Analysis Of Target Corporation

Surname 1

Student’s Name

Professor’s Name

Course

Date

Analysis of Target Corporation

Target Corporation is an American discount store retailer store based in Minneapolis,

Minnesota, U.S. The corporation is the second largest in this Industry, coming second only to

Walmart. It has stores across the country and provides a wide range of products including

food, house wares, furniture, beauty and health products, sporting goods, clothing and

accessories, electronics, and many others ("Target : Expect More. Pay Less."). Despite

operating in a highly competitive industry, the company has been able to set itself as one of

the most successful companies in the US, by utilizing various exemplary organizational

strategies to enable it attain that feat. This paper provides an analysis of the company’s

environment and operational strategies using the Potter’s five forces model as well as a

focused analysis of the company’s scope of business.

Potter’s Five Forces Analysis

Degree of industry Concentration and Competition

The level of focused competition in the discount retail industries is very stiff, given

that there are a variety of big contenders in this sector. Some of the big names in the industry

include Walmart, Whole Foods Market, E-inlet, Costco Wholesale, and Amazon. Apart from

the bigwigs in the industry, there are a variety of lesser organizations that pose some

significant risk for Target such as Kroger, Macy’s, Home Depot, and Kohl’s. This threat of

intra-industry competition has become stronger with the rise of the new remote brands in the

market (Zheng 2). Essentially, if the rivalry among the existing contenders in the industry is

powerful, it may force the individual companied to drive down their prices which will

Surname 2

adversely affect the overall profitability of each corporation as well as the entire industry at

large. It is worth noting that this competition takes a heavy toll on the long term profitability

of the Target, and if it intensifies, the organization may fail to achieve its goals in growth and

development.

Bargaining Power of Buyers

Because of the aggressive competition that Target faces, customers have several

options available to them, both at retail stores and on the online platform. Additionally,

products in this industry have a low level of differentiation, which implies that buyers may

not have strong factors that drive their loyalty. Accordingly, Target is compelled to keep

costs at a friendly level with a specific end goal of ensuring that it does not scare away

customers (Safdar, and Newswires). Target offers a substantial scope of products, which is

not quite different from other notable firms such as Walmart, which implies that customers

have a wide range of options to purchase from. This existence gives the buyers a heavy

bargaining power, which means they can strongly affect the company’s process. The

variables that direct the bargaining potential of the purchasers are the low costs and the

extensive variety of items offered by Target (Warren). Nevertheless, the brand picture of

Target is better and its positive reputation has continued developing in the previous years.

Every one of these elements enhances the loyalty of purchasers and it may eventually drive

down the bargaining power of the latter.

Bargaining Power of Suppliers

The bargaining power of the company’s suppliers is considerably low, principally as a

result of their big size. None of the providers is sufficiently vast to hold heavy impact on the

company’s operations. The suppliers’ odds of forward integration are considerably low, given

that the number of these providers is extensive and that lessens the weight of their impact on

Target (Safdar & Newswires). This implies that the suppliers the company can change from

Surname 3

one provider to another straightaway, without much of a stretch. Due to the company’s

influence in the market, providers need to take after the principles set by Target and conform

to its set of principles. Nonetheless, the glamour of their brand along with the continuing

increments in its size and may make the suppliers have less control over the company.

Threat of Substitute Products

The risk of customers switching to the substitutes for Target is quite high. In the US,

there is a large number of retailers who provide similar products to the customers. In

addition, there are e-retail stores like E-bay and Amazon, and these are offering items that are

comparable to those offered by Target (Safdar & Newswires). The factors that can alleviate

this risk of substitutes include offering low costs and the extensive variety of items that the

company offers. In essence, the danger of substitutes is bound to intensify if Target does not

change its approach.

Threat of New Entrants

The retail business is well established in the US and there are firms of various sizes in

this industry. New participants can enter it and frame a business according to their capacity to

contribute capital. Notwithstanding, the little brands are not a noteworthy test for enormous

and set up brands like Target. The test comes just from the significant players in the industry.

Moreover, some non US brands have entered the US amid recent years and numerous more

are intending to enter it. In this way, the risk of new contestants is direct for Target. A large

portion of the danger is emerging from the outside brands that hold enough funding to have a

notable impact in the industry.

Analyzing the Scope of Target

Situation

Target Corporation works expansive arrangement general stock and nourishment

rebate stores in the United States, which incorporate Target and SuperTarget stores ("Target :

Surname 4

Expect More. Pay Less."). They offer both regular basic and in-fashion products, as well as

differentiated goods at outstanding costs. Their capacity to convey a shopping background

that is favored by their visitors is upheld by their solid store network and innovation

framework. They work as a solitary business section and their business strategy conveys an

essential part of their retail business model.

Core Competencies

Some of the company’s core competencies include a strong brand name, vast market

presence, and a large population of loyal customers. Essentially, there are customers who are

regular shoppers and these help to promote the company’s legacy. If they can utilize their

competencies effectively, they can propel themselves to greater heights.

Obstacles

Target has been highly challenged by Amazon's online internet business and in

addition the invasions into that space by most despised adversary Wal Mart. They have

endeavored to stay concentrated on their physical activities notwithstanding these difficulties,

and their efforts need to be enhanced in order to maintain the competition ("Target : Expect

More. Pay Less."). Speculators have been killed by the company's own negative benefit

viewpoint.

Prospects and Expectations

The organization possesses a great deal of development potential in the internet

business circle, essentially in light of the fact that they have not so much made a major move

into that zone. They have made new framework for internet business, and they are making the

moves important to grow. They are likewise focused on expanding store activity and

enhancing their presence in the market. In any case, the truth will surface eventually if the

firm will have the capacity to address these difficulties and continue competing favorably.

Surname 5

Works Cited

"Target : Expect More. Pay Less.". Target.Com, 2018, https://www.target.com/.

Safdar Khadeeja, and Dow Newswires. "Target's New Online Strategy: Less Is More". Fox

Business, 2018, https://www.foxbusiness.com/features/targets-new-online-strategy-

less-is-more.

Warren, Sam. "Rebranding Its Wheel: Target's New Strategy". Seeking Alpha, 2018,

https://seekingalpha.com/article/4085612-rebranding-wheel-targets-new-strategy.

Zheng, Fanyin. "Spatial competition and preemptive entry in the discount retail industry."

(2016).

Place new order. It's free, fast and safe

Paper type

Deadline

Page count

550 words

Total price: $ 15.00

Our customers say

Jeff Curtis

USA, Student

"I'm fully satisfied with the essay I've just received. When I read it, I felt like it was exactly what I wanted to say, but couldn’t find the necessary words. Thank you!"

Ian McGregor

UK, Student

"I don’t know what I would do without your assistance! With your help, I met my deadline just in time and the work was very professional. I will be back in several days with another assignment!"

Shannon Williams

Canada, Student

"It was the perfect experience! I enjoyed working with my writer, he delivered my work on time and followed all the guidelines about the referencing and contents."