Culmination Project-Group 04-Stacey Hopkins

Sun Devil Strategic Managers
Tiffany Luman, Meghan Radcliffe, Rachael Stiver, Stacey Hopkins, Lyneigh Palacios,
and Lerissa Burns
OGL355: Leading Organizational Innovation and Change
Bill Erwin
Tuesday, March 24, 2022
Arizona State University

Table of Contents
Organization Selection....................................................................................................................4
Organization Options..................................................................................................................4
Target.......................................................................................................................................4
Alaska Airlines..........................................................................................................................5
Geico........................................................................................................................................5
Team Expectations and Project Plan..........................................................................................6
Communication Method(s)......................................................................................................6
Collaboration Method(s)..........................................................................................................6
Conflict Management..............................................................................................................7
Consequences of Non-Participation.........................................................................................7
Module 2 Team Project Deliverable -Environmental Analysis..................................................8
Team Lead: Rachel Stiver.........................................................................................................8
Assignment Deliverables..........................................................................................................8
Individual Responsibilities........................................................................................................8
Module 3 Team Project Deliverable -SWOT Analysis................................................................9
Team Lead: Lyneigh Palacios...................................................................................................9
Assignment Deliverables..........................................................................................................9
Individual Responsibilities........................................................................................................9
Module 4 Team Project Deliverable -Competitive Advantage................................................10
Team Lead: Stacey Hopkins...................................................................................................10
Assignment Deliverables........................................................................................................10
Individual Responsibilities......................................................................................................10
Module 5 Team Project Deliverable -Going Global.................................................................11
Team Lead: Tiffany Luman.....................................................................................................11
Module 6 Team Project Deliverable -Executive Presentation.................................................12
Team Lead: Meghan Radcliffe...............................................................................................12
Module 6 Team Project Deliverable -Sector Env Analysis Comparison..................................13
Team Lead: Lerissa Burns......................................................................................................13
Organization Selection Conclusion...........................................................................................14
Environmental Analysis................................................................................................................15
Industry Analysis.......................................................................................................................15
Threat of New Entrants..........................................................................................................15
Bargaining Power of Buyers..................................................................................................16
Bargaining Power of Suppliers...............................................................................................17
Threat of Substitute Products................................................................................................17
Industry Rivalry......................................................................................................................18
Target Market...........................................................................................................................18
Competitive Advantage Strategies to Maintain Target Market..............................................19
Corporate Focus on Employees and Customer Satisfaction....................................................19
Smaller Stores, Busier Locations............................................................................................19
Curbside Pickup......................................................................................................................20
Focus on Millennial Shoppers and Name Brands..................................................................20
Staying on Trend, Offering Sustainable Options....................................................................21
Target’s Loyalty Program – Target Circle..............................................................................22
Environmental Analysis Conclusion.........................................................................................22
SWOT Analysis Introduction.........................................................................................................23
SWOT Analysis...........................................................................................................................23
Strengths................................................................................................................................24
Weaknesses...........................................................................................................................26
Opportunities.........................................................................................................................27
Threats...................................................................................................................................30
SWOT Conclusion......................................................................................................................32
Target’s Competitive Advantage..................................................................................................33
Introduction...............................................................................................................................33
Defining Competitive Advantage.............................................................................................33
Point of View.............................................................................................................................34
Resource Based View.............................................................................................................35
Industrial Organization View.................................................................................................35
Guerilla View..........................................................................................................................36
Competitive Advantage Conclusion.........................................................................................37
Works Cited...................................................................................................................................39
Organization Selection and Expectations 4
Organization Selection
The Sun Devil Strategic Managers conducted a Zoom meeting to initiate formal introductions with fellow
team members, discuss the overall assignment, establish peer expectations, and decide what
organization we would be choosing for our initial presentation. Utilizing open communication in our
Zoom meeting , it allowed for a cohesive and effective discussion that established boundaries and initial
assignments. It is understood that some tasks will be more difficult than others, but with support from
our team members, we will be able to achieve our goals.
Organization Options
As a team, we have selected three separate organizations in the commercial sector to perform a
strategic case study on; Target, Alaska Airlines, and GEICO. Further explanation will illustrate why these
corporations have been chosen for an in-depth analysis. The order in which they are presented indicate
the level of preference
Target
Target was continuously mentioned by many team members when discussing commercial companies as
the subject of further analysis. Target is a well-known company that has become a household name, and
the go-to stop for items ranging from produce to home decor and more.
With a vast number of brick-and -mortar stores that continue losing business to the ease of internet
marketplaces such as Amazon, Target has achieved sustained growth. With the onset of the COVID-19
pandemic, they were selected as an essential business and, in turn, realized record breaking sales in
2020 (Target, 2022). In the last couple of years, Target examined what their customers were looking for,
and added services such as same-day fulfillment, order pickup, along with strategic partnerships to offer
delivery services through organizations like Shipt. Even after other “non-essential” businesses re-
opened, Target has still continued to grow not only their stores, but their employees as well through
wage increases and career development (Target, 2022).

Alaska Airlines
We thought it vital to include at least one organization within the travel industry, as the pandemic has
impacted and changed this industry in many ways. Air travel is a lucrative and important business sector,
and Alaska Airlines has publicly available information, thus making it easily researched by the team,
should it be chosen.
Alaska Airlines was founded in 1932 and went through multiple name changes prior to its ultimate
decision of the Alaska moniker in 1944. The company has continued to grow and serves the United
States and some of its territories (Alaska Airlines). Choosing a company within air travel creates a fun
challenge, as there are many aspects to an airline and many facets to explore. Alaska Air is a single-
business entity with a large target market that could easily include each team member. As a team, we
will work to further understand what makes people go into this demanding business sector and explore
some of the strategies used to succeed.
Geico
When evaluating the various commercial organizations to analyze, the team considered Berkshire
Hathaway; however, it was ultimately decided to focus on a smaller subsidiary of Berkshire Hathaway,
GEICO. GEICO was established in 1936 by Leo and Lillian Goodwin to provide insurance options to U.S.
government employees and military personnel (GEICO, 2022, para. 2).
Since its inception, GEICO has proven to be an exceptional company by expanding its offerings from
solely government employees and military personnel to the private sector and has become the second-
largest auto insurer in the United States. As an organization under Berkshire Hathaway umbrella,
“Fortune magazine has named Berkshire’s property-casualty insurance operation the most admired in
the country” (GEICO, 2022, para. 5).
As a team, we will further explore why GEICO is the most admired insurance operation in the country,
and how the company established a competitive advantage over their competition? GEICO is a
financially stable company and maintains high customer service ratings. Our team would like to assess
the past, and current, successes of the company to better understand the implemented strategies
utilized by management to has led to their continued longevity in the insurance industry.
Team Expectations and Project Plan

