Strategic Management of Target - Assignment Example

Introduction Strategic management is activities that revolve around the formulation and implementation of major goals and initiatives undertaken by people in top management of the organization on behalf of the business owners. The formulation and implementation of this goals and initiatives are carried in line with the available resources and assessment of the business internal and external environment that the business competes with. Internally, the business is assessed by its strength and weaknesses while externally the business will be assessed on the threats that can limit its growth and the opportunities that can lead to its progress (Schilling, 119). When formulating strategies, environmental analysis involves the analysis of an external environment such as political, social, economic, technological, and legal and landscape. Analysis of the internal environment will involve assessing the strengths and weaknesses of the organization human and material resources such as workers and IT system. Target Corporation the second largest American retailing company dates which its foundation back in 1902. It has its headquarter in Minneapolis Minnesota. Its main competitor is the Wall Mart retailing company, which is the largest retailing company in America. The business opened its first Target store in 1962 in Roseville Minnesota. The target stores started increasing in numbers, and the company became a corporation in 2000. By the year 2013, target was operating almost two thousand target stores in different regions most notably in the United States and Canada (Aaker, P. 63). Target stores are usually large and cover about 95000 to 135000 square feet. They carry a variety of goods that includes hard lines, soft lines (clothing) and a few groceries. The items found in the target stores specifically includes clothing, shoes, jewelry, beauty and heath products, electronics, DVDs, pet supplies, hardware supplies, beddings, sporting goods and kitchen supplies. The stores also carry seasonal merchandise, which includes Christmas decorations during the months of November and December. Depending on the location, the stores might also contain target optical, target clinic, and a portrait studio. By offering a variety of items to the customers, target stores emerge as a business that can survive in a competitive market (Bouwens and Kroos, P. 171). SWOT analysis of the target stores To survive in a competitive environment, a business should be able to assess its internal and external environment. In the internal environment, the business should be able to know its strengths and weakness. The strengths being factors within the organization that makes it compete favorably with the other competitors while weakness are factors within the organization that makes the business not to compete favorably with the other competitors. In external environment, the business should assess its threats and opportunities to be able to adjust to the market changes. This will enable the business to thrive in such environment (Helms and Nixon, P. 215). Strengths of Target stores The target stores have a number of strengths that makes them survive in the today’s competitive retail business. The stores have more than 365,000 employees who have various knowledge and skills. These employees provide friendly services to the customers. The friendly services provided make the customers have loyalty to the target stores. The employees also have knowledge on how to operate the electronic machines that are sold in the stores. They, therefore, teach customers how to operate electronic devices that may appear complex for them to operate. The public relations employees also maintain a good image of the retail business to the customers. They usually accomplish this through advertisement and publicity. The stores usually stocks variety of items, which includes clothing, shoes, jewelry, health and beauty products, electronics, compact discs, beddings, kitchen supplies, sporting items, toys, pets, automotive supplies and hardware supplies. Apart from these items, the also offer seasonal merchandises that include, patio furniture during summer and Christmas decoration during the month of November and December. These varieties of products ensure a wide market for the target store business. The variety of goods sold under one roof also attracts customers who like making their shopping under one roof. These ensure a good revenue for the target business (Gao and Peng, P 796). The American target stores have also been the recipient of several awards and recognition. The stores were ranked 36th as Fortune 500 by the year 2013 and were a component of the Standard and Poor’s 500 index. This has helped boost the morale of the stores workers and also improve the company’s image among the customers. The target stores also offers target financial and retail services, which issues target credit cards that enable customers to save five percent of each purchase and designate a school for targets take charge of education program and accumulate a lot of pharmacies rewards. This makes the stores have a competitive advantage over the other businesses that do not offer this service. The American target stores are also sponsors of many major events and sporting events. This helps enhance its brand visibility. By sponsoring these major sporting events, many people become identified with the company, this opens a wider market for the company’s products and brands. By doing this, ready market is assured (Gao and Peng, P. 796). Weakness of the target stores Though the American target store is the second largest retail company in America after Wall Mart, it has a number of weaknesses that makes it lag behind in the retail business. The stores do not have many stores as compared to its major competitor wall mart. This makes target store to have a limited share of the market as compared to wall mart. The American target stores also do not have expansion in the international markets. Despite being a strong brand, target stores brand has not penetrated into the international markets as compared to the brands of the wall mart retail company. The American target stores have no branches in Hawaii, Alaska, and Vermont. This limits their accessibility to the market share. The retail company has also had many legal cases, which affected their brand image. Opportunities for Target stores A great deal of opportunities for growths exists for the American target stores. This includes expansion of the international market. Although, the target stores brands have not penetrated to the international market; the company has higher quality and innovative brands that can make it sale in the international market apart from Canada. Other opportunities that exists for the target stores includes, diversification of its grocery department, engaging in more exclusive design partnership, increasing the number of advertisement for private brands, and enhancing effort to be more environmentally friendly making product that do not pollute the environment (Gielnik, Zacher, and Frese, P.127). Threats to the American target store As the target stores strive to be competitive in the market, several drawbacks exist in the external environment that makes it difficult to expand. The target store experiences huge competition from other retail businesses in the market. This includes businesses like Wall Mart, Aeon, and Macys retail companies. These companies pose a threat to the market share of the target stores. The increasing cost of raw materials also increases the production cost of the target market stores. This pushes the prices of commodities high which makes the customers shy away from purchasing the goods from the stores. In addition, the difficult economic situation makes the American citizens not able to purchase goods from the stores. The US government also charge higher taxes on the retail businesses. The high annual government taxes and increasing interest rates increase the production cost of the target stores. This increases the prices of commodities which limit the number of purchases by the customers who come to shop at the Target store (Roberto, Bohmer, and Edmondson, P. 204). Conclusion By carrying out a comprehensive SWOT analysis, a business will be able to scan its internal and external environment to identify the strengths and opportunities that can lead to the prosperity of the business and at the same time identify the weakness and threats that can impair its growth. This will enable the top management to come up with strategies that can help the business compete favorably with the other competitor in the market. The American target stores have many strengths and opportunities that can make it dominate the American market in the near future. The high quality and innovativeness of its brand and the availability of unique services such as target visa and target card can make it take the international market with ease. Although opportunities for expansion exist, the target stores need to address their weakness and threats to remain competitive in the market. They need to come up with quality and innovative brands that can help them outdo their competitors in the market to have a lion’s share of the market. Work cited Aaker, David A. Strategic Market Management. N.p., 2011. Bouwens, Jan, and Peter Kroos. “Target Ratcheting and Effort Reduction.” Journal of Accounting and Economics 51 (2011): 171–185. Gao, Chang Yuan, and Ding Hong Peng. “Consolidating SWOT Analysis with Nonhomogeneous Uncertain Preference Information.” Knowledge-Based Systems 24 (2011): 796–808. Gielnik, Michael M., Hannes Zacher, and Michael Frese. “Focus on Opportunities as a Mediator of the Relationship between Business Owners’ Age and Venture Growth.” Journal of Business Venturing 27 (2012): 127–142. Helms, Marilyn M., and Judy Nixon. “Exploring SWOT Analysis – Where Are We Now?: A Review of Academic Research from the Last Decade.” Journal of Strategy and Management 2010: 215–251. Roberto, Michael A., Richard M J Bohmer, and Amy C. Edmondson. “Facing Ambiguous Threats.” Harvard Business Review 84 (2006). Schilling, Melissa A. Strategic Management of Technological Innovation. Vol. 23. N.p., 2006.  Read More