Essay on Trader Joe's Analysis

1421 Words Apr 20th, 2013 6 Pages
Trader Joe’s

Trader Joe’s: A Quiet, Private, and Savvy Retailer

Thomas Pinnola

Strategic Management Professor Backhaus March 17th 2013

Thomas Pinnola
Professor Backhaus
Writing Assignment 2
March 17th 2013

Trader Joe’s: A Quiet, Private, and Savvy Retailer
Joe Coulombe started Trader Joe’s in 1967. Traded Joe’s can be characterized as a low cost, high quality grocery store. Eighty percent private label product mix, expanding its target markets, keeping costs down, and extremely effective marketing powers Trader Joe’s increase popularity. Since 2002, the market value of private food label has risen twelve percent (Datamonitor, 2008). This essay
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There are certain consumers that enjoy the routine of buying the same products every week. That basically means there is always going to be a decent amount of demand in this industry, making it difficult for firms to back out. The bargaining power of buyers is the third force that I will use to analyze Trader Joe’s company. The bargaining power of buyers can be defined as the buyer’s ability to drive prices down or the quality up. In the case of Trader Joe’s the bargaining power of buyers is low because the differentiation of their products is great. Another reason why the bargaining power of buyers is low is simply because there are a lot of them. The fourth force is the bargaining power of suppliers. This is an interesting aspect of Trader Joe’s and why they are so successful with keeping their costs down. Trader Joe’s cuts out the middleman and buys direct from their suppliers. Most of the suppliers are small local venders such as restaurants, farmer’s markets, and supermarkets. The products are then created for the shelves of a Trader Joe’s store. This means that the product differentiation is high, giving the suppliers a lot of the power. Say a product does not work out and is considered the bottom ten percent sales, that product will be rotated out of circulation. This is one way that Trader Joe’s is able to offer exciting new products frequently. The fifth and final force is one of the most important when analyzing Trader Joe’s. The threat of

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