Whole Foods and Trader Joe Essay

Pages: 7 (2339 words)  ·  Bibliography Sources: 4  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business

SAMPLE EXCERPT . . .
A lawsuit it filed against an imitator in Vancouver essentially reached the same conclusion -- Trader Joe's is not actively pursuing international customers (CBC, 2013). This case is interesting, because it is exactly the same type of guerilla strategy that TJ's uses when entering new markets. The company allows its reputation and cult following to proceed it -- in this case with a store right across the border in Washington State where reportedly 40% of the business comes from Canadians. So as far as a recommendation for operating strategy is concerned, opening a Canadian store makes perfect sense, and Vancouver is the place to start since the advanced hype has been built up already to the point where a business model as absurd as Pirate Joe's actually works. It is really that simple as far as operating strategy -- you have to actually go into another country and operate there. Trader Joe's does not alter its business model so exporting some of its products is not a direction the company wants to go, and nor should it, but opening a store or two in markets that are already primed for a TJ's is a great idea.

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The decision to move into a foreign market is not one to take lightly, however. There must be a corporate-level strategy where international expansion makes sense. On one level, opening a couple of stores across the border is probably not going to make much of a dent on a company as large as Trader Joe's. Certainly, moving into two foreign markets has actually done relatively little for Whole Foods. There is no particular advantage to opening a store in Vancouver that opening a store in Random City, USA would not deliver (Memphis, New Orleans, El Paso, Jacksonville and Honolulu are among major cities without one). So it is important for Trader Joe's to look at international expansion in the bigger picture context.

Essay on Whole Foods and Trader Joe's Assignment

If Trader Joe's goes public with an IPO, that will put the company in a better position for international expansion to make sense. An IPO will give the company a major capital injection that will allow it to fill in its domestic markets as well as target international ones. At this point, the company can and should pursue more growth domestically, but having the capital from an IPO will help it to pursue opportunities internationally as well. Canada is obviously the easiest -- the brand is becoming known there despite not having stores, the country has money, and most of the largest markets in North America without a Trader Joe's are now in Canada, not the U.S. Food just gets trucked across the border, so while there are some additional logistics considerations, these are not major and would be overcome is the company had enough money to fill in the Canadian markets in the same way that it has filled in the American ones.

Conclusion

While Whole Foods has engaged in international expansion and Trader Joe's has not, the way that the they should approach the issue is basically the same in either case. Whole Foods seems to be at least somewhat uncommitted to foreign expansion, having stalled its expansion in the UK for the time being and apparently content to operate only in two Canadian cities. Both companies have opportunity to move overseas, however, and this is something that they should look at. Whole Foods has long recognized that size helps it to compete against the bigger companies, and Trader Joe's doubtless realizes this, too. In a sense, TJ's should look at the example of Target, which waited too long to get into foreign markets, only to find that it was unable to do so successfully. Whole Foods might be moving slowly, and needs to move faster, but they are learning with these subsidiaries so that when they do begin to see opportunity, they can move much more quickly. If history has shown anything about international expansion it is that the faster a company goes international, the better they are going to be at it -- Starbucks is a classic example of that, having made global growth part of its strategy since day one. Whole Foods is ahead of TJ's in this regard, but Trader Joe's can make up this ground if it chooses to go public and get some capital for growth on its balance sheet.

References

CBC. (2013). Trader Joe's loses fight with Vancouver's Pirate Joe's. Canadian Broadcasting Corporation. Retrieved June 3, 2014 from http://www.cbc.ca/news/canada/british-columbia/trader-joe-s-loses-fight-with-vancouver-s-pirate-joe-s-1.1912400

Gogoi, P. (2007). No Wild Oats for Whole Foods? Business Week. Retrieved June 3, 2014 from http://www.businessweek.com/stories/2007-06-06/no-wild-oats-for-whole-foods-businessweek-business-news-stock-market-and-financial-advice

Loeb, W. (2012). Aldi's Trader Joe's is a winner. Forbes. Retrieved June 3, 2014 from http://www.forbes.com/sites/walterloeb/2012/05/17/aldis-trader-joes-is-a-winner/

Moore, A. (2007). Whole Foods to acquire rival Wild Oats. MarketWatch. Retrieved June 3, 2014 from http://www.marketwatch.com/story/correct-whole-foods-to-acquire-rival-wild-oats-for-565-million

Valverde, M. (2013). South Florida's grocery shopping options increase in 2014. Sun-Sentinel. Retrieved June 3, 2014 from http://articles.sun-sentinel.com/2013-12-26/business/fl-grocers-2014-20131225_1_lorrie-griffith-shelby-report-south-florida [END OF PREVIEW] . . . READ MORE

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