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2-1 Consulting Report: Insights from Trader Joe’s
Dustin Calvert
Southern New Hampshire University
MBA 500: Building Business Leaders
Dr. Jarrett Walton
June 19, 2022
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The following consulting report has been drafted to analyze Key Performance Indicators
(KPIs) to measure success in Trader Joe’s strategic and operational objectives. This report also
interprets the results of a Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis of
Trader Joe’s business model.
Strategic Thinking versus Operational Thinking
Strategic and operational plans are essential to any organization’s success. These distinct
plans serve unique purposes yet are symbiotic in nature. Strategic plans establish the trajectory of
long-range tactics for an organization, while operational plans guide the short-term actions to
satisfy the vision of strategic plans. Reflecting on a case study of Trader Joe’s, I have identified
KPIs that can be used to measure progress towards their strategic and operational goals.
One Strategic KPI
Product Introduction Rate. The average Trader Joe’s introduces 10 to 15 new items every
week (Orr, 2006). This reflects that individual Trader Joe’s locations are appropriately
responding to or anticipating their customers’ interests. Trader Joe’s provides its customers with
a unique shopping experience every visit by “…making each product fight for its place on the
shelf” (Schermerhorn & Bachrach, 2020, p. 390).
One Operational KPI
Sales Per Square Foot (SPSF). In 2016, Trader Joe’s revenue reflected $1,750 SPSF
(Rohith, 2021). Its nearest competitor, Whole Foods, only reported $783 SPSF (Orr, 2006). The
sales and revenue enable Trader Joe’s to execute its strategic vision by giving stores the
flexibility to invest in new products appropriate for their location while maximizing space.
SWOT
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“[SWOT] is an internal analysis of organizational strengths and weaknesses as well as an
external analysis of environmental opportunities and threats” (Schermerhorn & Bachrach, 2020,
p199). The organization’s strengths and weaknesses reflect what sets them apart from its
competition. It is equally important to understand the operating environment. These external
factors, if capitalized upon, can provide an organization with an advantage over its competitors;
if misinterpreted or ignored, they can distract an organization from its strategic goals.
SWOT Result
T Joe’s: SWOT Analysis
Strengths Weaknesses
Example: "high value per cubic inch; high
rate of consumption; easily handled; and
something in which [Trader Joe’s] could be
outstanding in terms of price or
assortment" (Matus, 2021).
These original Four Tests established by
founder Joe Coulombe have always guided
its focused stock strategy. The Four Tests
have been the key to Trader Joe’s agility.
Example: “The word of mouth is such that
the advertising budget can be small, at 0.2%
of sales, against 4% for a supermarket”
(Orr, 2006).
Reducing the investment in advertising
removes inhibits Trader Joe’s from
controlling its own narrative. If public
opinion turns sour against Trader Joe’s, the
advertisement infrastructure does not exist
to reel customers back.
Opportunities Threats
Example: "We went into private label
because of the value opportunity so we
could put our destiny in our own hands"
(Orgel, 2006).
The decision to develop a private label has
proven invaluable by fostering customers’
confidence in the Trader Joe’s name and
experience.
Example: “Most Trader Joe's products are
sold under a variant of its house
brand…"Trader Giotto's" … "Trader Jose's"
… "Trader Darwin's," and so on"
(Schermerhorn & Bachrach, 2020, p. 390).
If judged as guilty of cultural appropriation
by a jury of its customers, this verdict has
the potential to drive its entire customer
base to its competitors.
If ABC Beauty Company is to succeed as the world’s leading provider of health and
beauty products, understanding itself and its environment is critical to eliminating blind spots
and developing cohesive, actionable plans for its strategic and operational objectives.
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References
Matus, V. (2021). 'Becoming Trader Joe' Review: The Secrets of His Success;Wall Street
Journal (Online) https://ezproxy.snhu.edu/login?qurl=https%3A%2F
%2Fwww.proquest.com%2Fnewspapers%2Fbecoming-trader-joe-review-secrets-his-
success%2Fdocview%2F2563308104%2Fse-2%3Faccountid%3D3783
Orgel, D. (2006). Trader Joe's President Shares Secrets of Success.SN: Supermarket
News,54(6), 28.
https://ezproxy.snhu.edu/login?url=https://search.ebscohost.com/login.aspx?
direct=true&db=bsu&AN=19832691&site=eds-live&scope=site
Orr, D. (2006). The Cheap Gourmet.Forbes,177(7), 76-77.
https://ezproxy.snhu.edu/login?url=https://search.ebscohost.com/login.aspx?
direct=true&db=bsu&AN=20296640&site=eds-live&scope=site
Rohith, K. R. (2021). Trader Joe's Business Model of "Less is More".
https://thestrategystory.com/2021/09/19/trader-joes-business-model/
Schermerhorn & Bachrach. (2020).PManagementP(14th ed.). Wiley Global Education US.
