Supplement for Trader Joe’s case study: Value chain of activities template
Current Skills, Competencies and Capabilities of Trader Joe’s
Note: Do the best you can to find information about Trader Joe’s and the U.S. Food retailing/supermarket industry in the Walden library. There is some very good information available, even though the company is private. Where you feel you do not have good information about a specific skill, competency or capability, just “infer” or make a reasonable estimate on your rating and reasoning. Making reasonable estimates is a part of strategy thinking: being able to model based on imperfect information, and to make hunches that you can defendreasonably.
| Key Area for Analysis | Response with Evidence Documentation | Notes |
| SKILL CALL OUTSAre there any individuals, who, by themselves, have skills that are critical to the success of the company (think Steve Jobs)?Who are these individuals, what are their roles in the company?What critical skills to they possess that are of strategic value to the company?How hard would it be to replace these individuals? | Individual 1: 8Joe Coulombe, Founder of Trader Joe’sInspiration drawn from political climate at the moment, focus on environmental conscientiousness and niche products. Placed locations in areas populated with key demographics, students and “overeducated and underpaid” people. Had a very associate centric culture, sparking internal motivation to perform well.Individual 2: 7John Shields: Second CEO of Trader Joe’s. Expanded Trader Joe’s by reaching into previously untapped markets while still keeping the well-educated /underpaid mission alive. Individual 3:8Dan Bane: Current CEO of Trader Joe’s. Expanded to 400 stores. Keeps the original mission alive by resisting technology switch to self-scan lanes. Focus is on hiring the right people, allowing the atmosphere of the store to remain consistent across markets | Ave: 7.6 |
| COMPETENCY & SYSTEMS CAPABILITY CALL OUTS:How good is the company in the following areas:If the competency, or capability is “World Class” (clearly best in industry and could be benchmark for other industries), rate the item a 10.If the competency, or capability is “Industry Best” (clearly number one or two in the industry), rate the item an 8.If the competency, or capability is “Industry Average”, rate the item a 5.If the competency, or capability “Needs Improvement”, rate the item a 3.If the competency, or capability is a “Critical Deficiency”, rate the item a 1.Explain in detail your reasoning for how and why you scored as you did, and provide documentation (references). | GENERAL MANAGEMENT FUNCTIONSInformation Systems: Rating:8Explanation- Focus is on maintaining the small town classic feel of a grocery store, without labor cutting self-check lanes and electronics sales. The emphasis is on good quality consumable items, not distraction items.HRM Performance Management Systems (Metrics, Evaluation): 8Culture is all about hiring the right people, and while there was no specific information about the systems used, Trader Joe’s is one of Forbes Top 50 Places to work. HRM Systems Related to Talent Acquisition : 8While I am not sure what systems are used to hire, but I have never once seen an employee at any Trader Joe’s who did not seem genuinely happy to be there. While I realize it is their job to do so, it usually pretty easy to tell if employees would rather be elsewhere.HRM Systems Related to Talent Retention: 8Trader Joe’s offers both part time and full time employees several benefits, which is not the industry standard. Also, they are known as paying their employees fairly, which lends to initially hiring good people and treating them well leads to keeping them.Accounting Systems: 7There are no specific details on the accounting structures in place, but the company has continued to expand and remain profitable, leading me to believe that they must have strong accounting in place.Other General Management Functions (as you identify them) | 7.8 |
| COMPETENCY & SYSTEMS CAPABILITY CALL OUTS:How good is the company in the following areas:If the competency, or capability is “World Class” (clearly best in industry and could be benchmark for other industries), rate the item a 10.If the competency, or capability is “Industry Best” (clearly number one or two in the industry), rate the item an 8.If the competency, or capability is “Industry Average”, rate the item a 5.If the competency, or capability “Needs Improvement”, rate the item a 3.If the competency, or capability is a “Critical Deficiency”, rate the item a 1.Explain in detail your reasoning for how and why you scored as you did, and provide documentation (references). | INNOVATION, RESEARCH, DESIGN, PRODUCT DEVELOPMENTApplied Research (Store location selection and acquisition): 8Trader Joe’s keeps rental costs low by lending preference to smaller locations in already existing buildings, usually in strip malls. Inhabiting existing buildings allows visibility in the community, lowering the need for marketing. This also helps eliminate vacant real estate in the focused communities, keeping the market value up.Product Development/Selection: 7Trader Joe’s has focused their product line on the same values they use to run their business operationally. It is questionable that there is a shroud of secrecy covering where their line is produced. Also, while it is great that there are so many new products to choose from weekly, it is unfortunate that products are sacrificed in their wake. Team-Based Innovation in General: 8There are no specialists at Trader Joe’s. No employee has a specified job, everyone floats and has a working knowledge on all of the operations. This helps to boost morale, as no day is the same. | Ave: 7.6 |
