Walmart vs Target - Research Paper Example

Walmart Vs. Target Introduction Wal-Mart and Target are two American based retail network companies that are competing with each other for every customer. Every company is eager to gain its competitive advantage through different aspects, including the lowest prices, diverse assortment, good location, etc. Thus, for example, these two discount retailers competed for the New York City market. The goal of this paper is to analyze the profiles, marketing strategies, strengths and weaknesses, growth plans of these two companies and relying on this information to decide which company is better suited to do business within the five boroughs and whether it is fair for Wal-Mart to be denied access to the New York City market. Company’s Profile Walmart Wal-Mart was founded in 1962 in Rogers, Ark by Sam Walton (Walmart Corporate Website, n.d.). Since the time when the first Walmart discount store has been opened, the company grew to 706 stores across the United States (Walmart Corporate Website, n.d.). Walmart’s headquarter is allocated in Bentonville, Arkansas (Walmart Corporate Website, n.d.). In 1969, the company incorporated as Wal-Mart Stores Inc. (Walmart Corporate Website, n.d.). Today the company operates in different formats, including Sam’s Club membership warehouse, supercenters, neighborhood markets, marketside and online stores. Envisioned 40 years ago Walmart’s mission of “saving people money to help them live better” continues to be an incentive for the overall company’s business operating. In addition to the mission statement, the company has developed the Walmart’s Ethical Standards Program and a strong ethical policy, focused mainly on the basic value of respect for all shareholders, including customers, associates, and suppliers (Walmart Corporate Website: Culture, n.d.). Target Target was founded in 1902 by George Draper Dayton and was called as the Dayton Dry Goods Company (Target Website: Our History, n.d.). The first Target store opened in Roseville, Minnesota, in 1962 (Target Website: Our Stores, n.d.). As of today, discount retailer has captured significant market share by having allocated about 1750 stores in 49 states (Target Website: Our Stores, n.d.). By doing business and developing strategic plans for the company, current Chairman, President and CEO of Target, Gregg Steinhafel, follows the idea that: “Diversity is much more than a goal or campaign; it is a core value of the giant retailer (Steinhagel, n.d.). The mission of the company is to “make Target the preferred shopping destination for its guests by delivering outstanding value, continuous innovation and an exceptional guest experience by consistently fulfilling its logo: Expect More. Pay Less (Target Website: Our Mission, n.d.). Besides its main activity, Target demonstrates a strong commitment to communities by providing support to: education activities, volunteerism, different social services, military and veteran assistance and some others (Target Website: Community Outreach, n.d.). Marketing strategies Walmart The key marketing strategy formulated as the Walmart’s logo was based on the principle: Always Low Prices, Always. Therefore, the company’s pricing strategy is to provide the goods sold at the lowest prices. To gain this competitive advantage the management of the company continuously works on the cost reduction programs. Additionally, in order to achieve the maximum amount of potential customers, Walmart began to focus its marketing strategy on different target markets, by differentiating its stores into: Walmart discount stores, Walmart supercenters, Walmart neighborhood markets, marketside, and Walmart.com (Walmartstores Corporate Website, n.d.). While analyzing mainly the Walmart store format, it can be summarized that the size of an average store is 108 000 square feet; these stores are wide and clean; the aisles are brightly-lit and the shelves are stocked with various value-prices general merchandise product, including: family apparel, electronics, toys, health and beauty aids, jewelry, lawn and garden items, home furnishings, sporting goods, houseware, hardware, pet supplies (Walmart Corporate Website: Walmart, n.d.). Common customer of Walmart can be described as person seeking not only the lowest prices but also a good atmosphere, respectful customer service, and goods/products of high quality. Target Target, as well as Walmart, is a discount retailer, aimed at providing customers with the lowest prices. The Brand Promise of the company sounds as: “Expect More. Pay Less”. In order to ensure the customers that they “pay less”, Target has introduced the Low Price promise, according to which the company: compares prices on over 25,000 items; matches the price found in any competitor’s printed advertisement for an identical product; accepts manufacturing coupons, etc. (Target Website: Our Low Price Promise, n.d.). Target positions a