Environmental Analysis of Target Inc.

Running head ANALYSIS OF TARGET INC. environmental Analysis of channelize Inc. Team B Contemporary Issues in leaders and Management MM590 October 9, 2006 Abstract Team B conducted an environmental Analysis and an pains Analysis of tush Inc. In the Environmental Analysis, tilt for nodes is always a threat in any business merely the success of gull is always looking for rising opportunities. The station Inc. compend found that competition with the big box stores including the availability of substitute products and threats of new entrants be keys to their success.The compend of the remote environment found new regulations and electrical switching demographics influence charges success. Falling petroleum prices, confidence in the stock mart and families migrating from the city to rural aras were the result of the labor Analysis. .Our recommendations for overcoming the threats and capitalizing on the opportunities were to affix cyberspace shop, become move militant in smaller towns, globalization, and throw overboard the redemption Army to silicate donations during the holidays. Environmental Analysis of range Inc. Team B conducted an Environmental Analysis and an Industry Analysis of rear end Inc. o identify opportunities and threats that whitethorn arise in the near future. In this research paper, the team disclose evaluate the findings and provide recommendations for responding to the issues and opportunities that steer stores face. Environmental Analysis of Competition An summary of the competition indicates there is availability of substitute produces and threats of new competition entry every year. The sell industry provides unbendable competition among business and deep down departments of the agreement. stooge offers a wide variety of products and services, which leads to an immense competition pool. The boldness rovides services with photo development, pharmaceutical, prepared food with some locations having chain service s, optical, and depicting studio centers. These diverse services provided for the refinement of the competition pool to intromit non-general retailers. Since retail trade in is sterns primary source of advantageousness, the transcription must make proper investments to ensure the quality of these services fleet those of the competition. Quality service in the food preparation department result add-on the chances that a customer allow pass other immediate food companies in order to get the uniform service at Target.Target competes for the customers business in retail deal with other discount retailers, department stores, wholesalers, and super commercializes. The competition with other discount retailers is Kmart and Wal-Mart. from each one company involved in general retail offers similar products to the customers. Customers sack up bring a obtain list to embroil socks, shampoo, DVD player, and holiday decorations to each of the general retailers with confidence tha t each company volition pay off the customers needs. The differences in each business, which determines a customers preference is the organizations reputation.This reputation is developed by individual(prenominal) experiences, and/or by external influences like media and other consumers. A consumers life situation is a nonher(prenominal) influence on a customers decision on business of choice. Some families find special benefits in buying items found at Target in bug aside at wholesaler. A consumers location in proximity to businesses is a nonher influential factor. Some of these attendations cannot be altered by a business. Although, Target can offer outstanding service to force the customers preference to surpass all other factors in choosing a retailer. consort to Kijoo and Kim, store managers need to give their scoop out effort to upraise their customers perceived satisfaction because satisfied customers select a greater chance of purchasing merchandise (2006). The re tail business relies solely on the customers choice in where their money is spent. The best method for retaining customers is to provide them with the products or services they desire. Those businesses, which are successful at customer service, will out practice their competition. The final source of competition involves internal aspects of the company. The competition produces threats to an organizations retention.In each of the organization in which Target competes in sales, Target also competes in filling similar jobs. All retailers abide similar job necessities including cashiers, clerks, receivers, managers, and store managers. According to the clause in military man Resources Department Management Report, companies should aim to identify the most suitable candidates as well as track trends in applicants and employees, including reasons for departure, rehire possibilities, top performers, and job particularizeds (2005). The authors put forward that reduction in turnover ca n positively affect the profitability of the company.Businesses can operate differently but this does not change the learning requirements for being a leader. Target defines superior leadership performance as the individual who can excel in communicating effectively, managing execution, and demonstrating accountability. Since leadership is not