1. After reading the Trader Joe’s article, I came to the conclusion that they follow a
focused hybrid strategy. They are big on providing different and unique products
that not all supermarket stores offer. Despite having a fraction of the SKUs that
normal supermarkets have, Trader Joe’s is known for selling private label items
specific to the company. This could be considered both an advantage and
disadvantage since common brands like “Coca-Cola” are not found at Trader
Joe’s. In order to make their business strategy a hybrid, Trader Joe’s is also very
cost conscious and takes pride in offering their customers low prices. Despite
the fact that they don’t pay unnecessary costs for advertising, they make sure to
pay their employees well. This causes their employees to enjoy their job and stick
around for a long time. It’s been found that if employees enjoy their job,
customers are more likely to have a pleasant experience while shopping with
them. The reason their hybrid strategy is focused, is because they offer items
that appeal to a certain customer base. They have found that 80% of their
customer base comes from “educated and underpaid people”. Their goal is to sell
their products to people with sophisticated tastes, who also like a good bargain.
They wanted to offer products that are not normally found at an everyday
supermarket in an attempt to target a specific customer base.
2. I would say the two most important aspects of Trader Joe’s hybrid strategy are:
their employees, and their diversity of products. Something I found odd while
reading the article, was that most employees enjoyed working for this company. I
only find it odd, because it is a supermarket and I don’t know of a lot of people
that want to or enjoy working at a supermarket. A big thing for Trader Joe’s is to
keep their employees happy. When employees are happy, this causes them to be
more receptive and pleasant to customers. As I mentioned earlier, Trader Joes’
strategy is a hybrid of both cost leadership as well as differentiation. Employees
would certainly tie into the cost leadership aspect of the business strategy. While
Trader Joe’s watches their expenses when it comes to marketing, they make sure
to treat and pay their employees well. Because they are so cost efficient in other
areas of the company, they are able to put those extra savings to providing a
decent wage for all of the people who work there. Happy employees is something
that Trader Joe’s is known for which means many customers have been aware of
this. A main goal for the company is to provide their products at a reasonable
price, which also draws customers into the store. Another important aspect of
Trader Joes’ business strategy is the diversity of the products they offer. While
they don’t sell nearly as many products as larger supermarkets, they take pride in
their products being different. They are known for their wines, their coffee beans,
and random specialty items you would have trouble finding anywhere else.
Product differentiation is key to their success because that is what brings
customers in the door.
Having knowledgeable and content employees, as well as selling a wide range of
products is what enables Trader Joe’s to hold a competitive advantage over its
competitors. In order to maintain a profitable business, you need to make sure you are
