This is a fictional case study on how to use a SWOTT analysis when starting a new business or expanding an existing one. All information is fictional except the facts about Trader Joe’s. This is not a proposal to them, or anything based on inside knowledge. As far as I know, there are no plans to create Trader Jane’s. Don’t call Trader Joe’s and ask them when the new Trader Jane’s will be open. It won’t. Have I spelled it out for you?
This is a fictitious case study that exists solely for academic purposes and teaching a vital marketing concept, SWOTT analysis.
Trader Joe’s is a neighborhood specialized, unconventional, and interesting grocery store which is located in 23 states with over 250 stores. It is similar to Wild Oats and Whole Foods without the big price tag. Trader Joe’s is a privately owned and operated business that began in1967. Trader Joe’s specializes in delicious foods and beverages from the basics like milk, bread and butter to more exotic food like imported cheeses, organic produce and hand-tossed pizza fromItaly. Stated on the website, www.traderjoes.com, “We taste every product before we decide to sell it, and we guarantee you’ll like it” (Trader Joe’s [TJ], 2008). Not only does Trader Joe’s sample each product first before putting it into its stores, but consumers are encouraged to taste Trader Joe’s goods as well. Everyday Trader Joe’s has samples of different products to taste and an array from basic to exotic coffee’s to try while shopping. Wine tasting is offered every weekend to bring in a various groups of people to buy products at Trader Joe’s. Trader Joe’s is a creation of searching all over the globe for the most unique, great tasting food possible, while taking out the middleman in the same process, to be able to offer low prices to its consumers (TJ, 2008).
People are being more health conscious and aware of how processed and junk foods make them feel fatigued and how they are damaging their health. Trader Joe’s has become more popular to consumers because of the low price healthy food they sell. People are on the go more and more and need a way to have healthy food at a fast pace. Our marketing team has decided to open a new service of Trader Joe’s called Trader Jane’s.
The new service that Trader Joe’s is starting is a fast health food restaurant called Trader Jane’s with a drive- thru that will provide products from Trader Joe’s that are available in minutes, which are fresh and healthy without added hormones, pesticides, and preservatives. The hours and operations will be the same as Trader Joe’s 9 am to 9 pm. Trader Jane’s will have smoothies, fresh blended vegetable drinks, organic fresh fruits and vegetables, sandwiches and wraps made with hormone free deli meats and whole grain breads. Trader Jane’s will also have raw nuts and dried exotic fruits in small portion size amounts. Trader Jane’s has the option of dining in with a restaurant full of a Hawaiian scheme that reminds shoppers of the white sandy beaches inHawaii. The decor will include tiki huts as tables and juice bars, coconuts, torch lights, lilies, and anything you can think of that reminds you of Hawaii.
Trader Jane’s can take advantage of the Traders Joe’s name and reputation. This is a major strength in the markets where Trader Joe’s exists. Trader Joe’s is in 21 states and expanding at a controlled pace. This gives Trader Jane’s a geographical advantage over any smaller local or regional competitors. Trader Jane’s, like Trader Joe’s, is privately held with no franchises. This strength allows for centralized upper management while still permitting local modifications due to legal or client regional differences. Trader Jane’s will be selling products that already exist at Trader Joe’s and these products are perceived in the market as both high quality and priced competitively. The leadership at Trader Joe’s has consistently grown the business and expanded its market and client base.
While centralized management is a strength in many areas, there is a weakness as the company gets larger and expands outside its initial area. As the company gets larger they will have to build regional distribution centers and needs to plan for this eventual capital expenditure. Also, time differences and culture can become a factor; in the Northeast, people are more formal; in the South business tends to move slower. Trader Jane’s is inheriting the West Coast attitude and possibly may need to alter its marketing strategy to account for regional variations, this is more difficult with a centralized management team.
One of the primary marketing opportunities Trader Jane’s can capitalize on is making healthy food more readily available and cheaper than normal health food stores. Trader Jane’s can also take advantage of Traders Joe’s purchasing power and offer their products at a price point that is competitive with other major fast food restaurants. The drive thru concept is unique with very few health oriented drive-thru restaurants in theUnited States. Drive-thru’s certainly exist, and many offer some healthy alternatives, but most of the health-food restaurants do not offer any drive-thru service.
As the price of gasoline gets more expensive many consumers are cooking at home more and not getting in the car and driving to “pick-up” something to eat. The rise in wholesale prices of food is also a threat due to consumers having less money available for convenience items. Although a less serious threat, additional competition, from either a national fast food company or smaller local businesses, could lead to dilution of the market and price wars. This is probably not as big an issue because Trader Jane’s has unique products that are not easily copied. Probably the greatest threat is a fickle public. It is entirely possible that the market for health-foods is not interested in drive-thru, preferring to cook at home. Trader Jane’s is planning on an indoor dining area which should alleviate some of the drive-thru concerns.
Americans in general are eating less at home and relying on fast food restaurants for at least one meal per day. At the same time they are “pressuring restaurant companies to offer healthier restaurant menu options” (DiPietro, Roseman, & Ashley, 2004). In some cases, Trader Jane’s has specialty health items that are cheaper than can be made from scratch, appealing to both the cost conscious and the health conscious consumer. With the increasing cost of gas, many consumers are planning daily errands and not going out of their way to go shopping. Trader Jane’s, through proper placement, can capitalize on this trend.
DiPietro, R. B., Roseman, M., & Ashley, R. (2004). A Study of Consumers' Response to Quick Service Restaurants' Healthy Menu Items: Attitudes versus Behaviors. Journal of Foodservice Business Research, 7(4), 59-77. doi: 10.1300/J369v07n04-03.
Trader Joe’s (2008, n.d.). How Do You Do It Joe? Retrieved May 11, 2008, from http://www.traderjoes.com/how_we_do_biz.html