Competitive Strategies All Over the Supermarket Industry

Competitive Strategies All Over the Supermarket Industry
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Trader Joe’s Case Analysis
The supermarket industry has transformed over the last half-century, leading to a decrease in the market share. The competitive strategies applied vary all over the industry. Competition in the industry is relentless, and customer demands have led to more changes. Trader Joe’s has an approximate of 414 stores in 400 locations across 37 states in the United States and the District of Columbia. The store had a selling space of less than 15,000 square feet. Since Trader Joe’s does not offer all the essential items, one may need during shopping. A family would not do all its shopping there as it only specializes in groceries. Therefore, the founder of Trader Joe’s had thought on his store after a vacation in the Caribbean. He apprehended that customers would love to try new things during holidays, but he also realized that having less in the store was also a better idea. Trader Joe’s is the number one leading firm which entirely refined the ideology of traditional supermarket and changed it into a new unique experience for customers. Trader Joe’s unique innovative strategies of selling its products under one brand and at a low-price have led to it becoming a successful business over a long period.
The largest grocers in the United States included Wal-Mart, Kroger, Safeway Supervalu. The supermarkets operated at a shallow profit margin and faced some challenges in 2013. The supermarkets ended up coming up with multiple channels of making money. Through premiums and offering products at a low cost or on discount, supermarket attracts more customers. The willingness of consumers to pay a premium, enables these supermarkets to remain viable in the industry, and also grow their profit. Ways in which firms make money vary and customer demands guide it. All organizations have their unique approach to making money and each strategy successful. All organizations have their target segments that generate profits.
Financial ratio analysis 
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The financial ratio analysis reflects the different strategies pursued by the firms. They have unusual asset turnover. Since whole foods specializes in organic foods, it has a turn over the ratio of 2.35 while Kroger, which does not concentrate on organic food has a turnover ratio of 3.85. Whole Food has a market segment where it sells organic foods at a higher price. Thus, it does not need to sell most of the inventories to incur a profit.
On the other hand, Kroger has to turn over more of its stock to make a profit as they do not specialize in any product as Whole Foods. The profit margins also vary as Whole Foods is at 3% while Kroger is at 1%.
The above results are an indication that forms can deliver strong financial returns in different ways. For one to understand, it is essential to look at the analysis of financial leverage. If the ratio is low, it’s a clear indication that the company is financed more using equity than debt. From th...