Trader Joe's International Expansion Market Analysis Student's Name Institution Affiliation
Trader Joe's International Expansion Market Analysis Student's Name Institution Affiliation
Trader Joe's International Expansion Market Analysis Student's Name Institution Affiliation
Student’s Name
Institution Affiliation
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Contents
1.0 Executive Summary...............................................................................................................................2
2.0 Introduction...........................................................................................................................................3
2.1 Company Overview...........................................................................................................................3
2.2 SWOT Analysis.................................................................................................................................4
2.2.1 Strengths.........................................................................................................................................4
2.2.2 Weaknesses.....................................................................................................................................5
2.2.3 Opportunities..................................................................................................................................5
2.2.4 Threats............................................................................................................................................5
2.3 Country for Expansion.......................................................................................................................5
3.0 Economic Analysis................................................................................................................................5
4.0 Cultural Analysis...................................................................................................................................7
5.0 Political Analysis...................................................................................................................................8
5.1 United Arab Emirates........................................................................................................................8
6.0 Ranking of the Countries based on the Appeal......................................................................................8
6.1 United Arab Emirates........................................................................................................................8
7.0 Proposed International Approach..........................................................................................................9
8.0 References.............................................................................................................................................9
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Trader Joe's is a unique private food retail chain founded by Joe Coulombe in 1967 in Monrovia,
California. The company now has 530 sites throughout the United States. Their annual revenues
are projected to reach $13 billion (Adams, 2020). The average size of a Trader Joe's location is
10,000 square feet. They keep their businesses small and only carry a few items to keep costs
down. They sell more than 70% of their things under their own brand, allowing them to save at
least 20% on product costs (Adams, 2020). Using private labels, the company can also provide
high-quality products to their clients. Trader Joe's main strengths include consistently inventing
new products and responding to its customers. As a result of its success in the United States, the
This paper highlights analysis of three countries that Trade Joe intends to expand to and comparing
it to the United States. As such, the document highlights the company overviews, economic
analysis of these countries in comparison to the United States. The economic analysis includes
various macroeconomic indicators of the country. As well, the study highlights business and
corporate culture of this countries company to the United States. The cultural analysis indicates
that Germany has similar culture with the US, while India and China have variation in their culture.
Political analysis is also undertaken in this study, which reveals that all countries are stable but few
political risks.
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2.0 Introduction
Trader Joe's is a unique private food retail chain founded by Joe Coulombe in 1967 in Monrovia,
California. The goal of this supermarket was to cater to Pasadena's affluent and over-educated
customers. In the year 1979, the popular California supermarket was purchased by the German-
based grocery company Aldi North. After the takeover, Aldi North decided to sell the Private
Labeled products to customers (Adams, 2020). In 1988, CEO Coulombe was succeeded by John
Fields, a fresh employee. Trader Joe's expanded to several states under JohnFields' management,
including Boston, Massachusetts, California North, Arizona, and a few outlets in New Jersey.
Trader Joe's revenues soared as the supermarket expanded across the United States, and it steadily
increased. The company now has 530 locations around the country (Adams, 2020). Their yearly
revenues are projected to be in excess of $13 billion. Trader Joe's establishments are typically
around 10,000 square feet in size. To keep expenses down, they keep their stores tiny and only
carry a few things. More than 70% of their items is sold under their own brand, allowing them to
save at least 20% on product prices (Adams, 2020). The corporation can also supply high-quality
products to their customers by using private labels. Trader Joe's primary skills include
developing new items on a regular basis and listening to its customers. The corporation hopes to
expand in the foreign market as a result of its success in the United States. Germany, China, and
India are among the countries where the corporation plans to expand.
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2.2.1 Strengths
Some of the strengths of Trader Joe’s are that it is a credible brand that has been around for 50
years. This credibility provides a secure image and idea of what the store is, and what it offers to
their consumers. As well, another company’s is that it has a very wide distribution network, with
2.2.2 Weaknesses
Trader Joe’s has had to go through product recall a few times. Some products were believed to
be contaminated and had to be removed for safety reasons. It is a company’s duty to ensure their
customers that their products are safe to use/consume. When a company is required to recall
products, it damages the company’s reputation and makes consumers question their products.
