Target Porter's 5 Forces

Target Corporation is an evolving company. Target has great expectations for its future. For the year 2015, Target aims to expand its experience in order to effectively alter their customer’s expectations and shopping behavior. Target’s industry outlook starts with opening fifteen new stores for the year. The strategic store growth plans focus on localization and customer experience. Target will establish new store formats such as TargetExpress and CityTarget, while also offering new experiences, merchandising layouts and innovations in its general merchandising stores. (Target.com) The retailer’s TargetExpress is the smallest store format at approximately 20,000 square feet and aims to provide customers with effective quick trip shopping experience.

The purpose of this paper is to discuss Target’s strengths, weaknesses, opportunities and threats. This paper will also talk about how Porter’s Five affects Target’s business decisions.

Target Corporation (NYSE:TGT) is the leading large-format general merchandise and discount retailer in the U.S., challenging Wal-Mart in electronics, toys and apparel while also seeking to differentiate with higher-end fashions and products for an upscale audience. As of the close of their latest fiscal year (FY2011), Target operated approximately 1,760 stores encompassing 233,000 square feet in 49 states and the District of Columbia. The company is divided into the retail and credit card divisions and moves the majority of its products through a highly integrated network of 37 different distribution centers, which include four food distribution centers. Target is one of the most well-entrenched large format retailers in the U.S., has the ability to manage their pricing strategies at a level of accuracy and precision that is comparable to Wal-Mart (Henderson, 2001). Unlike Wal-Mart, Target concentrates on a value-based message that concentrates on quality and price differentiation to sustain their gross margins while Wal-Mart concentrates on supply chain efficiency and a continual reduction of supplier and transaction costs (Krishnamurthi, 2001).

The aim of this paper is to highlight the strategic position of the company with an overview of its internal and external environment. The study of its strategy, design and other forces, one can easily gauge why and how target has managed to become the retail giant it is today.

After the analysis of Jetstar’s societal environment with the use of PEST, the Porter’s Five Forces can be used to analyse another aspect of the external environment; the task environment.

The first of Porter’s Five Forces is the threat of new entrants. According to the case study, there has been a wave of new entrants to the retail industry. These include Best Buy, Costco, Wal-Mart, Old Navy and the recently irrelevant, Target Canada. The second force, the threat of substitute products or services, is also prevalent in the retail market. Inevitably, the target audience that the Hudson’s Bay Company is trying to cater to, will shop at other retail stores for the same goods due to consumers behaviours and preferences. Another impacting force is the bargaining power of suppliers. However, this force does not play as large of an impact to HBC as one might initially assume. Traditionally, HBC among other large retail stores makes a large percentage of their

Target achieved its differentiation in the marketplace by positioning its products and store experience as higher quality than its main discount competitors Wal-Mart, with lower prices than department stores. Target’s main focus is QUALITY product and at a LOW PRICE. It all began with the idea of, “fashionable, smart design…delivered at a competitive discount prices.” Target strives to deliver to customers a unique shopping experience. Target grabs customer’s attention by their big red bulls eye and customers keep going to target. But at the same time Target need to make sure that their shelves are stocked, they gave good customer service,

I was once asked, if I thought the decision to reorganize of the state was right. Specially taking about creating the JDOC command structure, I said, “who else is going to do what we are doing?” The job of domestic operations has always been an additional duty, with very little time for planning or preparing for upcoming events. We are a reactive organization and I can see how that can kill us in the end. Our focus in the past 15 years has been on how prepare to go to war, which is our federal mission, and we have forgotten how to take care of our citizens in our own back yard which is our state mission. This reorganization has forced us to look to our left and right, and view the Oregon National Guard a one force both Army and Air. We as an organization are learning each other’s capabilities, strengths, weaknesses, and how we can better support each other in the

This report examines Target Corporation’s performance in a detailed strategic audit. The audit includes an external, internal and strategic analysis as well as a recommended course of action. The findings of the audit recommend a robust on-line/mobile presence to complement in-store sales, and to increase future earnings to remain competitive by building upon physical assets, brand value and logistical capabilities.