When a team of people are tasked with the responsibility of completing a collaborative group project
together, it is essential for clear expectations to be established and to develop a planning timeline to
achieve a common goal. The common goal for the Sun Devil Strategic Managers is to create a mini-
strategic case study on a commercial organization, which will be assigned by the instructor in module 2,
from one of the aforementioned selections.
The team is comprised of academic and/or working professionals, each with demanding schedules, thus
making it essential to create a concise timeline of deliverables that can be managed and adapted.
According to the Harvard Business Review (2021), “clarifying and tracking commitments” established for
individual and group tasks should be defined in the planning stages of a project (para. 10). By instituting
clear tasks for everyone, team members can track their own progress to ensure personal and team
timelines are being adhered to.
Communication Method(s)
The primary methods of communication chosen by the group will be email, text, and canvas.
Additionally, weekly Zoom calls will be employed to clarify expectations for the upcoming deliverables
and to make any necessary adjustments.
Collaboration Method(s)
Initial communique began via canvas upon receiving our team assignments. After further discussion, it
has been agreed that a text thread will be the primary form of communication. We will also collaborate,
when necessary, with our ASU email.
Employing Google docs will allow us to work together in real time. Additionally, the team has decided to
keep the basic template in the format we received it in, with minor modifications to facilitate a more
user-friendly experience.
Lastly, the Sun Devil Strategic Managers will employ video/audio two days prior to team assignment
deadlines via Zoom. These Zoom meetings will also help us to build rapport with each other, in light of
this being an entirely virtual team.?
Conflict Management
Conflict is a very real and potentially hazardous derailment of the synergistic nature of any team project.
The techniques that should be utilized is outlined below:
1. Cool Off – tempers can flare and cause people to “shut down” and not be open to
collaboration. A cooling off period should be employed to ensure that calmer heads can
come together to define solutions.
2. Offer Solutions – no solution is bad and therefore all must be presented and received with
an open mind.
3. Brainstorm – with calmer heads and additional solutions having been presented, a
collaboration will be held in order to devise a few potential resolutions.
4. Select and agree upon final solutions
Consequences of Non-Participation
Participation is vital to the overall success of the project and should one team member not participate, it
will be essential for others to address the shortfall. After further contemplating this topic, it was agreed
that should someone miss to a meeting, without communicating ahead of time, they will earn 2 fewer
points than the rest of the team on the assignment.
Furthermore, should one fail to complete their previously assigned, and agreed upon, tasks, it has been
decided that they will receive a “0” for the milestone that is currently under evaluation.
Should a member fail to meet expectations and a grade reduction be necessary, Professor Erwin will be
notified, by email, from that week’s Team Leader. Lastly, should it be necessary to include an outside
party to give final judgement upon potential arguments, Professor Erwin will be asked to be the
arbitrator and his decision will be final, after all participants have had the opportunity to present their
case.
Module 2 Team Project Deliverable -Environmental Analysis

Due May 30, 2022 11:59PM Arizona Standard Time
Team Lead: Rachel Stiver

Zoom meeting on May 28, 2022 at 3PM Pacific Standard Time.
Assignment Deliverables
Make an environmental analysis of the team's organization assignment with at least 500 words in APA
format submitted by Rachael Stiver. This includes an overview of the target market, using Porter’s five
forces of competition, and strategies that would work with the company's target market. The target
market will be specific with details.
Individual Responsibilities
 Lyneigh Palacios – Find 2 Competitive Advantage strategies to maintain target market. Write
100-word minimum APA formatted sections of the strategies. Due by May 29, 2022 3PM Pacific
Standard Time.
 Rachael Stiver - Determine the industry's target market, establish a reference page, write the
introduction and the conclusion for the assignment. Responsible for turning in final product.
Due by May 30, 2022 7PM Pacific Standard Time.
 Stacey Hopkins - Find 2 competitive advantage strategies to maintain target market. Write 100-
word Minimum APA formatted sections of the strategies. Due by May 29, 2022 5PM Pacific
Standard Time.
 Meghan Radcliffe - Threat of new entrants, bargaining power of suppliers, and bargaining power
of buyers. Write a 100-word minimum APA formatted overview. Split work with Lerissa Burns.
Due by May 29, 2022 5PM Pacific Standard Time.

 Lerissa Burns – Write industry analysis introduction, industry rivalry section, and threat of
substitute products section. Write a 100-word minimum APA formatted overview. Split work
with Stacey Hopkins. Due by May 29, 2022 5PM Pacific Standard Time.
 Tiffany Luman - Find 2 competitive advantage strategies to maintain target market. Write 100-
word Minimum APA formatted sections of the strategies. Due by May 29, 2022 5PM Pacific
Standard Time
Module 3 Team Project Deliverable -SWOT Analysis

Due June 5, 2022 11:59PM Arizona Standard Time
Team Lead: Lyneigh Palacios

Zoom meeting Friday, June 3, 2022 at 7 PM Pacific Standard Time
Create a SWOT Analysis of the assigned organization by looking at the internal and external Strengths,
Weaknesses, Opportunities, and Threats within the organization. Paper must be a minimum of 500
words in APA formatting, not including SWOT chart
 Lyneigh Palacios – Find three Strengths, Weaknesses, Opportunities, and Threats for the
organization. Write one concise bullet for each Strength, Weakness, Opportunity, and Threat.
Write an introduction, edit submissions from the team, and write the conclusion. Due by June 4,
2022 3PM Pacific Standard Time.
 Rachael Stiver - Find three to four Strengths to the organization. Write one concise bullet for
each Strength. Write one paragraph detailing bulleted strengths. Due by June 4, 2022 8PM
Pacific Standard Time.
 Stacey Hopkins - Find three to four threats to the Weaknesses to the organization. Write one
concise bullet for each Weakness. Write one paragraph detailing bulleted strengths. Due by
June 4, 2022 8PM Pacific Standard Time.

