Over the past thirty years of operation, the company has continued to expand throughout the country. Today, Trader Joe’s footprint is spread all over 460 locations with more than 38,000 employees. This success is attributable to three significant comparative advantages to the company’s competit...
FROM: Name
TO: Dan Bane
SENT: 1st September 2017
SUBJECT: INDIVIDUAL PLAN OF ACTION
Case Introduction
Over the past thirty years of operation, the company has continued to expand throughout the
country. Today, Trader Joe’s footprint is spread all over 460 locations with more than 38,000
employees. This success is attributable to three significant comparative advantages to the
company’s competition; consumer awareness, floor space efficiency, and employee loyalty. As
noted in the case study, technology has accelerated the retail market changes over the last
decade. This has led to entry into the market of new and diverse competition. The entry of
Amazon, for instance, has sent shock waves through the market. In light of these developments,
the company needs to rethink its operational strategy to retain its competitive advantages.
Although the company has experienced market success with its current business strategy, the
new market contains new demands to retail businesses. The digital technology trend is changing
the customer experiences and offering alternative shopping models. To compete with new
entrants, the business strategy must be updated. As the company expands, secure attachment to
the business among employees is being stretched. This means that the company’s advantage of
employee loyalty is no longer intact. This action plan maps out a sequence of actions that the
company must take to address these problems moving forward. These actions include a
remodeling of the operational strategy and invention of a new employee assessment model to
reduce the harmful employee competition caused by the need for promotion. There is also need
to for a marketing strategy based on digital technology and new media. Addressing these
problems will ensure the company’s competitive advantages are retained and new strategies
implemented to counter new threats in the market now and in the future.
Situation Analysis
Operational Strategy
Trader Joe’s is more than a mere grocery store that has become something special to many
American customers and has managed to inspire loyalty from its customers over time. Regarding
its operations, it has managed to scale down its strategy which might be limiting in nature. For
instance, it opens about five locations each year. These new stores are small stores that have
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curated item selections. Unlike other typical outlets whose store has stock-keeping units of up to
50,000. The difference with Trader Joe’s is that it has only 4,000 stock-keeping units with about
85 percent of these stocks bearing its brand. It can sell about $1,750 in merchandise for every
square foot (Ager & Roberto 5). The limitation presented here can considerably make the
company less productive. Limiting the SKU at the firm discourages customers because one has
to visit more than just one store to get all the goods and services they need.
On the issue with space, Trader Joe’s operates on limited store spaces ranging from 15,000
square feet down to 10,000 square feet. Most contemporary stores operate on space around
40,000 to 50,000 square feet (Ager & Roberto 5). Trader Joe’s operate in suburban areas on strip
malls which has limited its size. The parking lots are also small, and during busy days such as
weekends, customers have a problem parking their vehicles. It is not only limited to the parking
but also the selection of items inside the stores. Overcrowding has been a problem. Moreover,
customers locating items becomes a problem because even the shelve organization with the
limited space becomes complicated.
Employee Experience
Employees at Trader Joe’s seem happy always. This is a strategy that has made its customer
experience the best around the United States (Ager & Roberto 3). However, some other factors
have to be addressed. Most of the employees are not satisfied with its system of operation.
Despite the initial training that indoctrinates the employees into the company’s system; other
core issues will always disturb them and have to be taken care of. The horizontal structure of
work at the grocery makes opportunities limited for the workers. In the horizontal work structure
at Trader’s, Joe’s the employees in all the lines have the same input on the running of the
activities. There is no specialization as they are trained to work on various units.
The interdependence created by this horizontal working system may generate a lot of conflicts
between the departments because of the dependence of responsibilities. The employees find it
hard to coordinate activities of different departments. It is factual to note that not every other
employee prefers working in a specific unit of the organization due to personal work preferences.
The system limits their ability to be more productive through specialization. Efficiency is also
hindered since adopting different working strategies every rotational period may not give them
time to feel comfortable working with the lined assigned due to limited operational time. The
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