Environmental Analysis of Target Inc.

Running head compend OF TARGET INC. environmental epitome of designate Inc. team up B modern-day Issues in Leadership and counselling MM590 October 9, 2006 Abstract Team B conducted an Environmental Analysis and an Industry Analysis of laughingstock Inc. In the Environmental Analysis, contestation for clients is always a threat in any business except the winner of object lens is always looking for new putfangled opportunities. The set Inc. abridgment found that rival with the big box stores including the availability of transfigure products and threats of new entrants are keys to their success.The analysis of the remote environment found new regulations and unsteady demographics influence Targets success. F tout ensembleing petroleum prices, confidence in the stock market and families migrating from the city to rural areas were the result of the Industry Analysis. .Our recommendations for overcoming the threats and capitalizing on the opportunities were to affix in ternet shopping, aim move competitive in little towns, worldwideization, and all toldow the Salvation army to silicate donations during the holidays. Environmental Analysis of Target Inc. Team B conducted an Environmental Analysis and an Industry Analysis of Target Inc. o identify opportunities and threats that may arise in the near future. In this look into paper, the team will evaluate the findings and provide recommendations for responding to the issues and opportunities that Target stores face. Environmental Analysis of Competition An analysis of the controversy indicates there is availability of substitute produces and threats of new ambition entering every year. The sell pains provides steady competition among business and within de beginments of the organization. Target be capturechs a wide variety of products and receiptss, which leads to an considerable competition pool. The organization rovides services with photo development, pharmaceutical, prepared food wit h well-nigh locations having chain services, optical, and portrait studio centers. These diverse services provided for the amplification of the competition pool to accept non-general retailers. Since retail merchandise is Targets simple source of profitability, the organization must make proper investments to delay the prime(a) of these services sur establish those of the competition. Quality service in the food formulation department will increase the chances that a customer will pass new(prenominal)wise fast food companies in order to get the same(p) service at Target.Target manages for the customers business in retail merchandise with other discount retailers, department stores, wholesalers, and supermarkets. The competition with other discount retailers is Kmart and Wal-Mart. Each juicy society involved in general retail offers identical products to the customers. Customers can bring a shopping list to include socks, shampoo, DVD player, and holiday decorations to e ach of the general retailers with confidence that each attach to will satisfy the customers exigencys. The differences in each business, which determines a customers preference is the organizations reputation.This reputation is real by personal experiences, and/or by external influences equivalent media and other consumers. A consumers life situation is another influence on a customers decision on business of choice. or so families find finical benefits in purchasing items found at Target in bulk at wholesaler. A consumers location in proximity to businesses is another influential factor. Some of these considerations cannot be altered by a business. Although, Target can offer outstanding service to obligate the customers preference to surpass all other factors in choosing a retailer.According to Kijoo and Kim, store managers need to give their best driving to enhance their customers perceived satisfaction because satisfied customers have a great chance of purchasing mercha ndise (2006). The retail business relies solely on the customers choice in where their currency is spent. The best mode for retaining customers is to provide them with the products or services they desire. Those businesses, which are successful at customer service, will out perform their competition. The final source of competition involves natural 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 have similar job necessities including cashiers, clerks, receivers, managers, and store managers. According to the oblige in Human Resources Department Management Report, companies should aim to identify the approximately suitable candidates as well as track trends in applicants and employees, including reasons for departure, rehire possibilities, twitch performers, and job specifics (2005). The authors maintain that reduction in turnover can positively yarn-dye the profitability of the company. channeles can ope lay differently but this does not change the skill requirements for being a leader. Target defines superior lead performance as the individual who can excel in communicating effectually, managing execution, and demonstrating accountability. Since leadership is not defined by retail experience, Target searches for managers with unhomogeneous experiences including education, military, or public service. As Target is expanding their applicant pool, so is their competition. erstwhile Target recruits strong leaders, retention is significant to the companys success.Therefore, competition alludes Targets sales growth but also inbred growth. Remote and Industry Analysis The analysis of the remote environment found new regulations and a duty period of demographics that influence Targets success and ability to operate. A corporation that conducts an analysis of the environment must surveil all av ailable information. This should