 Meghan Radcliffe - Find three to four Opportunities to the organization. Write one concise
bullet for each Opportunity. Write one paragraph detailing bulleted opportunities. Due by June
4, 2022 8PM Pacific Standard Time.
 Lerissa Burns -Find three to four Opportunities to the organization. Write one concise bullet for
each Opportunity. Write one paragraph detailing bulleted opportunities. Due by June 4, 2022
8PM Pacific Standard Time.
 Tiffany Luman - Find three to four threats to the organization. Write one concise bullet for each
threat. Write one paragraph detailing bulleted threats. Due by June 4, 2022 8PM Pacific
Standard Time.
 All – Complete individual Evaluation Form for Module 03. Due June 05, 2022 11:59:00PM
Mountain Standard Time.
Module 4 Team Project Deliverable -Competitive Advantage

Due June 12, 2022 11:59PM Mountain Standard Time
Team Lead: Stacey Hopkins

Plan Zoom meeting before June 10, 2022, tentatively scheduled for June 10, 2022, 7PM Central
Standard Time
This section will be dedicated to defining what Competitive Advantages are, the various Points of View
that can be implemented, and the rationale for Competitive Advantage and the point of view that will be
best serve the organization.
 Lyneigh Palacios – In 2 paragraphs, define what is a Competitive Advantage. Due by June 11,
2022 3PM Pacific Standard Time
 Rachael Stiver – Clarify the “Resource Based View” (RBV) point of view relating to Competitive
Advantage. Due by June 11, 2022 3PM Pacific Standard Time

 Stacey Hopkins – Develop the rationale for the ideal point of view that should be utilized for the
selected organization (should be 3-4 paragraphs total). This will be co-written with Tiffany
Luman
Additionally, will be responsible for final formatting and conclusion Due by June 11, 2022 3PM
Pacific Standard Time
 Meghan Radcliffe – Clarify the “Guerilla” point of view relating to Competitive Advantage. Due
by June 11, 2022 3PM Pacific Standard Time
 Lerissa Burns – Clarify the “Industry Organization” (I/O) point of view relating to Competitive
Advantage. Due by June 11, 2022 3PM Pacific Standard Time
 Tiffany Luman – Develop the rationale for the ideal point of view that should be utilized for the
selected organization (should be 3-4 paragraphs total). This will be co-written with Stacey
Hopkins. Due by June 11, 2022 3PM Pacific Standard Time
Module 5 Team Project Deliverable -Going Global

Team Lead: Tiffany Luman

Plan Zoom meeting before June 17, 2022, tentatively scheduled for June 17, 2022,
Define issues of expanding a commercial organization into a new country. Identify growing industry`s
problems. Determine the best inclusion practices
 Lyneigh Palacios – Identify modes of entry. Due by June 18, 2022 11:59PM Pacific Standard
Time
 Rachael Stiver – Identify political issues and barriers of development within a new country. Due
by June 18, 2022 11:59PM Pacific Standard Time

 Stacey Hopkins – Identify cultural differences between U.S. and other countries. Due by June
18, 2022 11:59PM Pacific Standard Time
 Meghan Radcliffe – Identify economic issues associated with development in a new country.
Due by June 18, 2022 11:59PM Pacific Standard Time
 Lerissa Burns – Identify strategies for inclusion in a new country, as discussed in our
expectations (to be completed with Tiffany). Due by June 18, 2022 11:59PM Pacific Standard
Time
 Tiffany Luman – Identify strategies for inclusion in a new country, as discussed in our
expectations (to be completed with Lerissa). Due by June 19, 2022 11:59PM Pacific Standard
Time
Module 6 Team Project Deliverable -Executive Presentation

Team Lead: Meghan Radcliffe

Plan Zoom meeting before June 24, 2022, tentatively scheduled for June 24, 2022, (Time TBD).
Our team will be remitting a completed executive presentation, including information that has been
gathered throughout the course
 Lyneigh Palacios – Complete slide for SWOT analysis for chosen organization and include
necessary notes. Due by June 17, 2022 11:59PM Pacific Standard Time
 Rachael Stiver – Complete slide on environmental analysis for chosen organization. Please
include necessary notes. Due by June 17, 2022 11:59PM Pacific Standard Time
 Stacey Hopkins – complete slide for competitive advantage for chosen organization with notes.
Due by June 17, 2022 11:59PM Pacific Standard Time

 Meghan Radcliffe – Complete slides on leadership for chosen organization with necessary notes.
Submit Executive Presentation. Due by June 18, 2022 6PM Pacific Standard Time
 Lerissa Burns – Complete slides on organization structure and necessary notes. Due by June 17,
2022 11:59PM Pacific Standard Time
 Tiffany Luman – Complete agenda and introduction (organization, mission and vision) slides.
Add any necessary notes if any. Due by June 17, 2022 11:59PM Pacific Standard Time
Module 6 Team Project Deliverable -Sector Env Analysis Comparison

Team Lead: Lerissa Burns

Plan Zoom meeting before June 24, 2022, tentatively scheduled for June 24, 2022,
Choose one presentation from each sector and make a comparative environmental analysis on each
sector using the worksheet. Be sure to identify and make connections from the presentations, to what
Row 1 says are unique to each sector's environment.
 Lyneigh Palacios – Answer q.2,3,5 (Business/For profit sector only), cited. Due by June 21, 2022
11:59PM Pacific Standard Time
 Rachael Stiver – Answer q.2,3,5 (Non profit sector only), cited. Due by June 21, 2022 11:59PM
 Stacey Hopkins – Complete q2,3,5 (Public/GOV sector only). Due by June 21, 2022 11:59PM
 Meghan Radcliffe – Complete q4 for each sector. Due by June 21, 2022 6PM Pacific Standard
Time
 Lerissa Burns – Complete q7+8 for each sector. Due by June 21, 2022 11:59PM Pacific Standard
Time
 Tiffany Luman – Complete q6 each sector. Due by June 21, 2022 11:59PM Pacific Standard Time
Organization Selection Conclusion

