1. Read case 1 (Trader Joes) and summarize the case in one paragraph.
2. Address questions 1-3 and problem solving. Each answer should be at least one paragraph

Case 1 Trader Joes Keeping a Cool Edge The average Trader Joes location stocks only a small percentage of the products of local supermarkets in a space little larger than a corner store. How did this neighborhood market grow to major status, earn stellar ratings, and become a model of management? Take a walk down the aisles of Trader Joes and learn how serious attention to fundamentals of management made this chain more than the average Joe.

From Corner Store to Foodie Mecca All across the United States, hundreds of thousands of customers are treasure hunting.1 Driven by gourmet tastes but hungering for deals, they are led by cheerful guides in Hawaiian shirts who point them to culinary discoveries such as Ahi jerky, ginger granola, and baked jalapeo cheese crunchies. Its just an average day at Trader Joes, the gourmet, specialty, and natural-foods store.2

Foodies, hipsters, and recessionistas alike are attracted to the chains charming blend of tasty treats and laid-back but enthusiastic customer service. Shopping at Trader Joes is less a chore than it is immersion into another culture. Crew members and managers wear smiles and are quick to engage in a friendly chat. Chalkboards unabashedly announce slogans such as, You dont have to join a club, carry a card, or clip coupons to get a good deal.

When you look at food retailers, says Richard George, professor of food marketing at St. Josephs University, there is the low end, the big middle, and then there is the cool edgethats Trader Joes.3 But how does Trader Joes compare with other stores with an edge, such as Whole Foods? Both source locally and around the world. Each values employees and works to offer the highest quality. However, Trader Joes has a cozy and intimate atmosphere that its rival lacks.

Trader Joes limits its stock and sells quality products at low pricesabout twice as much per square foot than other supermarkets.4 But this scarcity benefits Trader Joes and its customers. According to Swarthmore professor Barry Schwartz, author of The Paradox of Choice: Why Less Is More, Giving people too much choice can result in paralysis [R]esearch shows that the more options you offer, the less likely people are to choose any.5

Founder Trader Joe Coulombe opened the first Trader Joes store over 50 years ago in Pasadena, California. Its success led to expansion into a bona-fide chain, as Trader Joes stores became known as islands of value that replaced run-of-the-mill necessities with exotic, one-of-a-kind foods priced persuasively below those of any reasonable competitor.6 Coulombe eventually sold the chain to the Albrecht family, German billionaires and owners of Aldi markets in the United States, Europe, and Australia.7

Cost Control Trader Joes prides itself on its thriftiness and cost-saving measures, proclaiming, Every penny we save is a penny you save and Our CEO doesnt even have a secretary.8 Its strongest weapon is a deliciously simple approach to stocking stores: (1) search out tasty, unusual foods from all around the world; (2) contract directly with manufacturers; (3) label each product under one of several catchy house brands; and, (4) maintain a small stock, making each product fight for its place on the shelf.

Most Trader Joes products are sold under a variant of its house branddried pasta with the Trader Giottos tag, frozen enchiladas under the Trader Joses label, vitamins under Trader Darwins, and so on. But these store brands dont sacrifice qualityreaders of Consumer Reports give Trader Joes house brands the highest ratings.9 The house brand success is no accident. According to Trader Joes [former] president, Doug Rauch, the company pursued the strategy to put our destiny in our own hands.10

Customer Connection Ten to 15 new products debut each week at Trader Joesand the company maintains a strict one in, one out policy. Items that sell poorly or whose cost rises get tossed in favor of new options, something the company calls the gangway factor.11 If customers dont like something about a product, out it goescount spinach and garlic from China among the rejected losers. Our customers have voiced their concerns about products from this region and we have listened, the company said.12

Discontinued items may be brought back if customers complain. We feel really close to our customers, says Audrey OConnell, former vice president of marketing for Trader Joes East. When we want to know whats on their minds, we dont need to put them in a sterile room with a swinging bulb. We like to think of Trader Joes as an economic food democracy.13 In return, customers keep talking and recruit new converts. Word-of-mouth advertising has lowered the corporations advertising budget to a fraction of that spent by supermarkets.14

Trader Joes culture of product knowledge and customer involvement is carefully cultivated among new hires and current employees. Everyone is encouraged to taste and learn about the products and to engage customers to share what theyve experienced. Most shoppers recall instances when helpful crew members took the time to locate or recommend particular items. Job descriptions highlight desired soft skills, such as ambitious and adventurous, enjoy smiling and have a strong sense of values. They count as much as actual retail experience.15

Strength from Within A responsible, knowledgeable, and friendly crew is a natural extension of the firms promote-from-within philosophy. And crew members earn more than their counterparts at other chain grocers, sometimes by as much as 20%.16 Starting benefits include medical, dental, and vision insurance; company-paid retirement; paid vacation; and a 10% employee discount.17 Assistant store managers earn a compensation package averaging $70,000+ a year (including salary and cash bonus) while the store managers packages average $109,000.18 Future leaders enroll in training programs such as Trader Joes University that help develop the loyalty necessary to run stores according to company and customer expectations. The program teaches managers how to get their part-timers to demonstrate the customer-focused attitude shoppers have come to expect.19

What does the future hold? Will Trader Joes allure of cosmopolitan food at provincial prices continue to tempt new consumers? Will management practices continue to attract the talent Trader Joes needs to maintain its culture and customer focus as the competition heats up?

Case Analysis Questions 1. Discussion: In what ways does Trader Joes demonstrate the importance of each responsibility in the management processplanning, organizing, leading, and controlling?

2. Discussion: What lessons does the Trader Joes story offer to aspiring entrepreneurs who want to get off to a good start in any industry?

3. Problem Solving: At the age of 22 and newly graduated from college, Hazel has just accepted a job with Trader Joes as a shift leader. Shell be supervising four team members who fill part-time jobs in the produce section. Given Trader Joes casual and nontraditional work environment, what skills will she need, what should she do, and what should she avoid doing in the first few days of work to establish herself as a successful team leader?