| COMPETENCY & SYSTEMS CAPABILITY CALL OUTS:How good is the company in the following areas:If the competency, or capability is “World Class” (clearly best in industry and could be benchmark for other industries), rate the item a 10.If the competency, or capability is “Industry Best” (clearly number one or two in the industry), rate the item an 8.If the competency, or capability is “Industry Average”, rate the item a 5.If the competency, or capability “Needs Improvement”, rate the item a 3.If the competency, or capability is a “Critical Deficiency”, rate the item a 1.Explain in detail your reasoning for how and why you scored as you did, and provide documentation (references). | MARKETING, SALES, SOCIAL MEDIAMarketing: 3There is very limited marketing for Trader Joe’s, mainly the Fearless Flyer program, which isn’t really a sales ad but more of a newsletter. I have never seen or heard another advertisement for Trader Joe’s.Sales, Promotions: 5The focus is on everyday low prices, as the limited product line offering cuts out the middleman. While this may work for this concept, consumers who shop in part for the rush of the coupon saving are likely to opt out of Trader Joe’s offering.Social Media Elements of Marketing: 1Trader Joe’s doesn’t have any social media accounts, leaving them at a serious disadvantage in this Twitter age.Other Marketing, Sales, Promotion, PR elements (add as required) | Ave: 3 |
| COMPETENCY & SYSTEMS CAPABILITY CALL OUTS:How good is the company in the following areas:If the competency, or capability is “World Class” (clearly best in industry and could be benchmark for other industries), rate the item a 10.If the competency, or capability is “Industry Best” (clearly number one or two in the industry), rate the item an 8.If the competency, or capability is “Industry Average”, rate the item a 5.If the competency, or capability “Needs Improvement”, rate the item a 3.If the competency, or capability is a “Critical Deficiency”, rate the item a 1.Explain in detail your reasoning for how and why you scored as you did, and provide documentation (references). | INBOUND LOGISTICS Product Procurement and Purchasing: 8Trader Joe’s offers a wide range of specialty products that can’t be found at traditional grocery stores. In-Bound Shipping and Receiving : 5There was not any information on how the shipping process works, so I would guess that they are as good as anyone else in the industry.Warehousing and Inventory Management (SKU management with procurement, spoilage management): 5Trader Joe’s does not utilize a warehouse. Other Inbound Logistics elements (add as required) | Ave: 6 |
| COMPETENCY & SYSTEMS CAPABILITY CALL OUTS:How good is the company in the following areas:If the competency, or capability is “World Class” (clearly best in industry and could be benchmark for other industries), rate the item a 10.If the competency, or capability is “Industry Best” (clearly number one or two in the industry), rate the item an 8.If the competency, or capability is “Industry Average”, rate the item a 5.If the competency, or capability “Needs Improvement”, rate the item a 3.If the competency, or capability is a “Critical Deficiency”, rate the item a 1.Explain in detail your reasoning for how and why you scored as you did, and provide documentation (references). | OPERATIONS, PRODUCTION, SERVICE PROVIDINGOperations: Stock Levels and Replenish Systems, Freshness of Food, Look and Feel of Store, etc.: 5Unlike traditional grocery stores there is no fresh meat or produce and the focus is on frozen food items. It can also be inconvenient when they stock shelves during business hours. As a consumer, I do not like to see these things or have to try to shop around them.Service Providers: This includes all non-sales competencies that are “customer facing” (floor stockers, help center, butcher, baker, other specialty centers): 8All employees I have encountered at Trader Joe’s have been very pleasant and accommodating.Point of Sale Systems and Check Out Experience: 5Smaller locations mean less checkout lanes that sometimes get backed up and have long wait times, just like any store.Non Food Operations: 8Trader Joe’s has a great selection of personal care items that cannot be found anywhere else.Cross Functional Coordination to provide Service: 8A focus of Trader Joe’s is no specialists, so cross training is a requirement.Other Production/Operations elements (add as required) | Ave: 6.8 |
| COMPETENCY & SYSTEMS CAPABILITY CALL OUTS:How good is the company in the following areas:If the competency, or capability is “World Class” (clearly best in industry and could be benchmark for other industries), rate the item a 10.If the competency, or capability is “Industry Best” (clearly number one or two in the industry), rate the item an 8.If the competency, or capability is “Industry Average”, rate the item a 5.If the competency, or capability “Needs Improvement”, rate the item a 3.If the competency, or capability is a “Critical Deficiency”, rate the item a 1.Explain in detail your reasoning for how and why you scored as you did, and provide documentation (references). | OUT-BOUND LOGISTICS & POST SALES SERVICEProduct/Service Delivery Scheduling: 1Not a service offered.Outbound Shipping : 1Not a service offered.Post-Sales Service Support: 8Returns are always accepted without crazy restrictions.Post-Sales Warranty Support: naNo products sold by the company require this service.Other Post-Sales Support elements (as required) | Ave: 3.3 |
| STATIC CAPABILITIES CALL OUTS:What physical resources, and outcome resources, (like reputation, cash, patents, etc.) does the company hold that it might be able to leverage in a strategy? | CORE CURRENT CAPABILITIES (OUTCOME RESOURCES) These are resources that are now potential competitive weapons that were built over the past.What is the organization’s current cash balance and liquid asset condition?NOTE: YOU DON’T HAVE TO ANSWER THIS—BUT IT WOULD BE RELEVANT IN OTHER CONTEXTSWhat is the organization’s current and project cash flow?NOTE: YOU DON’T HAVE TO ANSWER THIS—BUT IT WOULD BE RELEVANT IN OTHER CONTEXTSWhat is the organization’s current balance sheet health and what are the primary assets with the most value?NOTE: YOU DO NOT HAVE TO ANSWER THIS—BUT IT WOULD BE RELEVANT IN OTHER CONTEXTSWhat patents or other intellectual property does the organization hold that are of strategic value?What other assets does the organization own or control that are of value and potential strategic significance? (Location, software, buildings, tools, etc.) |
Analysis Table 2: Implications & Recommendations of Skill/Competency/Capability Analysis
| Implications &First Draft Recommendations of the Activities Level of Analysis |
| Implications—“What does the rigorous review and evaluation of this information mean for Trader Joe’s moving forward?” |
| Recommendations—Based on this preliminary, single analysis, what are my initial recommendations to Trader Joe’s?(Remember, good strategy can leverage skills, competencies and capabilities, and it should find ways to overcome shortages in these resources) |
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