The Sun Devil Strategic Managers have selected Target, Alaska Airlines, or GEICO to perform an in-depth
strategic case study on. Each of these commercial organizations have been selected for a variety of
reasons that interest each of the members of the team.
After conducting initial conversations via text, it was decided that we would utilize text messaging for
the majority of communique, with ASU email and Canvas as alternatives. Additionally, we will employ
weekly Zoom video chatting to discuss the upcoming milestone and each member’s individual
responsibilities. Lastly, to ensure real-time access to the bodies of work, Google Docs has been affirmed
as the preferred system.
As with any project, conflict amongst team members can arise and therefore techniques have been
discussed to safeguard the project from the negative impacts that they can cause. With the allotment of
a “cooling off period,” tempers can be abated and allow brainstorming and the offering of solutions, of
which ALL will be considered. Once all suggestions have been made, a solution will be selected by the
majority of members and will become final.
Each deliverable was assigned to a team member on a weekly basis, thus allowing for each member to
become Team Leader. Their responsibilities will include the coordination of the Zoom Video Chat
meeting, assignment of tasks to each member of the team, and the official communique for the
individual contributions and ultimate submission of the final work. In conclusion, non-participation of
individuals is always a real possibility. Therefore, should the assigned work not be completed, recourse
has been established and agreed upon by all members; including consequences and arbitration, should
it be necessary.
Environmental Analysis
The Target Corporation has successfully navigated the big-box retailer sector of business for many years
and continues to show success because of its understanding of the surrounding environment. Utilizing
Porter’s Five Forces and looking at each section to see the threat of new entrants, bargaining power of
buyers, bargaining power of suppliers, threat of substitute products, and industry rivalry paints a
detailed picture of Target's environment. Target strategically markets toward its critical demographic of
shoppers and constantly works to introduce new and innovative competitive strategies to marketing.
The target market of any organization is essential. In a competitive field of business, organizations tend
to keep their demographics secret, so other companies do not change marketing strategies to poach
markets.
Industry Analysis
Looking forward to how an industry or company may be affected by changes in their environment or
their competition is important to planning and adapting as successfully as possible. Strategic managers
can use tools such as Porter’s forces of competition to adapt to predictable and unpredictable
situations. Some of these changes in the environment might include but are not limited to: an increase
or decrease in interest rates, inflation, labor, new threats in the industry, material surplus or constraints,
natural disasters, or even a global pandemic. We will look at how Target has been met with some of
these environmental factors and what they have done to adapt to each situation according to Porter’s
five forces of competition.
Threat of New Entrants

Based on Porter’s Five Forces of competition, the threat of new entrants into the world of Target is fairly
low. Porter identifies seven different barriers to entry for new competition. These seven barriers to
entry include economies of sale, cost disadvantages, product differentiation, capital requirements,
switching costs, access to distribution channels, and government policy. Target has made and built a
brand for itself with its “Expect more. Pay Less” slogan. Target also remains competitive with its brand
name partnerships such as Starbucks, Levi Strauss & Co., Apple, Disney, and Ulta Beauty. Not only has
Target made itself more competitive with these partnerships, but they have also created more than 45
of its own brands (Target, 2021). The internet is full of funny videos that often depict a person coming
back home from Target with more than they intended to buy, such as walking in to buy a toothbrush
and walking out spending $100. Other videos depict a wife crying because her husband went to Target
without her. These videos, while funny and meant for entertainment purposes are popular because they
ring true with others and show the allure and brand loyalty that Target has.
Aside from the brand loyalty that Target has, it would take immense capital to compete with Target.
Targets and their business strategies earned them a whopping $106 billion in revenue in 2021 as a
whole, with their own brands bringing in almost $30 billion of that. All of this being said, Target may
have a competitive edge over new entrants but is facing some competition from current competitors
such as Wal-Mart and Costco Wholesale, to name a few.
Bargaining Power of Buyers

Porter suggests that buyers can affect a company's profitability in a number of ways, including how
much of a product the customer is willing to buy, how much they are willing to pay for it if they have
other options, and what tradeoffs, if any, do those other options have. Target and its competitors, Wal-
Mart and Costco, can all boast a one-stop shop for clothes, food, decor, and more. The competitive
advantage that Target has over Walmart with its buyers lies in its in-store experience with Target’s
“wider aisles, less crowded shelves, and trendy design touches” (Gruber, B., 2021).
When looking at the power of buyers and the competition between Costco, Walmart, and Target, buyers
have several choices to choose from for everyday products. Target and Walmart both offer similar
benefits such as price matching, their own labels, similar categories, and same-day pick-up, the decision
between the two may come down to personal preference. In 2021 the American Customer Satisfaction
Index randomly surveyed 36,517 customers; target scored a 77, Walmart a 70, and Costco an 81. Even
though Costco has fewer locations in the U.S. and requires a membership fee, it is quite the competition.
With inflation continuing to increase, customers seem to be loving the wholesaler and have an
astounding 90% retention rate of their members (Stein, S., 2022). While customer satisfaction numbers
are important, profits are still in favor of Walmart overall, with sales for 2021 at over $570 billion. For
2021, Costco came in over $200 billion and Target at $106 billion (Murphy, A. & Contreras, I., 2022).
Bargaining Power of Suppliers

The power of suppliers refers to the concentration of suppliers, sales percentage, substitutions,
materials scarcity, switching costs, and forward integration (Coulter, M., 2013). Due to the large size and
the good reputation that Target has created for itself in recent years, its suppliers have lower bargaining
power in terms of prices. However, due to the large sizes of Walmart and Costco, Target also has to
compete with these two rival stores when it comes to suppliers. Walmart has a competitive advantage
when pricing its goods due to its nearly 4,800 locations in the United States compared to Target’s almost
1,900 locations and Costco with 574 stores.
Threat of Substitute Products

The threat of substitute products has been more serious than usual in the past couple of years due to
the pandemic. During the beginning of the pandemic, brand loyalty went out the window as the lack of
products had customers purchasing goods from wherever they could source them. This period does not
represent the typical threats of substitute products because of the extenuating circumstances. Target
focuses on maintaining low costs in a bargain market to avoid the threat of companies having lower
product prices. Target has built up brand loyalty and used rewards programs and Target brand credit
and debit cards to prevent consumers from leaving. By tying customers to the Target brand, the
company strengthens loyalty and heightens the switching costs if customers choose to shop elsewhere.
The threat of substitute products for the Target corporation is always high because rival companies like
Walmart and Amazon want to stay competitive.

Industry Rivalry
When you consider the scope of an organization's external environment (Coulter, 2013, p. 61), and how
strategically well-positioned you have to be to compete in the current climate, the Porter’s 5 was the
best mode of assessment for Target had maintained the top 3 in industry revenue. One of their only real
competitors is Walmart. (Reuter, 2022, para. 5). In terms of addressing industry rivalry with Target,
Porter’s 5 Force Model is specifically identified as a competitive strategy. Porter, M. (2006, January). The
criteria embody comparable forces used in identifying strategic groups(Coulter, 2013, p. 129), one of
which would be competition in the industry. That would be anyone that falls below Target in the top
revenue by industry but turns to rivalry when the organization is above in revenue each year, such as
Costco or Walmart. If at any point Walmart was using Porter’s 5 and identified their competitive
advantage of integrated low cost, it means that they will remain Target’s best competitor for as long as
they continue to exploit their resources and capabilities. (Coulter, 2013, p. 129). That is exactly one of
Porter’s competitive strategies. Walmart’s bottom line is bargains and perks, while Target is focused on
upgrading the consumer experience. (Gruber, B., 2021).
Target Market
The Target corporation's target market is vast, and 75% of people in North America live within 10 miles
of a Target location. Target works to provide something for everyone by selling clothes, food, pet
supplies, beauty products, gifts, home decor, and more. With over 1,9000 locations, Target reaches a
majority of the population and continues to expand to more areas. According to Business Insider, the
average age of a Target shopper is 39 years old (Reuter, 2022). The average shoppers are white females
around the age of 39 who are married with an average income of $80,000 US dollars per year (Reuter,
2022). Target’s market is quite large, as eight out of ten shoppers shop at Target each year.
The largest demographic that shops at Target are made up of white women with children who are
between 35 and 44 years old that have either a 4-year degree or some college (Reuter, 2022). The
largest portion of Target's sales comes from the beauty products that are marketed toward women. The
average Target shopper spends about $49 per transaction and visits a location around 21 times per year.
Targeting the market towards children's brands is also a major sector for the Target corporation as the
largest demographic of customers have children.
Competitive Advantage Strategies to Maintain Target Market

