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Trader Joes

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by

Yosi Murow

on 10 December 2012

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Transcript of Trader Joes

Your neighborhood grocery store A Industry Analysis Competitive Positioning Sustainable Advantage Internal Factors:
Value System: Relaxed culture
Missions and Objectives: Neighborhood store

External Factors:
Suppliers: Keep finding unique products.
Competitors: They sell much more quantity.
Social: Society starts wanting to buy organic and unique products. Environmental Factors SWOT ANALYSIS Overview 1967 first store in Pasadena, California.
Founded by Joe Coulombe and owned by the Albrecht family since 1979.
Started off as a wine store with food.
Look for hard to find and innovative food and beverage products.
Set trends in the organic and differentiated food and beverage market.
Today has 367 stores and counting. Mission and Values "The mission of Trader Joe's is to give our customers the best food and beverage values that they can find anywhere and to provide them with the information required to make informed buying decisions. We provide these with a dedication to the highest quality of customer satisfaction delivered with a sense of warmth, friendliness, fun, individual pride, and company spirit." Value is the most important concept for Trader Joe´s, in giving the highest quality products for the lowest possible price. great food + great prices = Value Barriers to Entry ENTRY Low profit margin in grocery industry.
Economies of scale, larger companies sell and buy more at lower prices.
Very high initial investment needed. Health department government regulations.
Established brands.
Distribution channel.
Big piece of land needed. Buyer Power Buyers are price sensitive.
Difficult for buyers to contact suppliers.
Grocery industry sell products that are indispensable for buyers.
Buyers generally buy in high volume.
Look for differentiated products out of the shelves.
There is a market growing everyday for high quality and organic grocery products. Supplier Power There are many suppliers in this industry.
Many stores are able to do backward integration.
Supplier sales are of very high volume.
Supermarkets and grocery stores are price sensitive with their suppliers.
Suppliers are dominated by many companies.
There are shelf fees for suppliers.
Trader Joe's private brand labels. Substitutes Families tend to buy in supermarkets because of the products they look for.
Warehouse stores are a concern for people wanting to buy higher quantity and no differentiated products.
Supermarkets and grocery stores may have lower prices on certain mainstream products. Rivals There are rivals in the same organic and differentiated product industry: Although, none of these have the concept that Trader Joe's has. Broad Narrow Low Cost Differentiation Focus Strategy Has a very distinguished target market: "educated people who want to save money"
Customers are very loyal and like the whole "beachy" feel of the stores.
This segment of the market is growing everyday and becoming broad.
Have very unique products and hard to find, but have low-cost.
Very difficult to imitate this concept and the business model they have.
Unique shopping experience in a relaxed environment.
Private label products that are low cost. "2 buck chucks" Charles Shaw wines.
Company has no debt and pays suppliers on time always.
Unique organizational culture.
Efficient logistics and distribution center to stores.
Great store locations.
Set trends.
Very loyal customers. The "Trader Joe´s" brand and private label products.
Carry a lot less products than other grocery stores, having less suppliers and wasting lesser products.
Do not charge shelf space.
Do not place products on shelves based on profit margin, but by what "team members" like or think sell most.
Have much smaller stores than supermarkets and grocery stores. Strenghts Weaknesses Opportunities Threats Private label brand products.
Loyal costumers.
Low-cost inventory strategy.
Hard to find products.
Buy directly from suppliers.
Distribution center. Lack of advertising.
Long lines.
Low profit margin.
Parking in stores. European and Australian Markets.
Target Market is growing.
More store locations in US.
Organic and healthy trend. Future trends may pull customers away.
Increase in price of rare products.
Competitors imitating concept.
Lose cultural values.
Hard to find products=few suppliers. AGRESSIVE STRATEGY OPPORTUNITIES
+
STRENGTHS VS Market appeal for differentiated products with low-cost.
Similar target market.
Very unique organizational culture and business models.
Very hard to imitate.
Rare. Long Term Outlook Developing target market and customer appreciation for the Trader Joe's culture.
Keep expanding in the US.
Expand to the European Market and Australia.
Trader Joe's brand growing.
Maintain the cultural values. THANK YOU
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