Research Project essay
Target is one of the largest retailers in the US and the company operates successfully not only in the US but also internationally. The marketing success of the company is, to a significant extent, due to the development of extensive discount stores network which attracts customers and boosts sale rates of the company. Nevertheless, today, Target is facing the tight competition from the part of such behemoths of the retail industry as Wal-Mart and others. In addition, the ongoing economic problems and economic stagnation in the US as well as other countries, where Target operates, threaten to the further successful business development of the company. Nonetheless, Target still has a considerable potential and currently, the company focuses on the further international market expansion.
Vision and Mission of Target
The vision of Target focuses on the international market expansion and enhancement the position of the company in the market as the leading discount stores chain that provides customers with diverse products at affordable price. The mission of the company is to deliver customers products, which they can buy and of the quality that meets customers’ expectations. At the moment, the company attempts to develop the customer loyalty and to expand its market share through the development of its business internationally. Therefore, the company attempts to meet its vision and mission but still Target faces problems with the resistance of local communities, which often view Target as a threat to local small businesses. On the other hand, the company offers customers products at attractive price that make Target still popular among customers.
External Assessment
Bargaining power of customers is very important in the contemporary business environment for Target because the company relies heavily on customers and their bargaining power. Today, the bargaining power of customers is low because of negative effects of the economic recession in the US and global financial crisis. Nonetheless, the company manages to maintain its competitive position in the market as its rivals are in the similar position. As Target is a discount stores chain customers stay loyal to the brand being attracted by affordable prices.
Bargaining power of suppliers is traditionally high since Target has suppliers nationwide as well as the company involves local suppliers in its outlets located outside the US. The company focuses primarily on the price of goods and suppliers provide goods the company is looking for. The bargaining power of Target’s suppliers is still high, especially today when negative economic trends increase the interest of suppliers in large retailers because large retailers purchase a large amount of products.
Today, the threat of new entrants is relatively low because Target and its major rivals set high barriers to entry and new entrants will have substantial difficulties, while overcoming those barriers. As a result, Target is in a safe position in regard to new entrants.
Similarly the threat of substitute products is low too, although there is a risk of the increasing role of online commerce, which they cannot fully replace Target at the moment. Target still holds a strong position in the market.
On the other hand, the competitive rivalry within the industry is tight since Target faces a strong competition from the part of Wal-Mart and other major retailers. In such a way, Target has to expand its market to maintain its competitive position in the market.
Intensive Strategy of Target
The market penetration of Target is high. At any rate, Target is one of the leaders of retail industry in the US and the company holds a strong position in international markets (Breneman & Taylor, 1996). More important, the company keeps growing and penetrating new markets.
The market development is also high since the company has an extensive experience of operations in the US and international markets and customers are accustomed to products they purchase from Target.
The product development remains high, although the company steadily introduces new products respectively to demands of customers.
SWOT Analysis
The major strengths of Target are the well-developed chain of discount stores in the US as well as other countries (Russo & Shoemaker, 2003). The company also has substantial financial resources.
On the other hand weaknesses of the company include the high personnel turnover and certain bureaucratization of the company.
The major threats Target may encounter are the ongoing economic recession and deterioration of economic trends in international markets; the slow business development that may let rivals of Target outpace the company (Klein, 1999).
Nonetheless, Target may use large opportunities to expand its market share since the economic crisis may be favorable for accelerated expansion of the network, which may be costly at the moment, but will bring positive effects in a long run.
Conclusion and Recommendations
Thus, Target holds a strong position in the market but the company faces a tight competition from Wal-Mart and other major retailers. Hence, Target should focus on the international market expansion to minimize negative effects of the economic recession in the US and to gain a larger market share worldwide.
