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According to the information for the case study, Trader Joe’s has several alternative solutions and approaches they can make. Out of their best options, they can franchise or gain access to capital through the stock market. If Traders Joes were to franchise their business, they could open up opportunities for their market and gain access to other locations for business. By franchising they gain a percentage of sales as royalty and get their business name out to the world. Also, if they start to utilize their current opportunities Trader Joe’s can access capital through the stock market and grow faster than their competitors. Accessing this capitol normally helps companies with marketing or expansion. If trader Joe’s take advantage of either of these two opportunities they can have a brighter future.
Currently Trader Joe’s doesn’t spend their resources on advertising, but prefers relying on the radio, word of mouth, and its newsletter. Although this method has helped in the past, this doesn’t give them much growth opportunities as their competitors. With the market having famously slim margins for a traditional grocery retail industry means there’s little room for error. In the end if Trader Joe’s doesn’t utilize every business opportunity, some other competitor will get the upper hand.
Evaluate each alternative above and critically assess the alternatives defined. Describe the implications and key steps for implementation of each alternative. Consider external and internal factors and other relevant trends. Once again, utilize course texts and other resources to enhance your assessment.
Expert Answer
- Franchise is a great option ahead for Trader Joe as they can, without putting much effort, gain huge profits as the products would sell and a certain share of the revenue is shared with Trader Joe. Not only this, franchising would ensure that their branding is done across nations in various geographical areas. Key steps would involve finding the right geographical location where unit has to be set up and a business partner. A major external factor is the government rules and regulations that prevails over various business activities and differ with each country.
- Also, they can raise good amount of capital through shares and in this way they will not have to depend on investors and can raise capital quickly to meet their functional objectives. Raising capital involves a lot of trust in the market which has to be established and also ability to repay would only come when the business objectives are met and expansion reaps revenue for the grocery firm. Trend is generally observed that franchise is any day a better option then involving stocks.