When analyzing Porter’s Five Forces Model of Competition, the most prevalent example that Target is
employing is that of focus on the Consumer. Porter asserts that consumers “have the power to drive
prices down, bargain for higher quality or more services, or play one competitor against another to get
the best deal” (Lusthaus, 2002). To further expound upon this area, we will concentrate on several
areas, in particular, where Target has spent a great deal of focus on promoting its competitive
advantages.
Corporate Focus on Employees and Customer Satisfaction

Of the many competitive advantage strategies employed by Target, treating their employees well
translates into huge successes by the organization. According to a Snap Surveys report, “Satisfied
employees are likely to assist customers with a more pleasant demeanor and a higher level of customer
service. This creates a more satisfying customer experience, increases customer loyalty, and ultimately
drives increased profitability” (DeFranzo, n.d.).
By raising their minimum pay to $15/hour compared to Walmart’s $12/hour (Torchinsky, 2022) and
through their perks programs, Target has managed to maintain an astounding 70% approval rating from
its employees, compared to 57% of employees at a typical U.S.-based company (Great Place to Work®,
2021).
Smaller Stores, Busier Locations

As customers continue to evolve, retailers must follow suit or risk going the route of K-Mart or Circuit
City. In fact, Target has spent over $4 Billion in developing the next trend, smaller stores in busier
locations, and it has been paying off in terms of customer satisfaction and pedestrian traffic. These
smaller stores are “designed to appeal to students and people living in densely populated urban centers,
like Manhattan” (Peterson, 2022). Additionally, “As far as the small stores are concerned, Target said
they are far less formulaic than the large boxes it operates across the country, noting that each is unique
and tailored to meet the hyper-local needs of a particular neighborhood or demographic.” (PYMNTS,
2021).
Curbside Pickup
Target has utilized competitive advantage strategies since first founded in 1962. Target originally had
the direction of offering high-quality, affordable, discount retail products. “Target will also add more
space and pickup areas to help speed the process for its growing number of online orders.” (Peterson,
2022) With the development of technology, the competition has changed. The market has shifted, and
digital/online ordering has become more prevalent in 2022. Target must stay relevant in the online
market. Your organization must beat the competition in addressing the needs of your shared target
audience better than your competition does By expanding space at retail locations for the changes in
today`s market. Developing strategies to make online shopping even more convenient than it already is.
Focusing on the consumer, Target is developing the space to allow for easily accessible online order
pickup. In return, it will increase customer satisfaction and experience. Resulting in returning loyal
customers, increasing revenue, and market relevance.
Focus on Millennial Shoppers and Name Brands

Another competitive advantage strategy used by Target is to concentrate on its growth strategy to
retain and capture the business of millennium shoppers: ages 26-41. Even though Target’s biggest
competitors are Walmart and Amazon, Walmart’s typical shopper is slightly older, ages 55 to 64, while
the typical Amazon shopper is “split across two age brackets: 35 to 44 and 55 to 64” (Reuter, 2022, para.
5). With Target and Amazon both trying to attract the same customer base, Target has a slight
advantage by using brick-and-mortar stores to offer an in-person experience and, most recently,
partnering with multiple name brands millennials are likely to purchase.

Over the past few years, Target has created mini-shops in their stores with brands like Starbucks, Disney,
Ulta Beauty, Magnolia, and Levi Strauss & Co. (Kline, 2022, para. 5). While many millennials enjoy the
easy process of online shopping, some millennials want an in-person shopping experience. According to
PowerReviews (2022), “Millennials do 60% of their shopping online… while the remaining 40% shop in a
physical store” (Smith, para. 13). Target’s strategic decision to create mini shops with leading national
brands provides millennial customers the engaging shopping experience they want by allowing them to
enjoy a cup of Starbucks coffee and browse products in the store. The company’s growth strategy to
target millennial customers is supported in the Target Corporation’s recent investor report, which
outlined the company’s strategy to “differentiate from our competition with our owned brands and a
curated assortment of leading national brands” (Target, 2022, “Strategy” part 1).
Staying on Trend, Offering Sustainable Options

In 2021, Target launched, Introducing: Target Forward “Our vision is to co-create an equitable and
regenerative future together with our guests, partners and communities.” (Peterson, 2022) Target is
focused on a positive impact on customers and the surrounding communities and environments.
Reducing their imprint to address climate change, reducing emissions, cleaning out of natural resources,
and reducing waste. Target has aimed to reduce emissions and will contribute no more than 1.5 degrees
warming. Developed a plan of purchasing electricity from renewable sources up to 100% by 2030.
Design principles can be seen in two of our Target-owned brands, Universal Thread and Everspring.
Universal Thread, certain styles are made with recycled cotton, and a number of jeans feature polyester
pocket linings derived from recycled plastic bottles. Target's new essentials brand Everspring: Down-To-
Earth Solutions That Are Up to Earth's Standards. Target's new household essentials-owned brand is
designed with sustainability in mind. They are eco-friendly since everything is recyclable or 100%
biodegradable. All of their cleaning products, hand soaps, paper products, laundry detergents, and more
are affordably priced. Keeping up with market trends of using sustainable products, going green, and the
battle against climate change. Appealing to a broader market while still keeping products affordable has
benefited the organization.
Target’s Loyalty Program – Target Circle

