Target Strategic Outline
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I. Mission Statement:
II. External Environmental Analysis
a. Remote environment піРthese are the factors, which affect all businesses, and frequently, neither the business nor the industry has any control over them піЅ examples:
i. Entry barriers
ii. Social
iii. Political
iv. Technological
v. Ecological factors
vi. Economic factors:
The economy has a major influence over the retail industry. TargetпіЅs market has a very broad scope. When the economy affects the purchasing ability of its customer base, customers turn to less expensive commodities offered by discount retailers.
b. Industry environment:
i. Entry barriers
A. Economies of scale: Target can compete well against county general stores, surplus and salvage stores, Army and Navy goods stores, warehouse club stores, and catalog showroom stores because they have a significant cost advantage over any new rival.
B. Product Differentiation: Target creates high entry barriers through their high levels of advertising and promotion (Essentials of Strategic Management)
ii. Supplier power
iii. Buyer power
iv. Competitive rivalry: The increased productivity gap between Wal-Mart and Target is affecting both companies in terms of competitive stances. Wal-Mart will attempt to exploit the existing gap by lowering prices further and creating an even stronger advantage. This is highlighted through the disparity in sales per square foot; 1999 was the narrowest, with Wal-Mart selling $441 and Target selling $260; by 2002 Wal-Mart