Environmental Analysis of Target Inc.

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Running head: ANALYSIS OF TARGET INC.

Environmental Analysis of Target Inc.

Team B
Contemporary Issues in Leadership and Management
MM590
October 9, 2006
Abstract
Team B conducted an Environmental Analysis and an Industry Analysis of Target Inc. In the Environmental Analysis, competition for customers is always a threat in any business but the success of Target is always looking for new opportunities. The Target Inc. analysis found that competition with the “big box” stores including the availability of substitute products and threats of new entrants are keys to their success. The analysis of the remote environment found new regulations and shifting demographics influence Target’s success. Falling 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 increase internet shopping, become move competitive in smaller towns, globalization, and allow 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. to identify opportunities and threats that may arise in the near future. In this research 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 competition indicates there is availability of substitute produces and threats of new competition entering every year. The retail industry provides steady competition among business and within departments of the organization. Target offers a wide variety of products and services, which leads to an immense competition pool. The organization provides services with photo development, pharmaceutical, prepared food with some locations having chain services, optical, and portrait studio centers. These diverse services provided for the expansion of the competition pool to include non-general retailers. Since retail merchandise is Target’s primary source of profitability, the organization must make proper investments to ensure the quality of these services surpass those of the competition. Quality service in the food preparation department will increase the chances that a customer will pass other fast food companies in order to get the same service at Target. Target competes for the customer’s 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 company involved in general retail offers similar products to the customers. Customers can bring a shopping list to include socks, shampoo, DVD player, and holiday decorations to each of the general retailers with confidence that each company will satisfy the customer’s needs. The differences in each business, which determines a customer’s preference is the organization’s reputation. This reputation is developed by personal experiences, and/or by external influences like media and other consumers. A consumer’s life situation is another influence on a customer’s decision on business of choice. Some families find finical benefits in purchasing items found at Target in bulk at wholesaler. A consumer’s 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 force the customer’s preference to surpass all other factors in choosing a retailer. According to Kijoo and Kim, “… store managers need to give their best effort to enhance their customers' perceived satisfaction because satisfied customers have a greater chance of purchasing merchandise" (2006). The retail business relies solely on the...
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