defined by retail experience, Target searches for managers with various experiences including education, military, or existence service. As Target is expanding their applicant pool, so is their competition. Once Target recruits lovesome leaders, retention is significant to the companys success.Therefore, competition affects Targets sales growth but also internal growth. Remote and Industry Analysis The analysis of the remote environment found new regulations and a shifting of demographics that influence Targets success and ability to operate. A corporation that conducts an analysis of the environment must review all visible(prenominal) inf ormation. This should include, a comparison of one corporations information against others in the same industry, and a look at all influences whether they are grocery store related, legally based or social trends that affect the environment.For this analysis, we will taper on Target Corporation, and their main competition (Bateman &038 Snell, 2004, p. 56). Overall, the retail industry has seen keep strength the last year. This is partially the result of falling petroleum prices, which has conduct to change magnitude trips to the store, and increase in spending. Adding to the optimism is an increase in confidence in the stock market. Forecasts are for retail sales to continue to increase as they ramp up for the November-December holiday season. In response, the retail industry and Target alike has act expansion in the e-commerce arena- highly ptimistic that forecasts achieve their imagine of 5% over last year (ODonnell, 2006, p. 1). Other demographic factors include the contin uing trend of families migrating from the city to rural areas, the movement of retirees to western states much(prenominal) as Arizona and Nevada, in rise to power to the continuation of retirees flooding into Florida. To capitalize on these opportunities, several initiatives have been seen in the industry (PRB, 2006, p. 1). Target has continued a steady yet comprehensive expansion project estimating the addition of 60-65 new stores this next year, with an overall growth rate of 8%.This expansion includes the Super Target stores, which are designed to compete with the Super Wal-Mart, providing food product as well as retail consumer service (Target annual Report, 2005, p. 3). Targets advertize costs have increased by $24 Million, double the increase from the previous year. These expenditures are primarily in the newspaper and media circular areas, but Target also increased expenditures on focused advertisement campaigns targeting college students as they return to class in the fall (Target yearbook Report, 2005, p. 29).This type of advertising has proven fruitful. This is an example of how Target is carving their niche in the market by focusingon a part of the marketplace that has specific needs (Bateman &038 Snell, 2004, p. 524). Another contributing factor to the overall increase in budget was the result of a, decline in viewer ship of the bailiwick networks and the increase in media fragmentation (Target one-year Report, 2005, p. 11), which has caused a fundamental shift in advertising, utilize more web based services (Target Annual Report, 2005, p. 11).To capitalize on the continued growth of on-line marketing and distribution, Target renewed its agreements with Amazon reiterating their commitment to, remain focused on our centre of attention strengths of merchandising and design, and while continuing to benefit from Amazons innovation and expertise (Target E-Commerce, 2006, p. 1). The article goes on to explain how Targets goal is to provide the ultimate on-line shopping experience to the customer. This methodology helps ensure Target remains a executable competitor in the on-line retail industry.Distinguishing itself from the competition, Target continues to maintain a vibrant image through its promise to ensure its, distinctive merchandise provides style, timeliness and quality at best in class prices (Target Annual Report, 2005, p. 5). As part of this brand recognition initiative, Target continues to give relationships to enhance the shopping experience with industries such as Starbucks and Pizza Hut (Target Annual Report, 2005, p. 5). This is an important part of its effort to distinguish itself from the rest of the retail environment.A study make by Moorehouse in 1984, shows that states that strictly regulate store-opening hours have fewer large stores. In these cases, the consumer pays more for the products in the larger stores, because run costs are so much higher. This could affect some(prenominal) of the Targ et stores because it will cost the company more money to operate to give their customers more shopping flexibility, or they have to increase the prices. Target has large growth and pelf are high. From the studies, it appears that Target has kept their prices at the same cost, no matter what.Some of these states include many smaller towns that would not survive without the big box stores and welcome companies like Target. Many generation even if the cost is higher, the profits are high because of the demand (Tanguay, 519). globalization is a concept of the international marketplace that influences increased trade, economic interdependency and decreased market barriers primarily due to