include, a comparison of one corporations information a makest others in the same industry, and a look at all influences whether they are market related, legally establish or social trends that affect the environment.For this analysis, we will focus on Target crapper, and their main competition (Bateman & Snell, 2004, p. 56). Overall, the retail industry has seen expandd strength the last year. This is partially the result of move petroleum prices, which has led to increase 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 a same has continued expansion in the e-commerce arena- super ptimistic that forecasts achieve their estimate of 5% over last year (ODonnell, 2006, p. 1). early(a) demographic factors include the continui ng trend of families migrating from the city to rural areas, the grounds of retirees to western states such as Arizona and Nevada, in addition to the law of 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 boilers suit growth rate of 8%.This expansion includes the Super Target stores, which are designed to compete with the Super Wal-Mart, providing grocery as well as retail consumer service (Target yearbook Report, 2005, p. 3). Targets advertising costs have increase by $24 Million, double the increase from the previous year. These expenditures are primarily in the report and media circular areas, but Target also increased expenditures on cogitate advertising campaigns targeting college students as they return to class in the fall (Target A nnual Report, 2005, p. 29).This type of advertising has proven fruitful. This is an example of how Target is carving their recession in the market by focusingon a part of the marketplace that has specific needs (Bateman & Snell, 2004, p. 524). Another contributing factor to the overall increase in budget was the result of a, decline in spectator ship of the national networks and the increase in media fragmentation (Target Annual Report, 2005, p. 11), which has caused a fundamental shift in advertising, utilize to a greater extent web based services (Target Annual Report, 2005, p. 11).To capitalize on the continued growth of on-line(a) marketing and distribution, Target renewed its agreements with Amazon reiterating their commitment to, remain center on our core strengths of merchandising and design, and while continuing to benefit from Amazons cornerstone and expertise (Target E-Commerce, 2006, p. 1). The article goes on to explain how Targets goal is to provide the net on-lin e shopping experience to the customer. This methodology serve wells ensure Target stiff a viable 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 build relationships to enhance the shopping experience with industries such as Starbucks and pizza pie Hut (Target Annual Report, 2005, p. 5). This is an important part of its effort to distinguish itself from the anticipate of the retail environment.A study done by Moorehouse in 1984, shows that states that purely regulate store-opening hours have fewer large stores. In these cases, the consumer pays more for the products in the larger stores, because operating 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 tremendous growth and profits are high. From the studies, it appears that Target has unbroken 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 homogeneous Target. many times 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 interdependence and decreased market barriers primarily due to increased connectivity (Bateman & 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 global 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 abundant business in the United States. Targets plan to renew a buzz off 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. mavin recommendation for the company would to promote more internet shopping in their advertisements. This will especially help with the stores fixed in certain 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 ch ain gain more profits than the competition in those areas.In the smaller towns where companies like Target are considered the big box stores, the company can beget more competitive 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 billion 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 maj or companies consider 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 eliminate any charities soliciting for money inside or outside(a) of their stores.This was a huge headliner when the company stated nationwide that they were not going to allow the Salvation soldiers (bell ringers) outside of their stores during the holidays. Targets defense was if they allow the Salvation Army in, they would have to let all charities at their store. This created uproar with many consumers. Many customers will no long-dated shop at Target stores because of this. One of Targets biggest competitors, Wal-Mart has an prefer 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 back for the holidays. This will increase their pro fits during that season 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). ledger of Business Strategy. Outsourcing The New Partnership. 18(4), 4 8-55. Retrieved from the Thomas Gale database on October 4, 2006. Human Resources Department Management Report. (2005). How Closed-Loop Analytics at Albertsons Reduces Turnover & 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 Academy of Business. 9(1), 233 240. Retrieved from EBSCOhost database October 6, 2006. ODonnell, J. (2006).USA TODAY Holiday Season gross revenue Forecast. Retrieved October 5, 2006 from USA Today web site http//www. usatoday. com/money/industries/retail/2006-09-18-retail-usat_x. htm Tanguay, George. (1995). frugal Inquiry. Shopping Hours and Price Levels in the Retail Industry A suppositional 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. zht ml? c=65828=irol-reportsAnnual