used for growth by Trader Joe’s is that it provide its employees with good compensation packages as compared to its rivals which attract many applications for a job to Trader Joe’s. One of the benefits of this is that it attracts the newly educated students towards Trader Joe’s who do not have jobs and want to support their families. It gives many health care services to its employees. It also provides good services to the people like musicians and artists who do not get good salary packages and then they can support them by working there. This strategy benefited them so much that at once it have so many applications for the job that it have to stop getting any further applications (David and 戴维, 2001).
Training Sessions
Trader Joe’s used to give its employees training sessions of 10 days to the newly arrived employees who do not have any experience of the job. So after ten days training, they become a little bit familiar with the company and can work better than which they can without any training. It named those training days as Indoctrination days. Instead of explaining its mission statement in those ten days to its employees Trader Joe’s focus on the major values that are essential to be in the mind of the employees.
Trader Joe’s give its employees every kind of experience about every product in the store. They want that their employees should be aware of each and everything. According to them, their employees should not be special in any field rather they should have general experience in everything (Freeman, 2010).
Communication Strategies
Trader Joe’s also focused on making their communication systems better than other companies. It said its manager to communicate messages to the employees’ not on intercom but through a bell system. It also focuses on providing its customers urgent help whenever they want. It said that instead of filling the shelves the priority is to help the customers (Parker, 1999).
Problems Faced by Trader Joe’s
Besides many of the growth strategies used by Trader Joe’s it also faced many problems that lead to its decline. Some of those problems are as follow:
Advertising Problem
One of the major problems faced by Trader Joe’s is that it do not pay attention towards its advertising techniques. It does not give too much information on its websites which don’t make most of the people aware of its products. Most of its advertising are made from the mouth of people. On the other hand, many of its fans have made its pages on Facebook, but it do not provide much information on its official page. It only used radio for its advertisement which is not enough these days. It also did not use any coupons or other programs to attract more customers to its stores. It did not hire any Public Relation Person for its promotion. Therefore, if its customers want any online information and services than it is not possible because it has not established its information online (Hussi and Ahonen, 2002).
Area Problem
Another major problem faced by Trader Joe’s is that it do not have too much area for its stores. Most of its stores are established on very small area. One of the benefits of this is that it takes very small finance, but one of the losses that it faced because of this is people do not find much space for parking in weekend days when there is more rush. One of its customers said that I love Trader Joe’s because of its process and many other factors, but one thing that takes all my love away for Trader Joe’s is that it does not have enough space for car parking and to stand which is a negative thing. On Saturday and Sundays when the number of customers is so much high there is no arrangement for people to stand in line or to park their cars which create a very bad impact on the minds of people which is bad for its reputation in the minds of people (Daley, 2006).
Recommendations
Trader Joe needs to overcome the problems which it is facing and are an obstacle to its success. Some of the suggested ways are:
Improving it advertisement
One of the most important steps that Trader Joe’s should take for its success is that it should improve its marketing and advertising techniques. It should make its product known to the people so its profitability will increase. It should make an official page on Facebook and other social media sources and provide people most of the information online so it will attract more customers then. It should also use TV advertisements for its promotional activities which will make it more famous. It should also use newspapers and billboards for its promotions in different areas of the world. The advertisement is the thing that attracts the interest of customers and persuades them to but their product as compared to other products (Kowitt, 2010).
Online Business
Trader Joe’s should also start online business services so that most of the people can approach it then. If it provides its customers online services, then it can also get customers from the areas where it had not opened its store so it will be helpful for it to increase its profit margin. People then can order its products online, and they can deliver those products to people. It will increase the demand for its products. It should make an app in mobile that will help the people to get the information about its products and their prices and so that they can order the products through online payment or cash on delivery. It provides them ease that they do not have to go to the stores and can get the products at home. This service attracts more female customers who cannot go to stores on a daily basis (Colquitt, Lepine and Wesson, 2011).
Increasing Area of its stores
One of the things that Trader Joe’s have to improve is stores structure and its areas. It does not provide parking services to its customers who are a major flaw. It has to make its stores on more area so that in the case of rush hours so that it can accommodate them properly and it will not create any bad impact on the minds of people. If it had fewer stores in any area but with more area then it will be good for it because the reputation and easiness for the customers are the most basic thing for any company so it should focus on increasing it more than its profitability. It will then create more parking area for the customers, and they can easily buy from the store without ant tension of their vehicles (Karray and Zaccour, 2007).
Future of Trader Joe’s
The success of the business is evident from the point that in 2013 Trade Joe’s began to expand its business more as compared to the past. A Fortune magazine said that if Trader Joe’s will focus on expanding its business, then there is a chance that it can lose its quality then. Trader Joe’s should also focus on expanding its stores in different areas of the world. A girl when came to know from one of the fan pages of Trader Joe’s about its arrival in her town her reaction was noticed, and it seemed that she is very happy with the arrival of Trader Joe’s in her town. She was so much excited that now she can get the products of Trader Joe’s easily, and it will be near her house.
The report about future openings of Trader Joe’s showed that it is going to open many stores in different areas of the world which will make its product famous in those areas and will also increase its productivity. Another thing that can Increase the profit for Trader Joe’s is that it can also introduce new and different products in the market as compared to its competitors. As its competitors like Wall mart are very famous and have a variety of products so it should also focus on making new products. It should also introduce the goods other than eatable products so it will then have more customers with a variety of needs (Lewis, 2005).
Conclusion
After focusing on the report of Trader Joe’s it was noticed that Trader Joe’s used many strategies for its growth but in addition to those strategies it should also use other strategies that will improve its position in the market. It should also make its advertisement and marketing services better than before, and it should also focus more on providing ease to its customers. A review of the current and past condition of Trader Joe’s showed that the most basic thing for the success of any company is its focus on positive word of mouth. If the customers are satisfied with the products and the performance of the company, then it van achieve much progress in future. Another thing that is evident that the number of stores should be increased in different areas of the world. If people are aware of its product and services then customers graph will rise high. Moreover, the increase in the customer graph will make it better as compared to its competitors.
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