Trader Joe’s Case Analysis
Trader Joe’s
In July 2013, Market Force Information released the results of a new study in which over 6,000 Americans ranked their favorite supermarkets in a variety of categories. Trader Joe’s ranked No. 1 overall.1 Consumer Reports ranked Trader Joe’s the second-best supermarket in the country in 2012.2 One year earlier, Fast Company named Trader Joe’s the 11th most innovative firm in the U.S.3Report structure
1) Up to 7 double-spaced pages of text,12-pt Times New Roman font with 1” margins on all sides, NO MORE THAN 7 PAGES!. No more than 4 pages of appendices, tables, graphs, diagrams, etc.
Answer the following questions in the analysis report:
1) Is the supermarket industry profitable? Conduct the 5 forces analysis to assess the profitability of the industry. Use the attached material, “5 Force Analysis.”
2) What are the key sources of Trader Joe’s competitive advantages? Identify the key sources of Trader Joe’s competitive advantage by analyzing a value chain analysis. What activities and choices in a value chain diagram enable the firm to create more value than most rivals? Conduct a value chain analysis to support your argument. Use the attached material, “Competitive Advantage”
3) What are the business-level strategy of Trader Joe’s and rivals (Whole Foods, Kroger, Supervalu) business level strategy? Cost leadership or differentiation? Identify each company’s business-level strategy and explain why. Include a comparative analysis by using the value creation framework (Trader Joe’s vs. Whole Foods,. Kroger, Supervalu). Does Trader Joe’s have an advantage over rivals?
• Hint: To conduct this analysis, use the financial information of Exhibit 2 as well as the case text. Use the attached material “Business-level Strategy”. 4) Does Trader Joe’s strategy that you identified in Q3 take advantage of the opportunities and neutralize/reduce threats identified in the industry analysis? If so, how?
5) What are the main threats to Trader Joe’s competitive advantage? Is their advantage
sustainable? Evaluate Trader Joe’s position using the RBV framework (valuable, rare, inimitable, sustainable?); also, evaluate their ability to retain customers.
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