shopping process in its stores as a convenient one-stop shopping, which saves both customers’ time and money. The stores of the company are easy and intuitive for shopping; related departments in the stores are placed conveniently to each other and supported with a “racetrack” central aisle (Target Website, n.d.). Plans for the growth Walmart Walmart is planning to continue its growth plans across the United States, mainly through the opening of new stores (supercenters) (Walmart Annual report, 2011). However, Walmart does not exclude an opportunity to expand its business by opening stores of smaller formats, such as grocery stores (Walmart Annual report, 2011). Thus, for example, the company has announced about its plans to open the first convenience format store – Walmart Express, which will sell pharmacy, grocery and limited general merchandise (Walmart Annual report, 2011). In addition to the growth within the country, Walmart will continue its aggressive international growth, in both mature and emerging markets (Walmart Annual report, 2011). Target Target is focused on growing its business during the next decades by adding new locations, investing in currently existing stores, developing new formats for stores and focusing on the target markets outside the United States (Target Annual Report 2010, 4). By developing the international development strategy, Target decided to enter Canadian retail market (Target Annual Report 2010). Additionally, discount retailer is planning to launch a new initiative, known as the CityTarget, developed specifically for densely populated urban areas (Target Annual Report 2010). Thus, the first small urban-format stores are planned to be opened in Los Angeles, San Francisco, Chicago and Seattle in 2012 (Target Annual Report 2010). New York City boroughs: Walmart vs. Target Wal-Mart has been trying to set up its store in the New York City for several times, but failed to do it because the community opposed strongly to the retailer’s strategy. According to the New York Times, the main opposition came from the unions, which accused the retailer of endangering small businesses and mistreating its workers (Harris, 2011). Therefore, people are worried that the significant amount of entrepreneurs will lose their business and many people will lose their jobs. Due to its negative reputation, expressed and known widely as statements: “Low wages, Low morals”, Walmart’s chances to recover seem to be very doubtful. Conclusion In my opinion, Walmart is better suited to do business within the five boroughs of New York City. While this giant retailer can introduce certain challenges to local communities and labor unions, it might increase local competition. As it is well known, competition is a key driver of progress; therefore, entrance of Walmart to the central area of New York City might motivate local entrepreneurs to provide better services, prices, and customer loyalty. I think it is absolutely unfair for Walmart to be denied access to the New York City, because every customer has to get a chance to choose the place for shopping. Opportunity for the customer’s choice drives the competition, therefore makes competitors to improve their service on a continuous basis. References: Harris E. (2011). Wal-Mart Tries a Refined Path Into New York. The New York Times, March 25, 2011. Retrieved from http://www.nytimes.com/2011/03/26/nyregion/26walmart.html Target (2010). Target Annual Report. Retrieved from http://sites.target.com/images/company/annual_report_2010/documents/Target_AnnualReport_2010.pdf Target Website (n.d.). Our History. Target trough the years. Retrieved from http://sites.target.com/site/en/company/page.jsp?contentId=WCMP04-031697 Target Website (n.d.). Our Mission. Retrieved from http://sites.target.com/site/en/company/page.jsp?contentId=WCMP04-031699 Target Website (n.d.) Our Stores. Retrieved from http://sites.target.com/site/en/company/page.jsp?contentId=WCMP04-031761 Target Website (n.d.) Community Outreach. Retrieved from http://sites.target.com/site/en/company/page.jsp?contentId=WCMP04-038399 Target Website (n.d.). Our Low Price Promise. Retrieved from http://sites.target.com/site/en/company/page.jsp?contentId=WCMP04-040399 Steinhagel G. (n.d.) Fostering an inclusive culture. Retrieved from http://sites.target.com/site/en/company/page.jsp?contentId=WCMP04-031762 Walmart (2011). Walmart Annual report. Retrieved from http://walmartstores.com/sites/annualreport/2011/financials/Walmart_2011_Annual_Report.pdf Wal-Mart Corporate Website (n.d.). Our purpose. Retrieved from http://walmartstores.com/AboutUs/9538.aspx Walmart Corporate Website (n.d.) Culture. Retrieved from http://walmartstores.com/AboutUs/295.aspx Walmart Corporate Website (n.d.). Corporate office. Retrieved from http://walmartstores.com/AboutUs/9505.aspx Walmart Corporate Website (n.d.). Walmart discount stores. Retrieved from http://walmartstores.com/AboutUs/7606.aspx Read More