increased connectivity (Bateman &038 Snell, 2004, p. 538). Target has been no exception with recent expansion of services in India described to perform business functions more productively (Target Annual Report, 2005, p. ). This global expansion is a direct result of the environment, which fosters g lobal interconnectivity, and more cost- effective operations sourced by major industry, lower labor costs, technology, and an ever-expanding international market. Recommendations Target Corporation has increased advertising dollars to ensure the corporation is targeting customers needs. The increase has done well for the company due to increase in profits over time. The internet-shopping arena is a long business in the United States. Targets plan to renew a contract with Amazon was a good decision.This enables customers greater flexibility. Many consumers do not like to drive to find the product they need and this helps Target increase profits. One recommendation for the company would to promote more internet shopping in their advertisements. This will especially help with the stores located in definite states where there are stricter regulations on store hours. This helps the consumer in those areas and gives them more flexibility. This will also help the retail chain gain more p rofits than the competition in those areas.In the smaller towns where companies like Target are dish outed the big box stores, the company can become more hawkish with the local businesses. Many mom and pop stores in smaller communities consider Target a threat because they can offer lower prices on many products. Target should evaluate the markets in these smaller towns to see what the consumers are looking for and at what cost. Globalization has a huge impact on the retail industry. A survey of American organizations shows that in 1996 $100 gazillion were spent by large organizations on outsourcing contracts.This helps companies like Target build more alliances over seas and reduce costs in technology and labor. This helps the retail chain spend more money on advertising and marketing ventures in the Unites States. Target should continue. On the other hand, the company should look into how many jobs that they are providing here in the US. Consumers like to see major companies c onsider the welfare of the job economy in the states (Greco, 50). One recommendation is for Target to consider working better with charities. The Target Corporation decided to turn down any charities soliciting for money inside or outside of their stores.This was a huge headliner when the company stated nationwide that they were not going to allow the Salvation Army (bell ringers) outside of their stores during the holidays. Targets defense was if they permit the Salvation Army in, they would have to let all charities at their store. This created brouhaha with many consumers. Many customers will no longer shop at Target stores because of this. One of Targets biggest competitors, Wal-Mart has an advantage because of this. Many of the Target locations are relatively close to the Wal-Mart stores and ecause of the cost proximity Target is losing business. The best decision for Target is to let the Salvation Army grit for the holidays. This will increase their profits during that sea son and may potentially bring back old customers. This does not mean that they have to let all charities at their stores. Allowing this major nonprofit organization will help with the competition tremendously. In summary, Team B found in the analysis that Target Inc. provides steady competition with the big box stores including the availability of substitute products and threats of new entrants.The analysis of the remote environment found new regulations and shifting demographics that influence Targets success. Our recommendations for overcoming the threats and capitalizing on the opportunities were to increase internet shopping, become move competitive in smaller towns, globalization, and allow the Salvation Army to silicate donations during the holidays. References Bateman, T. and Snell, S. (2004). Management The new competitive landscape. 6th ed. New York McGraw-Hill. Greco, JoAnn. (1997). Journal of Business Strategy. Outsourcing The New confederacy. 18(4), 48-55. Retrieved fro m the doubting Thomas Gale database on October 4, 2006. Human Resources Department Management Report. (2005). How Closed-Loop Analytics at Albertsons Reduces disorder &038 Saves Millions of Dollars. 5(3), 2-4. Retrieved from EBSCOhost database October 6, 2006. Kijoo, K. , and Kim, E. (2006). Suggestions to enhance the cyber store customers satisfaction. Journal of American honorary society of Business. 9(1), 233 240. Retrieved from EBSCOhost database October 6, 2006. ODonnell, J. (2006).USA TODAY Holiday Season Sales Forecast. Retrieved October 5, 2006 from USA nowadays web site http//www. usatoday. com/money/industries/retail/2006-09-18-retail-usat_x. htm Tanguay, George. (1995). Economic Inquiry. Shopping Hours and scathe Levels in the Retail Industry A Theoretical and Empirical Analysis. 33(3), 516-525. Retrieved from Thomas Gale database on October 5, 2006. Target Annual Report. (2005). Retrieved October 4, 2006 from Target web site http//investors. target. com/phoenix. zhtm l? c=65828=irol-reportsAnnual