Trader Joe's: Strategies for Winning Over Clients and Growing to $10B+ Annually - Essay Sample

Introduction

Trader Joe's has put in place strategies that have enabled it to effectively win over clients through the employment of an operating model that is well-aligned with their primary business strategies. The odd-naming of its products, seemingly motivated staff and the beautifully decorated stores, for example, are well-coordinated elements included in a plan that has seen Trader Joe's grow into a retail outlet now generating over $10B annually from more than 450 stores within the country (Ager & Roberto, 2013). The stores are also highly esteemed among their clients. Trader Joe's secret of success relies on an operating model well designed to serve its business model and to enhance clients' value proposition. The primary strategy employed by Trader Joe is quality service by way of warm, committed and friendly employees. Coupled with this is the decision to offer quality products (Ager & Roberto, 2013).

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Trader Joe's Core Skills

The retailer has, over the years, engaged in investing in its employees. Trader Joe's values a lot its customers and the services offered them; hence it is spending a lot of resources in coming up with a team that can successfully ensure this. There is also the element of cross-training, which makes it possible for an employee to serve in any work station (Ager & Roberto, 2013). The employees are efficient at explaining the uniqueness of the products on offer. They do this using astute point-of-sale signage on the shelves employees have created. Such investment in human resources has seen an employee turnaround of just about 4%. All these directly relate to the firm's objective of quality service through a staff that is friendly, warm and committed (Reeves, Love & Tillmanns, 2012).

Trader Joe's Competencies

One notable competency of the retailer is its quick product turnaround. Given that the retailer has a lower Stock Keeping Unit (SKU), at 4,000 as compared to other competitors that mostly carry about 50,000 SKUs) (Ager & Roberto, 2013). The move has seen the retailer create a direct relationship with its suppliers; hence they can cycle in new products very fast to satisfy its clients. They are also able to stock more of staple products, as the less popular ones get replaced. The retailer also employs the mass media to promote its goods (mainly the seasonal and new products). Such intense attention to product availability is a good pointer to the firm's goal objective of offering products of high quality to its consumers (Magretta, 2012).

Trader Joe's Capabilities

The capability of a firm is about the physical resources and infrastructure at its disposal. Trader Joe's has maintained originality. Their ability to rotate product shelves and placement. They also have unique products sourced from various locations and cultures. The practice has seen the firm raise the bar on innovation and creativity (Wolfe, 2011). . The firm also can acquire products directly from its suppliers, hence minimizing the cost, length and time spent on the supply chain. The value chain can also be well enhanced, given that the perishable products are taken care of in such an arrangement. The result has also been the ability of the retailer to sell at discounted prices, hence remaining competitive.

Conclusion

For the discussion above, the three aspects of corporate strategy are all intertwined. For example, the capabilities of a firm rely on the skills employed by someone. An effective strategy is a product of both skills and resources. It is therefore imperative that the competencies, capabilities and expertise in an organization be analyzed, and how the relationship between these three can help put at bay the external threats, reach out for the opportunities, and explore different markets in value creation.

References

Ager, D. L., & Roberto, M. A. (2013). Trader Joe's. Harvard Business School Publishing.

Magretta, J. (2012). Creating Value: The Core-Staking Out Your Company’s Unique Competitive Position Using Michael Porter’s Elements of Strategy. In Understanding Michael Porter: The Essential Guide to Competition and Strategy, (pp. 1-29). Boston: MA: Harvard Business Review Press.

Reeves, M., Love, C., & Tillmanns, P. (2012). Your strategy needs a strategy. Harvard Business Review, 90(9), 76-83.

Wolfe, N. (2011). The Living Organization: Transforming Business to Create Extraordinary Results. Encounter. Quantum Leaders Publishing.