Taking A Look At Trader Joes

Case for Analysis - Option 2

Niche markets have an opportunity to differentiate from other stores that offer similar goods and services. It is through differentiating that a company can prevail and become profitable; however, it can also lead to a smaller market segment which can reduce volume sales. Small convenience markets are located on innumerable corners across every town; consequently, the majority sell similar goods and competition is fierce. Large chain supermarkets such a 7-11 have bulk buying power which, enables it is sell goods at a lower cost and still make a profit. The bulk buying power can create a competitive edge that smaller locally owned shops cannot compete with. Smaller chains have to rely on premium locations or niche

What sounds like a trip down the Napa Valley could now be found in area far from any pricey California winery. In fact, Trader Joes is more of a hybrid convenience store and supermarket. The niche markets that Trader Joes is known for have less than a tenth of the SKU’s a grocery store would have; however, it is able to negotiate superb discounts on larger quantities of fewer items without charging for shelf space (McNeal, 2013). This enables Trader Joes to remain competitive against larger big box stores on certain items and differentiates against the simple snack and go mentality of a typical small convenience store or gas

The incredible success Trader Joe’s created, also means there are others trying to crack into its market with similar design characteristics. In fact, it now has competition from other supermarkets including Sprouts, Vons Supermarket, and Whole Foods; consequently, it has Whole Foods 365 right on its tails in regards to price and quality (Peterson, 2016). Regrettably, once a success is recognized, it is often the target of mimicking and attempts to clone it. In fact, this is true with numerous other aspects in life ranging from, new technology and features on automobiles. If consumers are buying something, manufacturers want to know how and why. For these reasons, it is imperative to continue to adapt and monitor the market place to be vigilant against threats to market share (Jindal, Sarangee, Echambadi & Sangwon, 2016). In the case of Whole Foods 365, Trader Joe’s will require ample efforts to minimize the effect and threat it and others will