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GASE T Il Troder Joe's

hile vacatioaing in the Caribbean, founder *Tradef

Joe Coulombe discovered a way to dif- furentiate his ?-Eleven-style coroer stores *om those of his competitors. Joe observed that con-

sumers are more likely to S newthingswhile on vaca tion. With a nautical theme and cheerftrl guides sporting Hawaiian shirts, Joe bassformed his stores into oases of vatue by replacins humdmrn sundries with exotic, one- of-a-kind foods priced persuasively belon' any reason- able competitor.l

For over fifty years, Trader Joe's has com- peted with such giants as Whole Foods and Dean & Dehea- So what is its recipe for success? The com- pany applies its pursuit of value to every facet of its operations. Buyers travel all over the world in search of great tasting foods and beverages. By focusing on nahrral ingredients, inspiring flavors, and buyrng direct from the producer whenever possible, Trader Joe's is able to keep costs dosn. The chain prides itself on its thriftiness and cost-saving measures, pro- claiming, 'I{e run a pretty lean ship,"'Every penny fire silve is a penny you sane," aad'Our CEO doesn't even harre a secretary."z

'When you look at food retailers," says Richard George, professor offood marketing at SL Joseph's University, there is the low end, the big middle, and then there is the cool edge-thafs Trader Joe's."3 But how does Trader Joe's compare with other stores with an edge, such as lfhole Foods? Both obtain prod- ucts locally and from all over the wodd. Each values employees and strives to offer the highest quality. However, there's no mistaking that Trader Joe's is cozy and intimate, whereas Whole Foods' spacious stores offer an abundance of choices. By limiting its stock and selling quality products at low prices, Trader Joe's sells twice as much per square fuot than other supermarkets.a Most retail mega-markets, such as Whotre Foods, carry betxeen 25,000 and 45,0fi) products; TraderJoe's stores only carry around 4,000.s But this scarcity benefits both Trader Joe's and its customers. According to Swarthmore profev sor Barry Schwartz, author of The Paradox of Choice: Why less Is More, "Giving people too much choice can result in paralysis- - - . [Rlesearch shows that the more options you offer, the less likely people are to choose any.av

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Despite &e figh&ated tone wggesM bly marketing oerials md insore adg TraderJods aggres. sively courb friendty, crffi oriented doyees by wdtingiob descriFisns highligfiling desirod soft skills ("ambitious and adremr- ouq enily sniling ad have a strons sense of vakres") as mucL as acfiral retail experienre.?

TriaderJoe's connects with its customers berause of tfte cul&re of product knordedge and cus$omer involvement that its manaepment cultivaies among store employees. TraderJoe's considens its re$pon- sible, knowledgeable, and tiendly ocrew" to b€ critical to its suc- cess. Therefore they nurfirre tlrcir employes xith a prcmotefrom- within phitrssophy.

Each employee is encouraged to taste and learn about the pro* ucts and to engage custorrers to share shat thq/ve experied. Most shoppers recall instanes whenhdpftd crew membere took the time to locate or recom mend particularitan* Says one employee,

"Our cu$m doa't just come here to buy a lodof lM- They cam do th# atryflrt€re.lhey conre to try nm ' irgs. Theycorc to seea ftieadlyhre.They corne becanrse ttey knor anr narc aad wetnortfueirrs Butmodof all, theycome becarsewe can tdlth wty not all Alae&on sabn has to qne tom Alxftr or fte difrerence betsoer a Shiraz ard a S:mah- The iox of kleas md infunatitm S&e sMe l€rdisalmays invigordig.{

When itcomes to showing ib rypreciation forits empbyees, TraderJoe's puts its moneywhere its mouth is. Those who workfor

Trader Joe's earn considerably more &an their counterparts at other chain grorers. Starting berr efitsiaclude medical, dental, and vision insurance, comFny-paid rctirenent, paid v-acatior, and a 10% emfloyee discount-e Being a privately owned company and a Iitfle media shy, TtaderJoe's has beenkeping some of itsfinancial infurmatioa confdential these days, but outside estimatcs suggest that managers make at least $ltrK per year"lo

Ouflet managers are highly compensated, substantially more fran at other retailerq parfy because they knos the ThaderJoe's sysfiem inside and out (managers are hired only tom ryittin the compary). Fufirre leaders enroll in training pmgrams such as Tr:ader

Ioe's University tiatfoster in them the loyalty necessayto run stores acmding to bothcoryany and customer expectatiors, teaching managers to imbue tkirpart- timers rrith the customer-focused afiihrde shop,pers Larve come to eryeclu

So it cane as a horrifying surprise lemzny of those shop pers thstTraderJoe's had a new nicloame'Tmitsr Joet." The asualty environmentally friendly companyfrred the rorstof t}te ndional chains on Gneerpeace's receutly rehased seafood sustain- ability scorecard. Greenpeace's study, Cartiry Awy tltc Oceass Hou Grocety Storxan Enigittg the Seas, ranked 20 wpermarket compnies by assessing their seafod policies and checked to eee wtellrerthey sold re&listed seafood-those that are overfshed and needto be conserved to ensure their suviYalu Greenpeare

surveys found TraderJoe's selling 15 of the 22 re&list seafoods.u In response to strong fuedback from its customers*and, no doubt, to a Greenpeacebuilt lookalike Traitor

/mb I[eb siie-Trader Joe's was quickto respond. The company pmmised to only offer sustainable seafood by the end of 2012, remove re&listed seafood tom its shelves, and improve its poduct labeling to pmvide consamers with more atru?te information about seafood pmducts.B

lVillTrderJoe's keep its pronr ises to consrmers, and will it pass tte costof doing so on to them?As buyersare increasiagly mindful of how and where each dollar is spent, TraderJoe's mayhave some tough choiesahead.

Discussion Glueslions

1. How does Trader Joe's design

iobs for increased job satidaction and high€rperformane?

2. In what wa:rs does TraderJoe's dernonstrate tlre importance of each rqonsibility in the marr agement pocess--plannirg, orgaizing, leading, and contuollins?

3. Describe the methods that shov TfaderJoe's knows the impor- tance of human capial

4. DoesTraderJoe's teponse to &te Tmitor Jds campai$ derp onstrate contingmcy &inking? lYhy orw&ynotl

5. Rmearch Question: What do 6re blogs and fi[rent news reports say? IsTlraderJoet a manage ment benchmark for others to follow? Ia what areas relsrant to Organizatioral Behnior does the firm have an edge on the compe{itisn? I

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