Target Circle was created as a free loyalty program to reward customers for shopping at Target. This
loyalty incentive program was created by the Target Corporation as a competitive advantage strategy to
“concentrate on its primary line of business” by rewarding repeat customers with incentives to shop at
Target (Coulter, 2013, p. 161). Under the terms and conditions outlined by the Target Corporation
(2022), Target Circle members can earn 1% back on qualified purchases that will be rewarded in Target
Circle Earnings to be used towards future purchases and allow members to earn voting power to help
the Target Corporation decide which nonprofit organization to support through their Community Giving
Program (“Target Services/Programs”, para. 1-6). In addition to earning rewards and voting power for
the Community Giving Program, Target Circle members have access to exclusive offers and deals and
even a special Birthday Reward.
According to Retail Dive (2020), over 80 million Target customers enrolled in the Target Circle loyalty
program when it was launched in 2019 (Unglesbee, para. 1). The Target Corporation’s decision to
launch their successful Target Circle membership is a prime example of Porter’s Five Forces that focus
on “the power of buyers” (Porter, 2006, p. 83). To keep customers loyal, launching the Target Circle
loyalty program was a smart strategic decision to retain and grow Target’s customer base.
Environmental Analysis Conclusion

The Target Corporation has maintained its position as a popular big-box discount retailer because of its
competitive spirit and marketing approaches. Utilizing Porter’s Five Forces and looking at each section to
see the threat of new entrants, bargaining power of buyers, bargaining power of suppliers, threat of
substitute products, and industry rivalry paints a detailed picture of Target's environment. Target
understands its external threats and can build a marketing plan that appeals to its target market while
avoiding potential threats of competition or supplier issues. The focus on the Consumer is a major
driving force for the Target Corporation. That is seen in the loyalty and rewards programs, the addition
of curbside pickup, partnering with name brands, and maintaining affordable and trendy products. The
care for the consumer creates a symbiotic relationship between customers and the company and helps
to keep Target successful. In a world with so many choices and companies like Amazon taking over sales,
the Target Corporation continues to prove successful by living out its mission “Expect more. Pay Less”.
SWOT Analysis Introduction

The Target Corporation was incorporated in 1902, in Minnesota. Even though the Target Corporation
has changed the company’s name many times over the last 120 years, the Target Corporation that
consumers know and love today was officially founded in 1962 (Target Corporation, n.d., “History
Timeline”). For the last 40-years, the Target Corporation has been operating as a big-box retailer selling
general merchandise in stores throughout all 50 U.S. states and through their online digital channels. As
a publicly traded company that employs over 400,000 plus team members and is the seventh largest
retailer in the world, the Target organization has been able to capture the admiration and respect of its
investors, team members, and customers for decades (Debter, 2022, “Chart”). In this SWOT analysis, we
will discover the details of why the Target Corporation has been able to stay relevant for decades while
continuing to have a competitive advantage over its competitors as a retail favorite with its loyal
customers.
SWOT Analysis
A SWOT Analysis is an assessment method used to conduct an environmental scan of an organization by
analyzing the strengths, weaknesses, opportunities, and threats (SWOT) of an organization. In this
SWOT analysis, we will analyze the internal strengths and weaknesses used to create competitive
growth strategies by evaluating the tangible and intangible resources and core capabilities currently
identified within the Target Corporation. We will also evaluate the company’s external opportunities
and threats by examining the external environmental changes currently facing the retail industry as a
whole and the corporation directly.
Strengths Weaknesses
● Positive financial position ● Low profit margins

● Positive customer shopping ● Lack of focus on E-Commerce
experience ● Lack of amenities
● Target Circle Loyalty Program ● International presence
● The amount of locations. ● Perception of higher prices
● Brand recognition. ● Lack of product diversity
● Employee benefits. ·
Opportunities Threats
● Increase market presence ● Rising costs

● Increase sustainability ● Uncertain times
● Improve digital interfaces (website ● Increased competition
& app) ● Technology risks/data breaches.
● Improve diversity, equity and
inclusion
● Expand private label brands
● Increase number of locations
Strengths
Finding the strengths within an organization are important working holistically. Strengths and
weaknesses are often seen as hand in hand but focusing on just strengths shows a company what they
have done well and teaches them what they need to do to stay strong. “Strengths are resources the
organization possesses and capabilities it has developed, both of which can be exploited and developed
into a sustainable competitive advantage” (Coulter, 2013). To have a competitive advantage is a strength
in itself and Target has managed to have many different strengths throughout its time as a company. We
have identified Target’s strongest strengths which are people, property, and profits.
Positive Financial Position

The Target Corporation has many strengths which is why it has remained so successful over the years.
Target strives to create a positive and inviting environment for its customers to help create brand loyalty
and encourage repeat business. The implementation of the Target circle loyalty program and the Target
debit and credit red cards have also been influential features in helping to achieve a positive financial
position. “Years of investment in our team and business have driven our sales beyond $100 billion and
positioned Target to meet the needs of our guests no matter how they choose to shop” (Target, 2022).
To help boost sales Target has implemented new and innovative ways to shop with online ordering,
store pick-up, in-store shopping, and delivery services.
Brand Recognition and Location

With plans to introduce 30 more stores in 2022 (Target, 2022), Target will continue on its growth
trajectory by improving accessibility and increasing its customer base. As they add new locations in both
foreign and familiar places, the company raises its brand recognition as more and more people become
familiar with the red bullseye logo. “The stores will range in footprint, from mid-size locations in dense
suburban areas to small-format stores in city centers like Charleston, SC, and New York’s Times Square”
(Target, 2022). The adoption of storefronts to more locations is a strength as they are creating a new
and better level of accessibility for customers and employees alike.
Employee Benefits
The Target Corporation has many strengths when serving and catering to loyal customers, but the
corporation also treats its employees (team members) well, too. Right now, the retail industry is
struggling to capture new employees and fill positions, which lends to the reason why Target has
recognized they need to invest in their current employees and attract new ones. A recent polling survey
conducted by Gallup found that “employees want increase pay, better work-life balance and wellbeing,
job stability and job security, that the organization is diverse and inclusive to all types of people, and the
ability to do what they do best” (Wigert, 2022, para 1-22).

