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UGBA 115:
Competitive Strategy Trader Joe’s Midterm Case Analysis

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Jean Carlo Hoyos

The Industry
The grocery industry in the United States is currently an attractive industry (a.k.a. profitable). This attractiveness derives from the relative low threat of new entrants, low supplier and buyer powers, and low threat of substitutes. The main factors driving these results are the low concentration of suppliers and buyers, the significant barriers to entry due to high up-front investment costs (for infrastructure and distribution channels) and scale economies, low availability of substitutes, and the threat of retaliation from …show more content…

On the Operations side, TJ’s resistance to implement self-checkout stations is not only a wasted opportunity to decrease costs, it is also a wasted opportunity to reduce wait time on cashier lines. In addition, customers’ complaints with parking could ultimately lead them to choose bigger stores or other small-footprint ones.
Given the situation described in the previous paragraphs and on the exhibits, Trader Joe’s should consider the following two recommendations for its future growth: Start a social media campaign and emphasize on the organic food movement by branding organic products with the Trader Joe’s name.
For the social media campaign to match TJ’s culture, the company should emphasize on “artsy” online platforms such as Instagram, to integrate photos and “hashtags,” Twitter, to “tweet” about new products or recipes, and Vimeo, to upload videos of their recipes, instead of Facebook and YouTube which go beyond the TJ’s target market of educated individuals. Also, in order to take advantage of “smart” devices, TJ should develop an app for iOS and Android that could integrate both platforms, the online website, and the online fan base that currently exists.
Trader Joe’s should also engage in branding its own line of organic