THUY TIEN BUI
Professor: STEFANO TIJERINA, PhD
GLOBAL STRATEGIC MANAGEMENT
22 September 2017
ANALYSIS OF TARGET’s STRATEGY IN CANADA MARKET
Target, over a 100-year-old company, has been one out of the most leading and popular retail stores business in America, which supplies thousands of product categories for customers every day. Nowadays, Target owns over 1,800 stores in the United States and has a huge amount of employees, 365,000 in all outlets. The success of Target in the domestic market triggers company to expand to a foreign market, in this research, Canadian market will be mentioned. In 2011, Target brought over 120 Zellers stores of Hudson’s Bay Co. in Canada and create a strategy in open a department store chain with the
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Moreover, the development of eBay and Amazon causes a big impact on the customer demand in a retail market. The convenience of the online shopping makes the retail stores suffer some losses in a sale if there is no online system updated.
Threat of new entrants: moderate
The industry includes both small and large retailers but the small department stores cannot beat Target and they cannot negotiate with suppliers to have a better deal than Target. However, there are still many large retailers in the market including large local retail stores such as Loblaw, Metro,.. Or American competitors such as Walmart, Costco,.
Level of competitive rivalry: high
The competition of retail market is really intense, even the small retail stores can pose a threat to a product line if they offer the good products with cheaper prices.
More and more foreign brands joining the market makes the level of competition is really high.
ANALYSIS
With the Five Forces analysis, it’s proved that Canada retail market is very difficult to expand if a company has no well-prepared plan.
The problem of strategy:
The company didn’t research the culture and the Canadian consumer clearly.
According to McMahon, T. (2017, June 19), the shopping habits of Canadian customers are different from American. While
Wal-Mart’s is one of Target’s biggest competitors, but other retailers are also trying to compete, such as Sears, Dollar General, and Amazon. Although Target caters more to a more upscale clientele, it still carriers many of the same items as Wal-Mart. Target is not able to compete internationally with Wal-Mart since all of stores are in the U.S. but by 2014, they will have about 150 stores
Loblaw’s is one of the most successful companies in the grocery retail industry in Canada, in order for Loblaw’s to penetrate a global market they must identify, plan and execute a strategy. Loblaw’s needs to identify new market potential internationally which in turn increase profit and gross margins, in order to continue expanding. Such starting locations for expansion that seem feasible are developing cities in the United States that are relatively close to the Canadian boarder. This will make it easier to control and monitor this project closely, because since this is the first global expansion, Loblaw’s should keep a close eye on their productivity to determine if they can compete globally. Their financial records indicate that they can expand. Their gross margins and profits are in relatively good standing indicating that they have more money to payoff expenses and potentially expand. The Loblaw’s philosophy of not acquiring debt and using cash flow to purchase new real estate
Threat of new entrants: Retail industry has a higher barrier to entry. First, it is difficult to work out a good value chain as it involves a complex process. Second, it is difficult for new entrants to gain competitive advantage and earn above-average returns in such a highly competitive market. Besides,
In today’s world, especially in Canada, consumers generally want to satisfy all of their needs in a way that saves them the most time and energy. In order to meet this need, Target offers their customers the chance to buy different products that they would normally have to go to two or three different stores
That being said, suppliers can have some power in regards to choosing the number of stores where their product can be purchased at. This allows the suppliers to regulate their sales and stay away from the “red tape”. The bargaining power of customers impacts HBC as customers are able to influence pricing based on their buying habits. Of course, customers do not choose the retail prices offered to them, however, if inexpensive clothing were to lead the industry, retail stores would adapt to this consumer demand and offer an abundance of inexpensive clothing due to consumer preferences. These forces lead to rivalry among competitors due to the many options offered to consumers to grant their desires. These forces combine to cause strategic implications for HBC. HBC must differentiate itself from its competitors who, similar to HBC, have large annual revenue, strong and profitable supplier agreements and large amounts of capital. As well, due to competitors large sale volumes, competitive pricing is an implication which faces
Companies in the retail industry operate in a high price elasticity environment as there is not much product differentiation to leverage. Buyers face almost no switching cost if they chose a substitute offering better value. On the contrary, large and diverse population making small purchases works in favor of the industry. No one individual or a small group has the power to significantly impact the industry, but overall buyers enjoy have a high bargaining power in the industry.
The industry we have chosen is the department store-retail industry. Within this industry, we have chosen the department stores of JCPenney and Macy’s. We find this industry, as well as these two companies, interesting from a strategic perspective. JCPenney has recently undergone a massive strategic restructuring in regards to its pricing, brand offerings, and store layout, pushing it away from the typical department store strategy of discounts and coupons. Its new strategy has become much closer to Wal-Mart’s strategy of every day low prices. Macy’s, on the other hand, has restructured with a push from the economic
Target Corporation is known worldwide as a large retail chain that brings in millions of dollars each fiscal year. The ability to remain competitive in a saturated industry could prove difficult to some retailers, but Target remains one of the leaders in the retail market. With success comes risk. Target Corporation competes against online retailers as well as “big box” stores to remain competitive.
Over the last few years, it has been predominantly evident that Sears Canada has been not performing relevant to the standards present within the competitive industry. The market of retail department stores has dramatically changed since the time the corporate entity first began. To stay relevant within today’s retail industry, Sears Canada has to change their current operations. In today's market, the power of value-driven consumer products has been dominating the industry due to their affordable prices and emphasized popularity. Sears Canada has failed to distinguish themselves within the industry as either an affordable or a high quality department store. With emerging high-end retailers like Nordstrom, Holt Renfrew, the Hudson's Bay Company, and the rise of online discount retailers like Amazon and eBay, Sears can not afford to flood both market segments. This has become a major issue that Sears Canada is facing, as the company will need to differentiate themselves from their competitors by focusing their resources in the home improvement industry.
The industry does not possess major threat from new entrants due to strong barriers to entry and strong competition for retail space. There is also a strong rivalry between competitors as limited space is being contested by major players alongside
In 2009 and forward, Loblaw Companies were up against aggressive competitive markets while still dealing with the backlash from the 2008 world economic crisis. Same store sales were on the decline and Loblaw’s was in desperate need to change their store strategies. By 2011, Loblaw’s had come up with the idea to diversify and expand their operations with new upgrades to in store departments as well as expanding upon their leading brands, President’s Choice and No Name. This case study underlines the premise of national and global strategies, which is a key subject matter and general broad topic when studying International Business. The main concerns of this case study would be to identify if Loblaw’s new strategies gave them a leading edge in the ever-expanding market, as well as seeing if these new strategies will hold up to market standards in the near future.
By 2006, Walmart dominated 50% of the market in Canada for general merchandising and became Canada’s largest non-food retailer with about 13$ million in sales annually. Thanks in part to Walmart, today retail dominated supply chains lead the
Study shows that seventy percent of Canadian consumers shopped in Target US and their expectations were high. However, first bad impression was so strong that it was simply impossible to reverse. Two - fifty percent of consumers were disappointed of their shopping
The Bay's partners impact the vital heading of the organization and consequences of the organization. These partners are the general population or gatherings that the business influences specifically or in a roundabout way. Subsequently, they apply weight on the business to push the organization to consider their interests. With its huge hierarchical size in Canada, it has numerous partners. Be that as it may, just a few partners significantly affect the organization. To comprehend the flow of the relationship amongst partners and the business, chiefs must distinguish these partners and their interests. The Bay can utilize this data to guide choices to accomplish it's objective as the best form retail chain in Canada.
Macro-economic developments slowing down retail sales ................................................................ 26 Increasing concentration and strong competition.............................................................................. 27 Changing consumer