5 Forces Analysis

Running head: TRADER JOE’S COMPANY ANALYSIS 1

TRADER JOE’S COMPANY ANALYSIS 4

 

Trader Joe’s Company Analysis.

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· Trader Joe’s has been successful in business from the time the store was founded.

· The success is attributed to the business’s ability to differentiate itself from the rest of other company particularly their primary competitors (Sega, 2018).

· Joe’s company which is found across several parts of the United States, provides a wide range of distinct and unique private label products to esteemed customers (Investopedia, 2019).

Porter’s five forces.

1. Bargaining power of suppliers.

· Trader joe’s company has been among the best-known secretive companies that care to identify who, what, and where to receive their services and products.

· This uplifts the company’s bargaining power of the suppliers to higher levels.

· They have created their own unique and private-labeled products, further earning them high bargaining power (Investopedia, 2019).

· Their products are unique and can be fetched nor found elsewhere; this facilitates their low prices that offer the opportunity of high switching costs.

2. The threat of new entrants.

· In the joe’s company, the threat of new entrants is significantly low.

· Even if the switching costs are low with increased product distribution, channels are still there many challenges and barriers for new entrants’ entry (Ciment, 2019).

· The economies of scale are massive, especially when competing with superstores such as Walmart and Kroger.

· The threat of new entrants is also reduced due to the increased cost of buying stores that are large enough to start a business (Ciment, 2019).

3. The Bargaining Power of Buyers.

· Based on joe’s company business, its bargaining power is can be rated as moderate to low.

· Most of the target consumers for Joe’s company are educated individuals who perhaps are underpaid.

· Its product differentiation is significantly high (Ciment, 2019).

· Other buyers of Joe’s company include operated stores that have no bargaining power.

4. Rivalry among existing competitors.

· Joe’s company has a moderate level of rivalry.

· In 2013 the company’s overall growth doubled to nearly $ 10 billion.

· The company has steady growth in the industry due to less competition and creating a brand identity that other competitors could not match.

5. The threat of substitutes.

· Joe’s company’s level of threat of substitutes is significantly high because of the presence of many grocery products with small discounts.

· The existence of many grocery substitutes for Joe’s products increases price competition as well as high switching costs (Ciment, 2019).

· This forces the joe’s company to lower their product prices so as to retain a large customer base (Ciment, 2019).

 

References

Ciment, S. (2019, August 15). Why Trader Joe’s Is Loved by Customers: Theme, Price, Quality. Retrieved from https://www.businessinsider.com/why-customers-love-trader-joes-quality-price-2019-8?IR=T

Investopedia. (2019). Cost-Volume-Profit (CVP) Analysis Definition. Retrieved from https://www.investopedia.com/terms/c/cost-volume-profit-analysis.asp

Sega, B. (2018, June 22). These Are the Things You Should Never Buy at Trader Joe’s. Retrieved from https://www.cheatsheet.com/culture/these-are-the-things-you-should-never-buy-at-trader-joes.html/