1. In what ways does Trader Joe’s demonstrate the importance of each responsibility in the management process – planning, organizing, leading and controlling?
2. This is a German company operating in America and sourcing products from around the world. What are the biggest risks that international ownership and global events pose for Trader Joe’s performance effectiveness and performance efficiency?
3. In a casual and nontraditional work environment like the one at Trader Joe’s, what are the keys to a team leader or supervisor becoming an effective manager?
4. Study news reports to find more information on Trader Joe’s management and organization practices. Look for comparisons with its competitors and try to identify whether or not Trader Joe’s has the right management approach and business model for continued success. Are there any internal weaknesses or external competitors or industry forces that might cause future problems?
Trader Joe’s didn’t always stand for brie and baguettes at peanut butter and jelly prices. In 1958, the company began life in Los Angeles as a chain of 7-Eleven–style corner stores. Striving to differentiate his stores from those of his competitors in order to survive in a crowded marketplace, founder “Trader” Joe Coulombe, vacationing in the Caribbean, reasoned that consumers are more likely to try new things while on vacation. He transformed his stores into oases of value by replacing humdrum sundries with exotic, one-of-a-kind foods priced persuasively below those of any reasonable competitor. In 1979, he sold his chain to the Albrecht family, German billionaires and owners of an estimated 8,400 Aldi markets in the United States and Europe.
Th e Albrechts shared Coulombe’s relentless pursuit of value, a trait inseparable from Trader Joe’s success. Recent annual sales are estimated at $8.5 billion, landing Trader Joe’s in the top third of Supermarket News’s Top 75 Retailers. Because it’s not easy competing with such giants as Whole Foods and Dean & DeLuca, the company applies its pursuit of value to every facet of management. By keeping stores comparatively small—they average about 10,000 square feet—and shying away from prime locations, Trader Joe’s keeps real estate costs down. Th e chain prides itself on its thriftiness and cost-saving measures, proclaiming, “Every penny we save is a penny you save” and “Our CEO doesn’t even have a secretary.”
Trader Giotto, Trader José, Trader Ming, and Trader Darwin Trader Joe’s strongest weapon in the fi ght to keep costs low may also be its greatest appeal to customers: its stock. Th e company follows a deliciously simple approach to stocking stores: (1) search out tasty, unusual foods from all around the world; (2) contract directly with manufacturers; (3) label each product under one of several catchy house brands; and (4) maintain a small stock, making each product fi ght for its place on the shelf. Th is common-sense, low-overhead approach to retail serves Trader Joe’s well, embodying its commitment to aggressive cost-cutting. ………………………
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