In recent interviews conducted with five target audience members who all shop the Target brand on average once per week, all but one was a Red Card credit card holder. The fifth participant shopped at Target as often as the others, both online and retail, but cited not wanting another credit card as the reason for not having a Red Card. The other four interviewees were all familiar with the 5 percent discount on all purchases, free online shipping with no minimum purchase, and easy in-store returns. One also like the 5 percent donation Target makes to local schools of choice. None mentioned the 5 percent off for one day of shopping for every two prescriptions filled as incentive. Three of the five interviewed said that Target was their online retailer of choice, compared to the other two who stated Amazon as their preference. When asked what improvements, if any, could be made to better service customer needs, all interviewees who offered an answer mentioned website reliability and slowness as areas of concern. Due to these concerns, none participated in designer releases, Black Friday, or Cyber Monday during the past year. Of those interviewed, on average, 12 percent of their total Target shopping was done online vs. 88 percent in store. Once also stated that she would like the ability to make online purchases through the Cartwheel app.

Maintaining the standards of the brands they carry is very important, along with the availability of fully functional cyber shopping incentives. Secondly, their success depends on the positive image they portray. A hit to its reputation can cause legal issues, effect its developmental opportunities and possibly loss of sales. Proceeding, is a high interest in maintaining the reliable multichannel experience they offer to the their guest through its operations. In contrast to that it is essential to be responsive to changing consumer preferences or the profitability may suffer. Moving on is an issue they currently faced but exerts its attention on sustaining the growing workforce and affording the labor cost for successful operations. One of the vital approaches of growing is by expanding its locations in small areas with dense population. They have to face high competition to secure profitable locations and find third parties to obtain financing and acquire necessary zoning permits for expansion projects. Other imperatives involve maintaining the quality of the product and services they offer. Also stay in compliance with government rules and regulation of work ethics and tax rates (Annual Report, 2012). Target’s internal elements are navigated by their ability of recognition, differentiation, innovation, strategic marketing and consumer loyalty. Legal issues still tend to affect the overall position

Target Corporation has recognized itself as one of the top retailers in the United States market on the basis of excellent service quality, customer experiences, operational excellence, strong financial position, and a wide array of product offerings. Through its high degree of service orientation at physical outlets and adoption of fair business practices, Target Corporation has become the most distinctive retailer in the eyes of its potential customers. Being one of the top-notch retailers in the United States, Target Corporation has to carefully strategize on its business operations and marketing tactics so as to keep itself in the row of competitive brands of the industry.

​The US Retail segment includes Target’s online business, its general merchandise stores, and SuperTargets (Reuters, 2013). Target.com is designed to allow guests to purchase products directly from online and/or to assist them in locating the product in a store near them. To aid in differentiating themselves, Target uses the web platform to sell not only its general merchandise, but also to introduce six brands sold exclusively through this medium (Target Brands, Inc., 2013c). The online presence aids in the vision of the company by offering multiple channels through which a customer can interact with Target. The brick and mortar stores of the US Retail segment offer general merchandise and groceries through the discount chain. Target and SuperTargets differ in that SuperTargets offer a

Target Corporation is a well-known American discount retailing company, founded in 1902 and is headquartered in Minneapolis, Minnesota. It is the second-largest discount retailer in the U.S. (Walmart being the largest) (Target, 2014). Target’s analysis will provide an insight into the corporation and its working. It look at and evaluate it in terms of terms of its effectiveness in each of these areas, such as: the structure, goals, agendas, boundaries, control, culture, politics, and decision-making processes. Based on the evaluation, this paper will help to provide suggestions for improvements within the different areas, if the need arises.

Best Buy, a familiar retailer in the technology world, is struggling to stay on top. Online and mass stores have cornered the market in terms of convenience, customer service and price matching. The recent closing of over two hundred stores alongside falling sales has experts predicting that the giant won’t be in business long. Using a results-only work environment (ROWE), Best Buy has removed the customer from the equation and forced many employees out. A marketing disaster, Best Buy must change its marketing strategy from sales-based to a customer-based to stay afloat.