Using Hambrick and Fredrickson’s model, describe Trader Joe’s strategy in terms of each of

the five elements outlined in the H & F model (pre-pandemic).  How does Trader Joe’s
strategy differ from Walmart’s?

Trader’s Joe’s Strategy is outlined below according to H and F model and also how Walmart
differed from it.

Arenas 

Trade Joe’s targeted a certain audience, well educated people and at places where universities are
situated and sell products understanding the demand for particular products these target audience
will prefer. They gathered insights and chose to sell products accordingly. For example, different
variety of food products and also benefitting health, such as whole-bean coffees, sprouted wheat
bread, and black rice etc. Around eighty percent of their customers where the targeted audience
of university students and this is how Trader’s Joe differed from other rivals. Walmart focused
more on different products for diverse people and different age group.

Differentiators  
Unlike its competitors, Trader’s Joe didn’t focus on traditional methods like creating products
brand, advertisement, using technology to optimize operating cost. Rather they invested more in
employees as their employees acted as brand ambassadors for the company. They didn’t
advertise with eternal agencies to market but used their own press. They believed in word of
mouth rather than using celebrities and role models for attracting customers. They choose to sell
the products of clients that are private and of good quality under private label items. These
helped to keep lower cost of products of Trader’s Joe. Walmart lower the prices of their branded
premium products and hence lower profit of margin as compared to Trader’s Joe. Also, rather
than using technology like self check out lanes, Trader’s Joe used the model rather Customer can
interact with the employees. This created a rapport with the customers and employees which help
sustain their customer base and also attracted new customers. Employees were able to give their
best performance as they were paid well and given other incentives rather than Walmart and
other retail companies investing money for advertisement.

Economic logic 

Though official records adjust that Trader Joe;s annual revenue is around $10 Billion, most
analysts thinks it is larger than this figure as Trader Joe’s doesn’t disclose its financial results and
they have achieved higher return on investments. Trader Joe’s focused on trying new products
now and then, and hence, customers new a particular product is for limited time only. This led
customers people more products at the time and this led to increase in sales of their products.
Whereas traditional retailer like Walmart focused on lower price for products fetching them
lower return on investment. Trader’s Joe attracted many clients as they didn’t charge them for
their slots in their shops. This competitiveness attract many clients and hence, clients were ready
to sell their products at lower price too leading to customer’s attraction to buy lower but quality
products. Walmart do charge client suppliers for the slots.
Vehicles

Rather than Trader’s Joe creating demand for products like contracting with other agencies,
customers created demand for trader Joe to open their centers in their cities. The innovative
approach of vibrant rapport between customer and employees, employees satisfaction, healthy
and targeted products for target audience helped grow their business. This was possible as CEO
of this company was given autonomy to innovate ideas and implement them. Rather than
professional experts, they employed extroverted individuals who could empathize with
customers leading to their success.

Staging and pacing

Due to higher level of satisfaction created among the customers, people in other regions wanted
Trader Joe’s to establish their outlet in their region. People are creating social media pages to
demand this and gather support from other people. This itself is enough for Trader Joe to
understand where can they open their new outlets to expand their markets.