Trader Joe's Competitive Strategies

Introduction:
The supermarket industry has emerged over last five decades, resulting in decrease in market share. Different Competitive strategies are currently applied in the whole industry. As the competition is growing and market share is decreasing, this case study is focused on Trader Joe’s and its competitive strategies and sustainability over the time. This study compares Trader Joe’s to specific industry competition in line with its current strategies. This case study will be based on four questions. The first, analysis of challenges in supermarket industry in United States in terms of profitability. The second, a review of how firms in the supermarket industry make money, while focusing on their unique competitive strategies. The

The advantages which Trader Joe has in supply chain include; purchasing of large quantities, driving the price down, sourcing product globally and expect vendors to be secretive about agreed upon product prices. In addition to this inbound logistics continues to create a competitive advantage. Trader Joe’s also restocks shelves which give advantage to consumers to have the product all the day. Locations of Trader Joe are in suburban areas which gives cost economies to the supermarket. Marketing is also distinctive from market. They don’t run any TV ads but only focus on Flyers which are cheaper in cost. They do not have a customer loyalty-card program or accept coupons. Trader Joe’s is not present in social media and believe in verbal marketing from loyal

However, there are threats to this competitive advantage. Wal-Mart and other stores have experimented with smaller locations throughout the country. Current threats include; increased rivalry within the industry, copying the Trader Joe’s strategic model, lack of technology/online presence and substitute brands. Tesco was unsuccessful in the United States that does not mean that other industry competition will not try and imitate or copy the Trader Joe’s concept. Other threats include new competition, local co-ops, e-commerce (Amazon) and a shift in consumer preference. Trader Joe’s has resisted increased technology in the stores and has little presence on social media (mostly customers). This has the potential of becoming a threat to Trader Joe’s competitive advantage, as e-commerce and social media use expands globally. The threat of substitute and brand name products is also a concern for Trader Joe’s and the current competitive advantage. Brand loyalty is significant, Trader Joe’s does not stock a significant amount of name brand products in stores and this could become a strategic threat in the future. An additional threat is corporate