BU481 Lecture Notes - Lecture 12: Niche Market, Whole Foods Market, Kroger
BU481
Trader Joe’s Cot.
Analysis
• Buyer power – high
• Supplier – some medium, high for CPGs, but all others are low
• Substitutes – medium/high
• Rivalry – High
• Threat of Entry – Low
• Trends – healthy eating, technology
What would you do to enter?
• It’s a ihe arket that ou ould eed to fid
o Specific target market like organics
o Product offering needs to be differentiated
• Merge or acquire
• Focus on shopping experience, rather than just price and food
• Need to develop customer loyalty
KSF
• Location
Financial
• Walmart: 200, WF: 1250, Traders: 2054
• Thin profits – WF: ROA 8% NIM 3.5%, Kroger: NIM 0.7% ROA 2.5%
• 1/10th SKU average
Strategy
• As a whole it is differentiation
• Agaist Walart, it’s differetiatio
• Agaist Whole Foods, it’s ost
Product Market Focus
• Customer segment: overeducated but underpaid
• Core activities:
o Managing supply chain
o Customer service
o No marketing – newsletter rather than coupons, low cost, talk on radio about products
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Document Summary
Trader joe"s co(cid:374)t: buyer power high, supplier some medium, high for cpgs, but all others are low, substitutes medium/high, rivalry high, threat of entry low, trends healthy eating, technology. Financial: walmart: 200, wf: 1250, traders: 2054, thin profits wf: roa 8% nim 3. 5%, kroger: nim 0. 7% roa 2. 5, 1/10th sku average. Strategy: as a whole it is differentiation, agai(cid:374)st wal(cid:373)art, it"s differe(cid:374)tiatio(cid:374, agai(cid:374)st whole foods, it"s (cid:272)ost. Product market focus: customer segment: overeducated but underpaid, core activities, managing supply chain, customer service, no marketing newsletter rather than coupons, low cost, talk on radio about products. Exclusive, cheap chic, adventure, fun, good service and customers: custo(cid:373)ers go there (cid:271)e(cid:272)ause it"s (cid:271)etter tha(cid:374) i(cid:374) ter(cid:373)s of reputatio(cid:374) tha(cid:374) wal(cid:373)art, new products give you choice, new perspective, unique experience, hawaiian theme, employee dynamic is different. Goals: keep expanding (1 store/year, keep introducing products, maintain customer and employee experience (hard to measure)
