Organizational Development and Change

Trader Joe’s - Case Analysis

By Group 2
Akshat Uttam H005-21
Anu Saini H012-21
Sakshi Ranka H050-21
Sanya Srivastav H054-21
Amey Udgirkar H067-21

1. What are the key sources of Trader Joe’s competitive advantage (i.e. what do they do
differently from their competitors)?

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 ● Trader Joe offers products specific to the sophisticated customer segment interested in
finding good bargains.
● The store provided unique products that were not available in supermarkets.
● It offers an extensive lines of private label items with brand names such as Trader Joe’s,
Trader Ming’s, Trader Jose etc
● It stocked few items compared to any typical supermarket.
● They sell many organic and natural foods.
● Trader Joe marketed through its Fearless Flyer and radio ads but never ran televisions
ads. They marketed through word of mouth
● Its targeted customers mainly included people who were health conscious, enjoyed travel,
and liked trying new things.
● They did not have loyalty card programs or accept any coupons like other grocers.
● No questions asked return policy
● Store Operations: Typical Trader Joe’s stores had less than 15000 sq ft. of selling space.
As a result it led to angeled passageways which helped to reveal the store’s contents to
customers.
● Merchandising: About 80% products consisted of private label items. Customers could
not find major brands here. The place was a bliss to urbanites and college kids.Also it did
not follow global trends. They stocked limited varieties of each product and hence
purchased directly from manufacturers and hence low price to customers.
● People: Paying staff more than they might expect at rival grocers. Trader Joe contributed
employees' pay to their retirement accounts. Health care benefits were provided to part
time employees hence it became a haven for people with professions like artists,
musicians and creative types who wouldn’t do supermarket jobs.
● They provided a structured orientation/training process to its employees.
● Trader Joe wanted its employees to be familiar with the products they are selling and
therefore encouraged them to try various items and a separate expense account was
maintained that provided funds for employees to try new foods.
● Managers focussed on creating customer experience. If customers needed help with the
location of a certain product, employees walked with them rather than just explaining the
directions to them.
● The company did not introduce price scanners at the checkout lines until 2001, and it
continues to avoid using self-checkout to present day in order to engage with customers.

2. Identify the different ways in which human resource management activities

strengthen their strategy.

Trader Joe’s were very specific about each step involved in HRM which are mentioned below
and this was the reason that their HRM activities helped them to stand out in the market.

1. Recruitment -

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 ● Trader Joe’s recruits from the least utilized resources of America,
basically creative,college-educated young people without
technical skills or artists that don’t get jobs in theatres .
● But this talent were motivated to make customers happy as they
were given creative autonomy and going to work was really
appreciated by them as they were surrounded by people
● Generally people are not motivated to work in supermarkets but
good pay ,brand name and working conditions made them
motivated applicants to apply for the post.

2. Training :-
● 10 day of training was provided to newly recruited employees..
● Emphasis was given on the organization’s seven core values.
● Keeping customers happy ideology was inculcated in employees.

3. Career growth and learning opportunities -

● Company emphasized on providing knowledge about company’s products
and hence encouraged them to try various items throughout the store. This
increased their knowledge of what they are selling hence can sell it to the
customer with more confidence and share their own experiences at best.

4. Fair pay :-
● Provide higher wages to its employees compared to the wages paid by the
competitors to its employees.
● Part-time hires were paid $12 per hour.
● Full-time employees earned approximately $50,000 per year.
● Contributed 15.4% of employees’ pay to retirement accounts.

5. Healthcare Provision -
● They used to provide healthcare benefits to full time employees and even
some to part-time employees.

6. Employee empowerment -
● Employees featured in their commercials, not celebrities.
● Crew members were given autonomy to approach customers in their
creative way to start communication .
● Manager also gave freedom to crewmembers to make decisions on the
product displays of the shelf and if the product is out of stock,how to keep
the shelf full with other products .

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 ● Generally corporate offices in supermarkets take decisions on this .

7. Organizational Commitment :-
● Trader Joe’s was committed to its values and they focused on employee
empowerment and expected that their employees should be generalists
rather than specialists.
● Employees were expected to learn how to do every job in the store.
● Due to high wages employees retention rate is very high .
● Organization was highly customer centric as they used to provide creative
space to customers based on the ways they wanted to start the coversation.
● Technology usage was intentionally limited to increase customer-
employee conversation in order to improve relationships and also to
increase marketing via word of mouth.

So this is how Trader Joe’s HR practices were very unique and which helped them to stand out in
the market as it was difficult to imitate these practices unlike the non HRM initiatives which
were imitated by the competitors .