Target Strategic Outline

I. Mission Statement:

II. External Environmental Analysis

a. Remote environment пÑ--Ð... these are the factors, which affect all businesses, and frequently, neither the business nor the industry has any control over them пÑ--Ð... 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. TargetпÑ--Ð...s 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