Joe Traders

Surname 1 Name Instructor Course Date Trader’s Joe 1. How firms in the supermarket industry make money Grocery sales form a major item that most supermarkets deal with. The sale of general merchandise such as electronic items, apparel, household goods, hardware and toys further expanded the range of products that supermarkets sell. Whole Foods Market operates a large number of stores in which they sell perishable products such as bakery products, fruits and vegetables. The company which has invested heavily in the sale of organic and natural food products has risen to higher ranks in the United States. Dollar general operates large number of small discount stores. The stores deal with the sale of laundry detergents and other toiletries. The firm reported a total of 4.8% in its annual growth in the year 2012. 2. Financial ratio analysis and how the results reflect different strategies pursued by the four firms

Debt ratio

Whole foods

Kroger

Safeway

Supervalue

0.303

0.831

0.755

0.998

Surname 2 Gross profit margin

0.349

0.209

0.270

0.222

Return on asset

0.080

0.026

0.034

0.086

The debt ratio indicates the relationship between a firm’s debt and assets. A higher debt ratio is an indication that the firm faces a higher risk of being faced out of the market which is a likely case in the Supervalue store. Gross profit margin indicates how much profit a firm can earn without including its indirect costs. Wholefoods is likely to earn more profits and that is why it forms the backbone of TJ’s proceeds. Return on assets measures compares the firm’s assets and its income. A bigger ratio is more desirable than a small one. Hence from the above stores, Wholefoods is at a more advantageous position. 3. The key sources of Trader Joe's competitive advantage Offering of products aimed at sophisticated and educated consumers. Such products include sprouted wheat bread, whole-bean coffee and black rice which were not originally offered by supermarkets. This group of consumers formed the backbone of the company’s customer base. Private labeling of items under brand names such as Trader Ming, Trader Jose among others which made the firms products to stand out from the rest made the company to wine over its competitors.

Surname 3 Product diversification which saw the firm take up new products such as the sale of pantyhose and music albums that enabled it to attract another set of consumers is key towards finding space in the competitive environment. The company aims at reducing its employee turnover through better remunerations thus gaining their trust and confidence. It further developed a new approach in advertisement such as the publishing of customer’s newsletters to attract more customers. Maintaining adequate stocks on goods that are more preferred by the customers is one of the key reasons why the firm has been able to maintain as well as to attract new customers. The competitive advantages are streamlined on seven core values of the firm which include integrity that is evident it the manner in which the firm deals with its customers and suppliers. The company is product driven in order to meet the needs of its customers. The company treats its store as the brand in the sense that individual products are not regarded as brands but that is attributed to the entire store. Zero tolerance to bureaucracy which encourages openness in the operations of the company and by taking the products to the people by ensuring that they can access the stores anytime at their own convenience. 4. What are the main threats to Trader Joe's competitive advantage? Is their advantage sustainable? Concerns have been raised over increasing cases of bureaucracy in the company as it seek to expand by increasing the number of its stores thus making them more accessible to the consumers. The implementation as well as the adoption of new processes and procedures has resulted in many employees demanding advancement and compensation for the new roles that they have to take in the company. This has posed a challenge as the firms competitors are likely to take advantage of the situation and take up some of the loyal

Surname 4 employees of the firm. A major threat to its competitive advantage is its growth which is taking place so fast making the firm to lose track of its unique cultural attributes and if it remains low the firm may risk losing its key talents. The firm is unable to locate rental properties at reasonable prices in its target markets. The firm is likely to face stiff competition from firms such as Tesco that is planning to set its base in areas that Trader’s Joe has been dominant. This means that their competitive advantages are not sustainable in the long run. 5. How would you modify Trader Joe's strategy moving forward? Trader Joe need to invest further on the taste and preferences of its consumers through its unique cultural blend that allows its customers to express as well as define what they expect form the company. Maintaining their focus on the customers will enable the firm to outdo its competitors even as it seeks to expand to newer territories. Increased product differentiation will enable the firm to meet the needs of its different customers due to new pricing strategies associated with it. The shopping experience created is innovative and unique in its own respect which makes the firm to differentiate itself from its competitors.