Target plans to make a $300 million investment in their employees. While the company is introducing
many enhancements to its benefits program, there are a few things that are “positioning Target as a
benefits leader in the retail industry” (Zboraj, 2022, “Title”). Some of the benefits setting Target apart
from other retailers include increasing starting “hourly” wages to “$15 to $24, access to better health
benefits, a debt-free college program, access to more stable schedules, and making Thanksgiving Day
store closings permanent” ( Zboraj, 2022, para.9). By investing in its employees, Target can build on
their core capabilities as a strength for the company but also provide employees’ the benefits they really
want.
Weaknesses
Weaknesses, in relation to organizations, are internal competency struggles that can, potentially, be
converted into opportunities for internal growth thereby becoming an asset in relation to their
competition. In reference to Target, numerous weaknesses have been identified, including low
international presence, perception of higher pricing, and lack of product line diversity. However,
emphasis will be on three primary weaknesses pinpointed as the most detrimental to the organization;
each of which will be examined in greater detail.
Low Profit Margins

According to The Grocery Store Guy.com, “Conventional grocery stores have a profit margin of about
2.2%, making them one of the least profitable industries in the US” (Campbell, 2021). Fortunately, mass
merchandisers like Target have more than just grocery items in their stores that lend themselves to
increased profits. Through their clothing and furniture offerings to their private line of goods, Target
was able to realize a net profit margin of 6.55% for 2021. Effectively, this denotes that the organization
is very susceptible to external costs and how beholden they are to their vendors and logistics expenses.
Lack of Focus on E-Commerce

Target arrived late to the E-commerce sector, which has translated into missed opportunities and loyalty
shifts amongst their customer base. Target’s primary competitor, Walmart, launched their e-commerce
site in 2000; 10 full years before Target entered this area. Despite investing vast amounts of resources
over the past several years, in 2021 Walmart realized 617.2 million monthly visitors, compared to
Target’s 282.5 million visitors (Nguyen, 2021). The industry is based on high-presence, high volume, and
economies of scale; therefore, this presents a clear disadvantage over the competition.
Lack of Amenities
Shoppers have been enjoying the one-stop shopping experience for decades and this has generated the
need for and implementation of a greater number of amenities at supermarkets and mass
merchandisers. From fast food establishments to drive-thru pharmacies, to fueling centers, people are
seeking convenience in every aspect of their consumer lives. Regardless of this continuing trend, Target
has neglected this niche and is translating into lower numbers of visitors and annual sales.
Opportunities
Opportunities are external changes used by an organization to create a competitive advantage and
improve its performance. An organization must always know what potential or pending internal and
external actions are likely to positively or negatively influence them, thus strategically planning how to
address them (Lusthaus et al., 2002, pg. 46). Strategic planning must mitigate negative influences and
take advantage of opportunities. Opportunities can be augmented by forming new alliances and
partnerships, and by forging new ways of thinking about generating resources (Lusthaus et al., 2002, pg.
46). In our analysis, we found that Target has been successful at capitalizing on opportunities in many
ways, such as their sustainability efforts with “Target Forward”, improving their diversity, equity, and
inclusions program, by expanding their private “owned” brand, and developing its aggressive strategy
for consumer accessibility with over 47 new brick & mortar locations opening, some well over 100k sq ft
(Target, 2022).
Increased Market Presence

Target has huge plans to expand its market presence. On March 1, 2022, the Target Corporation
“announced its plan to invest up to $5 billion to continue scaling its operations in 2022” (para.1).
Target’s business strategy to expand its market presence will allow the company to build 30 new stores
and remodel 200 existing stores, while also improving same-day fulfillment services by continuing to
invest in digital experiences that will drive growth for the retail giant (Target Corporation, 2022, para. 1,
3 & 8). Target is taking the opportunity to build on their core capabilities for projected long-term
growth for the corporation.
Increase Sustainability
With the ongoing issue of climate change and limited resources many companies, including Target, have
taken notice and are taking action towards more sustainable choices. To help protect the planet and the
success of its company, Target is working with its communities and partners to be “Target Forward”.
Through Target Forward, the company is working towards more sustainable choices such as 100%
renewable energy sources by 2030, the use of sustainably sourced, 100% recycled or regenerative
materials in their private labels by 2030, and net zero emissions by 2040 (Target, n.d). While these
efforts are great, there is still more that they could be doing.
An opportunity for improvement with the Target Forward program would be more transparency in the
progress the corporation is making towards its sustainability goals. One of Target’s competitors, Costco,
is also working on tackling environmental and social issues, and has its goals and progress available to
view on its website (Costco Wholesale, 2022). Other companies like Patagonia, an outdoor clothing and
gear company, are taking their commitment to the environment a step further. Patagonia fixes its
customers Patagonia apparel for life, offers credit for used Patagonia apparel, sells its own used apparel
as well as new merchandise, and is calculating an environmental profit and loss for each of its products.
These environmental profit and loss metrics show the carbon, water and waste impact of each item.
With these metrics, Patagonia is able to identify opportunities within its supply chain and products, and
stop selling items that do not meet its standards (Patagonia, n.d). While Patagonia is not a company that
sells items as diverse as Target, the company is taking more actions to lessen its impact on the
environment. As Target continues to develop its sustainability strategy, it should utilize opportunities to
implement sustainable strategies used by other companies to protect the planet.
Improve Diversity, Equity, and Inclusion

Companies today are taking more ownership of the impact they have on their communities and their
employees. A recognizable organization like Target can help create change in the lives of its employees,
the communities it serves, and help to influence change in other organizations. Target’s current strategy
on diversity, equity and inclusion (DE&I) is to focus on creating an inclusive environment for its
customers and employees, to ensure a diverse workforce and be a positive influence on society (Target,
n.d). Target has made huge strides in the DE&I area in the past several years. They have increased their
promotion of women into senior leadership roles by 16%, the promotions of people of color has risen by
62% and half of their leadership team is made up of women and 24% of people of color (Target, n.d).
While these accomplishments are great, there is still work to be done. Target can work to improve their
DE&I through its brands and its suppliers. They can work to support and carry products whose
ownership is indicative of DE&I. Target can do more to help create change that will positively affect
diversity, inclusion and equity within its workforce, stores, communities, society and other companies.
Expand Private Labels

