Target Business Level Strategy
In the retail market, the brand is the full experience plus the value of money. A company must decide how to implement these factors in their business-level strategy, and then they can compete effectively with rivals. Target has decided to choose a differentiation strategy towards providing the value of money and a full shopping experience. Target has differentiated from competitors by expanding their food selection and improving their customer service.
On the first page of Target’s annual report “A Fresh Approach” is spelt with apples, pineapples, and bananas. Target’s pun on “fresh” symbolizes their fresh thinking approach to the upcoming year, but also their commitment to developing a large selection of quality food products. This is later emphasized on page eight by the introduction of Target’s PFresh line. This new layout features an expanded food assortment of high frequency perishables, bakery items, fresh meats, dairy products, and frozen foods. Target believes PFresh will reinforce to consumers that Target is a one stop shopping destination. Since Target already provides household necessities, clothing, shoes, electronics, and everything else needed for daily life, adding food will further differentiate from competitors who just provide food or household objects. The weakness in this strategy is that Target will have a hard time achieving economies of scale. Economies of scale are cost deductions derived from large sales volume (Contemporary Management, 151). Since Target focuses on many different products, they will not be able to charge less than competitors who only supply food. One way consumers distinguish between companies is through comparing prices, thus Target’s lack of economies of scale may result in consumers shopping elsewhere. Target is trying to counter this is by providing a fun, family orientated shopping experience. “Fast, Fun and Friendly is how we approach our work and business, ensuring our guests have an energizing
On the first page of Target’s annual report “A Fresh Approach” is spelt with apples, pineapples, and bananas. Target’s pun on “fresh” symbolizes their fresh thinking approach to the upcoming year, but also their commitment to developing a large selection of quality food products. This is later emphasized on page eight by the introduction of Target’s PFresh line. This new layout features an expanded food assortment of high frequency perishables, bakery items, fresh meats, dairy products, and frozen foods. Target believes PFresh will reinforce to consumers that Target is a one stop shopping destination. Since Target already provides household necessities, clothing, shoes, electronics, and everything else needed for daily life, adding food will further differentiate from competitors who just provide food or household objects. The weakness in this strategy is that Target will have a hard time achieving economies of scale. Economies of scale are cost deductions derived from large sales volume (Contemporary Management, 151). Since Target focuses on many different products, they will not be able to charge less than competitors who only supply food. One way consumers distinguish between companies is through comparing prices, thus Target’s lack of economies of scale may result in consumers shopping elsewhere. Target is trying to counter this is by providing a fun, family orientated shopping experience. “Fast, Fun and Friendly is how we approach our work and business, ensuring our guests have an energizing