Trader Joe’s has a unique competitive advantages. Not like other retail stores, Trader Joe’s aims to provide an extraordinary shopping experience unable to be found anywhere else in the perspectives of the following key sources. Trader Joe’s keep its operating cots low by staying low-tech, which is there are no self-checkout lanes. The location of the stores are at low-cost position with small parking lot or no parking lot at all.
Whole Foods Market Inc.
Every business has competition. Understanding the strengths and weakness of the potential competitors is the way to make sure the company survives and grows. It is also the way to seek opportunities and the method to develop the company. The three potential competitors are Whole Foods Market Inc., The Kroger Co and Costco Wholesale Corporation.
Whole Foods Market Inc. was founded in Austin, Texas. The company was established in New Orleans in October 1974. The mission at that time was to be a grocery store that is not only unique and healthy, but also excellence in food retailing. It is the largest natural and organic foods supermarket in the United States. It was the first national “Certified Organic” grocer. It offers more than 25,000 unique organic products, which including dairy, meat, frozen, prepared foods, wine, cheese, vitamins, nutritional supplements, and pet foods. The company has one operating segment, natural and organic food supermarkets.
Whole Foods Market Inc. has the highest quality standards. The company believes that its high quality standards set it apart from other supermarkets. This way, the company could attract and maintain a broad base of loyal customers who return to the store more often. Compare to other supermarkets, Whole Foods is not using any common elements that can find in other supermarkets which include no artificial favors, colors, sweeteners, hydrogenated fats, or meat from animals raised with antibiotics. In Whole Foods stores, customers only can purchases eggs from cage-free hens, and they forbid many manufacturing, farming, fishing, and ranching that does not meet their standards. Other supermarkets are offering cheaper products, but the quality is below the goods from Whole Foods. The company has the ability to offer high quality products at a higher price. The way the company to attract customers is because many customers are willing to pay the higher price for better quality food. The customers who go to Whole Foods stores are having higher incomes, and they are willing to pay a little bit extra for a healthier life. Whole Foods Market Inc. also have the benefit from several trends in the food market industry. During the past years, the company have risen their the role of awareness of healthy eating plays in long-term wellness. It came out the company has good sells and profits. Whole Foods Market have continue to use this benefit to influence the younger generations. Now younger customers have the value that not only eat healthy, but also care about the ethical trade. These consumers start to care about how and where the product is produced.
Whole Foods Market Inc. has the weakness of depending mainly on the United States market. It makes the company assailable to the economic changes in the United States. The company have the strength about the high quality standard, the downside of these will be the high prices. It will make Whole Foods lose some potential consumers which are price-sensitive consumers who would rather buy the cheaper products. Whole Foods also has a limited networks of suppliers since the company have a high standard of the products. This could influence the opportunities for the company to expanding its operations.
Whole Foods Market has successfully build its brand-image. The opportunities for the company is to expand the business globally. The growth proportion of the population that are interested in natural, organic products has increased all around the world. The company could catch this opportunities to expand to other countries, such as, Canada and United Kingdom. Whole Foods Market also launched stores named ‘365’ which is aiming at providing similar product line of foods at a lower price. To adjust the price of the products would attract more and more consumers.
Whole Foods Market have many competitors that have low-cost products, for instant, Walmart, Wegman’s and etc. These companies attracts consumers based on the low prices with the similar products that Whole Foods offers. In addition, there are more and more stores offer organic and health food with lower prices. The company would lose customers because of that. Beside that, there are negative voice about Whole Foods has a high prices. The company had also faced other challenges, such as overcharging customers. These would hurt the brand image of the company.
The Kroger Co
The Kroger Co was founded by Bernard Kroger in Cincinnati, Ohio. It is the largest traditional grocer, however, Walmart is taking the chain as the nation’s years ago.
Costco Wholesale Corporation
To maintain Trader Joe’s unique culture and keep the feeling of “neighborhood market” would be considerable for the company to expands into new markets. The culture of Trader Joe’s is an integral experience for both customers and employees.