Marymount University Week 1 Trader Joes Strategic Management Case Study You’re the VP of strategy for a grocery store startup (think: Jet.com or Peapod). Y

Marymount University Week 1 Trader Joes Strategic Management Case Study You’re the VP of strategy for a grocery store startup (think: Jet.com or Peapod). Your chief analyst is out sick–lot of that going around recently. You need to get a report on the competitive landscape of brick-and-mortar grocery stores to your CEO ASAP. In less than 1 page, single-spaced okay, 12-point font, answer the following two questions:1. Using the financial ratios below (2nd table), and Ghemawat and Rivkin’s (G&R) ideas on differentiation and cost based competition (use the G&R article for “Creating Competitive Advantage” article) please describe what the ratios tell you about the basic strategies of Whole Foods, Kroger, and Safeway. Where do you see evidence for cost or differentiation strategies? You’ll see that they differ and that they correspond to the real-world strategies of these firms. If you’ve never been to a Kroger or Safeway, just look at these pictures: Kroger & Safeway. All data that is relevant to this case is contained in the table.2. Based on the Trader Joe’s material thus far (the first case from Week 1 and the podcast assigned for 3B), how you do you think Trader Joe’s fits into this competitive landscape? What do you think their strategies are with respect to SG&A and COGS? What basic strategies (again, from the Ghemawat & Rivkin article) do you think they are using? Describe why you think this by drawing on facts about Trader Joe’s and comparisons with other grocery companies. Note that Trader Joe’s Financial data is not available because they are a private company. Also, this data is available on page 12 of your Trader Joe’s case (those data are in 000’s). Trader Joe’s Accounting Homework
Goal: This assignment is designed to test your understanding of the very core ideas of
business strategy: cost, differentiation, and competitive niches. You’ll use the following
resources:
1. Ghemawat and Rivkin article, specifically the ideas of cost, differentiation, willingness
to pay, and value added.
2. The Trader Joe’s Harvard Case (Coursepack)
3. *Very* basic finance knowledge. I’m giving you everything you need to know below.
We don’t do a lot of finance in this class, but please remember, Strategy is
supposed to integrate all the core disciplines!
a. Gross Profit/Revenue:
https://www.investopedia.com/terms/g/grossmargin.asp
b. SG&A/Revenue: This explains how much money is spent on administrative
overhead. Higher values usually suggest higher expenditures on marketing,
customer service, and fixed costs like store lease agreements, etc.
c. You can find the simplified financial data for three companies in the table
below: Kroger, Safeway, and Whole Foods. Note: this information comes
from a table in the appendix of the Trader Joe’s case from week 1.
Assignment
You’re the VP of strategy for a grocery store startup (think: Jet.com or Peapod). Your chief
analyst is out sick–lot of that going around recently. You need to get a report on the
competitive landscape of brick-and-mortar grocery stores to your CEO ASAP. In less than 1
page, single-spaced okay, 12-point font, answer the following two questions:
1. Using the financial ratios below (2nd table), and Ghemawat and Rivkin’s (G&R) ideas
on differentiation and cost based competition (use the G&R article for “Creating
Competitive Advantage” article) please describe what the ratios tell you about the
basic strategies of Whole Foods, Kroger, and Safeway. Where do you see evidence
for cost or differentiation strategies? You’ll see that they differ and that they
correspond to the real-world strategies of these firms. If you’ve never been to a
Kroger or Safeway, just look at these pictures: Kroger & Safeway. All data that is
relevant to this case is contained in the table.
2. Based on the Trader Joe’s material thus far (the first case from Week 1 and the
podcast assigned for 3B), how you do you think Trader Joe’s fits into this competitive
landscape? What do you think their strategies are with respect to SG&A and COGS?
What basic strategies (again, from the Ghemawat & Rivkin article) do you think they
are using? Describe why you think this by drawing on facts about Trader Joe’s and
comparisons with other grocery companies. Note that Trader Joe’s Financial data is
not available because they are a private company. Also, this data is available on
page 12 of your Trader Joe’s case (those data are in 000’s).
Financial Tables
Income Statement
Whole Foods
Kroger
Safeway
Revenue
10,107,787,000 90,374,000,000 43,630,200,000
Cost of Goods Sold
6,571,238,000 71,494,000,000 31,836,500,000
Gross Profit
3,536,549,000 18,880,000,000 11,793,700,000
SG&A and Other Expenses
Operating Income
Financial Ratios
2,988,929,000 17,602,000,000 10,659,100,000
547,620,000 1,278,000,000 1,134,600,000
Whole Foods
Kroger
Safeway
COGS/Revenue
65.0%
79.1%
73%
Gross Profit/Revenue
35.0%
20.9%
27%
SG&A/Revenue
29.6%
19.5%
24.4%
5.4%
1.4%
2.6%
Operating Income/Revenue

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