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We have to find a new way to grow our businesses. Consider Trader Joe's

Growth is seen as a business imperative in a capitalist culture. I've seen the desire to grow lead to many strategic errors. Reading the new Power of Pull book by John Seely Brown and his cohorts, he says that to grow institutions must grow at the edges of the business, not from the core. Apparently Trader Joe's places many constraints on its growth, so that growth becomes a matter of ingenuity instead of brute strength. We have to be on the watch for more healthy ways to grow.

Fortune: Inside the Secret World of Trader Joe's, 2010-Aug-23, by Beth Kowitt

Trader Joe's has a deliberately scaled-down strategy: It is opening just five more locations this year. The company selects relatively small stores with a carefully curated selection of items. (Typical grocery stores can carry 50,000 stock-keeping units, or SKUs; Trader Joe's sells about 4,000 SKUs, and about 80% of the stock bears the Trader Joe's brand.) The result: Its stores sell an estimated $1,750 in merchandise per square foot, more than double Whole Foods'. The company has no debt and funds all growth from its own coffers.


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