Question

Describe Trader Joe's key business functions (excluding "logistics") and the functional strategies as they relate to the overall business strategy. You may find that the firm's functions and strategies are clear and appropriate, but you may find that they are not. Either way, explain the rationale for your conclusions.

Answer 1

Trader Joe's follows an unorthodox approch to it's business functions and strategies. This unique concept keeps Trader Joe's apart from the other groceries stores.

Let's discuss the main business strategies of Trader Joe's which impacts the overall business:

1) Perfect product knowledge

• Trader Joe's follows the concept of perfect product knowledge i.e. each employee working for the store from low level employees to managers, have a deep knowledge of products offered.
• This perfect knowledge helps the employees to use the expertise to the extent.
• This perfection of product knowledge helps the employees to resolve customer's issues or confusion.
• Having this kind of perfect knowledge about the products enables the employees to advice customers for the better products and thus resulting in sale.
• Strong relationship is built by the employees with the customers facilitating future sales.
• If some employees are not in retail even they can share their business wisdom and expert knowledge about the products via blogs, videos, tweets, guest posts to woo the customers.

2) Focus on customer satisfaction and retention

• Unlike other companies Trader Joe's doesn't focus on just getting more and more customers.
• Trader Joe's focusses on the utilization of resources to increase expense of current customers every visit of the store.
• By following this approach seller- buyer relationship improves and there is a kind of delight between employees and customers.
• This approach leads to stronger customer retention.

3) Slow and steady wins the race

• Trader Joe's may open many supermarkets in every city but it follows tortoise approach.
• Trader Joe's opens only about three dozens stores every year thus giving a halt on the fast pace to foresee the future.
• Having few Trader Joe's stores creates a brand value and it also avoids the charm from diluting.
• By following this strategy company can pay it's employees and staff stores well.

Thus by following these main business functions and strategies especially related to marketing, sales, customer Service & satisfaction and employee satisfaction, Trader Joe's is showing that by following unorthodox strategies a business can get the success.

After describing the business functional strategies for Trader Joe's, I found following conclusions with reasons or rationale:

• Product knowledge is very important for an employee to present the product perfectly before the customer. So, it's appropriate.
• By having strong product knowledge an employee can understand the customer's point of view in a better way and can advice the customer for the better product. This creates a bond of trust and results in customer retention. Approach is appropriate.
• Confidence is the key for better sales. Employees with confidence in their products can sale upto maximum.
• Existing customer retention and satisfaction is a very good approach to follow that Trader Joe's is following to increase sales.
• According to me focus on new customers is also very important because business means more sales and more sales needs more customers. So, this approach should also be followed by Trader Joe's to some extent.
• New customers convert into the existing customers in future so, this approach should also be focused.
• To create brand value and continuous cham of products, Trader Joe's is following tortoise approach by opening limited stores. This is appropriate.
• Business means expansion and expansion stands for more stores in the cities. This increases the customer reach thus resulting in increasing sales numbers. It's kind of fast pace or hare approach. Trader Joe's should follow the hare approach to some extent to be in the competition for a long run.
• More stores in more cities with hare approach and tortoise approach in different scenarios may lead Trader Joe's to a trusted and famous brand name in the country and it can foresee it's bright future.
• Big brand with more stores may lead to employee trust and customer value addition. Trader Joe's may follow this strategy too.

So, these are some conclusions with logic for the business functions strategies for Trader Joe's.

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