2.2.3 Opportunities
The opportunities for Trader Joe’s include expanding to international market and in the
expanding markets for private labels. Another opportunity is the growing demand for organic
foods (Adams, 2020). Trader Joe’s is valuable to consumers because of their organic products,
and the demand for organic products continues to grow, which can be very beneficial for Trader
Joe’s.
2.2.4 Threats
Competition is major threat of Trader Joe’s market. The food market is highly filled with
of your competitors. Trader Joe’s has some very well established and successful competitors, and
the company has to be very cautious and innovative to be able to distinguish from competitors.
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Economic analysis involves utilizing the macroeconomic data to determine future investment
possibilities. As such, economic analysis will help Trade Joe determine the best market to
expand and help the company generate more revenue. There various economic indicators that
include GNI, PPP, GNP, population, inflation rate over time, as well as unemployment rate.
Economic
Indicators
USD
over time
rate
Based on the economic indicators highlights above, Trader Joe company can expand in
international market as the country highlighted that the individuals consumer products in the
market. Compared to the United Arab Emirates, United States has higher gross national income
per capita. The United States has higher gross national product compared to UAE. Thus, both
countries have higher consumer rate of the products in the market (Trading economics, 2021).
United States has a higher populations compared to the UAE; as such, using the population
Trade Joe have a chance of expand in this market as there is higher demand of grocery related
products. The inflation over time indicates the increase in prices over the years.
Although there are difference and similarities in business and corporate culture between the
United Arab Emirates and United States it is clear that Trade Joe can use these to learn how to
approach UAE market. Both cultures have same level of drive and motivation of success, job
satisfaction, and providing for their families. However, the US is a meritocracy state where
individual accomplishments are more valued than group, while in UAE group work is more
valued. As such, an UAE individual will take into account how their actions affect others.
Having this in mind, Trade Joe executive must ensure their marketing strategy considers UAE
culture for the company to gain a market share in United Arab Emirates.
As west countries, United States have fundamental different with United Arab Emirates in shared
values and cultural practices when it comes to business and corporate culture. However,
American culture encourages communication that is more direct and open compared to the
United States. As such, Trade Joe will fit perfectly within UAE culture as there no much
difference with the US. Family relationships are one of the most noticeable variations between
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American and UAE culture. While the Arabs place a high value on families, the Americans place
a high value on individualism. Individual ideals are given less weight in Arabs society than
family values. Arabs hold family values in high regard. As such, it is important for Trade Joe to
Notwithstanding regional concerns over Iran, the UAE will be stable and prosperous from 2022
through 2026. The transition of power in Abu Dhabi from the current monarch, who is unwell, to
the crown prince is expected to be peaceful. In 2022, economic growth will pick up, boosted by
pro-business policies, looser oil output limitations, and a post-coronavirus rebound in services.
Diversification and a favorable business climate will be priority, but oil will continue to play a
vital role in the economy. United Arab Emirates has experienced political stability; however,
there is always risk of domestic unrest. United Arab Emirates has one of the highest foreign
direct investments in the world, with an FDI of $10.385 billion and is ranked number 27th in the
world. UAE-US relationship have positive attitude as it allows both countries to continue doing
business. In the United Arab Emirates, the "Corruption Perceptions Index" for the public sector
indicated 29 marks for 2020. The scale runs from 0 to 100, with the larger the amount, the more
corruption there is. The United Arab Emirates is ranked 21st as a result of this.
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United Arab Emirates is best fit for international expansion and it has an appeal for Trader Joe
expansion. The country rank is based in terms of political stability and culture that is most
Trader Joe’s should use pricing strategy as market entering strategy. The strategy will help the
company to in large scale and reach more customers. As well, the company should utilize
functional organization strategy to employee people with skill sets that help the company achieve
its goals effectively. Also, the company should use global expansion strategy and use customized
marketing structure.
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8.0 References
Adams, H. G. (2020). Trader Joe’s: A Case Analysis of Trader Joe's Competitive Strategy.
Lutz, Ashley.(2018) “How Trader Joe's Sells Twice As Much As Whole Foods.” Business
salesstrategy-2014-10.
Steenkamp, J. B. E. (2018). Brands and retailers under attack from hard discounters.
COUNTRIES. https://tradingeconomics.com/countries
Watson IV, G. F., Weaven, S., Perkins, H., Sardana, D., & Palmatier, R. W. (2018). International