1. One of the three tests of a winning strategy we covered in class was internal fit: complementarity between different activities along the value chain, between activities and the overall strategy, and between strategy and the needs of the target customers. By complementarity between activities, we mean that a choice in one value chain activity affects and supports the choices made in other parts of the value chain. In other words, choices in different parts of the value chain are interdependent (e.g. Trader Joe’s almost always promotes people internally. This means when they open a new store, they transfer people from existing stores, rather than hiring outsiders, to run the new store. This means their new stores have to be located close to existing stores so that managers can relocate easily. This leads to a dense network of stores in a geographic area. At the same time, having stores located closely around a central warehouse enables Trader Joe’s to make frequent deliveries to the stores. This enables Trader Joe’s to have smaller stores, devote less store space to back room storage and more space for selling. Therefore, choices in human resource policies complement choices in inbound logistics). Does TJ’s pass this test? In particular,
    1. Using the value chain framework, can you show how different activities fit one another, and how different activities fit the overall generic strategy?

b.Who are Trader Joe’s target customers? Do Trader Joe’s choices along the value chain fit the needs of its target customer group?

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