Target currently has 45 private labels that range in categories from grocery to home decor to apparel.
The advantage of these owned brands for the company is that they are cheaper than third party
products. Target’s private labels make up about a third of its sales with four of its brands surpassing $4
billion in sales (Cat & Jack, Up & Up, Threshold and Good & Gather) (Ochwat, D., 2021). Target has had
much success with its private labels and should continue to capitalize on them.
One area in particular that Target can focus on expanding is its grocery category. In 2019, Target’s food
and beverage category made up about 20% of its sales, but only commanded about 3% market share.
However, Target's competitors, Walmart and Kroger, have claimed 21% and 10% of the market share.
According to Target’s own president of food and beverage, Stephanie Lundquist, when customers shop
in Target’s food and beverage areas, they on average end up spending twice as much (Repko, M., 2020).
With the food and beverage market being difficult to compete in, due to low profit margins, it makes
sense for Target to focus on how they can expand their private label Good & Gather and attempt to
eliminate third party brands where they can. In order for Target to remain a strong competitor, and be a
one stop shop, expanding its owned private brands will be one of the ways to help Target use these
products as an opportunity for growth.
Threats
Threats are capable of acting against an asset in a manner that can result in harm. Threats, in relation to
organizations, refers to factors that have the potential to cause harm to an organization's success.
Identified below are the major threats that Target currently faces.
Increased Competition
Based on Porter’s Five Forces of competition, the threat of new entrants, the likelihood that another
company is going to enter your industry. Even though “Target is the seventh-largest retailer in the
world” and has a higher-than-average customer loyalty when compared with its competitors, Target
must consistently be vigilant to offset the threats from its competitors and the entire retail industry
( Reuter, 2022). Consumers are patronizing Target’s competitors, like Walmart and Amazon, with great
frequency due to more advanced and user-friendly ecommerce platforms. Additionally, its primary
competitor, Wal-Mart, owns its entire logistics system allowing it to ship products “from warehouse to
store in less than 48 hours. This allows Wal-Mart to replenish the shelves four times faster than its
competition” (MBA Knowledge Base, 2021).
To address the threats of its competitors, Target also remained competitive with its brand name
partnerships such as Starbucks, Levi Strauss & Co., Apple, Disney, and Ulta Beauty. Not only has Target
made itself more competitive with these partnerships, but they have also created more than 45 of its
owned private brands (Target, 2021). In addition, Target is redesigning its stores to appeal to a broader,
younger, market while continuing to offer affordable pricing on merchandise. Target understands the
changing needs of its customers, by appealing to convenience and price and the development of new
smaller stores which “are designed to appeal to students and people living in densely populated urban
centers, like Manhattan” (Peterson, 2022) . To strategically offset threats, Target strategically markets
toward its critical demographic of shoppers and constantly works to introduce new and innovative
competitive strategies to marketing.
Rising Costs and Uncertain Times

With inflation at a 40-year high and worldwide concerns over the long-term effects of the war between
Russia and Ukraine, consumers are starting to feel the effects in every part of their lives. Rising prices
and delays in the supply chain are still big concerns for Target as “a large portion of our merchandise is
sourced, directly or indirectly, from outside of the U.S., with China as our single largest source” (Target
Corporation, 2022, “Item 1A Risk Factors”). The Target Corporation is paying close attention to the
trending market to ensure they identify threats to the U.S. economy and the global economy and adjust
to avoid the effects of a declining market. In the recently published Target Corporation Annual Report
(January 30, 2022), the company stated it is “highly dependent on the U.S. economy and U.S. consumer
confidence, which can be affected by a variety of factors, including housing prices, unemployment rates,
and inflation” (“Item 1A Risk Factors”).
On the bright side, Reuter.com (March 1, 2022), interviewed Brian Cornell, CEO of Target, and he
indicated that the “supply chain constraints are steadily working themselves out but will likely take more
time…made more uncertain by the crisis in Ukraine” (Kumar & Venugopal, 2022, para. 3). In its annual
report, Target has identified the risks currently affecting the company due to uncertain times and is
developing strategies to address them. While the threats of rising costs and the uncertainty of ongoing
global crises loom for all companies in the retail industry, Target must consistently scan its external
environment to protect its resources.

SWOT Conclusion
By conducting this SWOT analysis, we discovered the reasons why the Target Corporation has been able
to maintain a sustainable competitive advantage over its competitors as a retail favorite while also
confirming the corporation’s decisions to create competitive growth strategies by using its strengths to
pursue and build opportunities for continued growth. Through our analysis, we identified the
weaknesses in the organization and confirmed the threats currently facing the organization that could
cause potential harm to the corporation if migration strategies are not developed. As a team, we
identified and created recommendations that could be implemented or further explored, expanded, or
watched.
Good leadership is a valuable and important strength of an organization. Brian Cornell has been the CEO
of Target since 2014 and has been instrumental in navigating the successful strategic growth of the
company through the nearly 2,000 Target stores and digital channels since his appointment (Target
Corporation, n.d., para. 1 & 2). Under Brian Cornell’s leadership, Target has been able to build upon its
strengths by using its competitive advantages to strategically grow the company by investing in
infrastructure and continuing to expand their owned brands while also partnering with leading national
brands. For Target to maintain its sustainable competitive advantage, the corporation must consistently
build upon its strengths and utilize them as opportunities for growth by using the differentiation
strategy.
We identified a few weaknesses in Target and have suggestions that can help the corporation overcome
these weaknesses by turning them into opportunities. First, to advance its market share and improve its
standing versus its competitors, Target should evaluate the aforementioned weaknesses to ascertain if
any can be transitioned into competitive advantages. Second, with further research and development in
the realm of ecommerce, strategies can be deployed to starve off major competitors and regain the
loyal customers that have transitioned to other retailers like Amazon and Walmart. Lastly, through
strategic expansion of offerings at their larger marketplace, greater gains can be realized from the return
of some one-stop shoppers that visit other retailers that offer extra amenities atop the items on their
shelves. From fueling stations and drive-thru pharmacies to in-store childcare and craft bars,
competitors are breaking the mold and Target needs to conduct further analysis into consumers' desires
to direct customers back to their locations.
Target’s Competitive Advantage

Introduction
When attempting to create an organization’s Strategic Management Plan, decision makers must
evaluate their current competitive advantages and assess the impact of internal factors; external
factors; and/or flooding the industry with multiple surprise attacks that serve to keep the competitors
off guard and on the defensive.
To fully comprehend the strategy that is best suited for Target, establishing a recognized definition of
what a Competitive Advantage is, is paramount. Afterwards, the various organizational views will be
further explored and contemplated to ascertain the most ideal strategy that will allow Target to exploit
current and potential competitive advantages.
Defining Competitive Advantage

A competitive advantage is a term often used by strategic managers of an organization when developing
strategies built from the organization’s resources and capabilities. For an organization to sustain long-
term success, it needs a competitive advantage, or better yet, a sustainable competitive advantage,
based on factors that allow an organization “to produce more affordable or higher quality services or
products than its competitors” (Amadeo, 2022, para. 1). Essentially, a competitive advantage derives
from competition and illustrates the ability for an organization to “has something competitors don’t, do
something better than other competitors do, or simply does something others can’t” (Coulter, 2012, p.
29).
To develop a competitive advantage an organization must build and implement strategies that will
benefit its target market, while simultaneously determining the benefits to the organization. First, an
organization must develop a strategy based on the organization’s stated goals and vision. Second, an
organization must have a clear understanding of who its competitors are and what its competitors’
strengths and weaknesses relating to the industry. Lastly, the organization must understand the needs
of its target market and the resources the target market desires.
Under Michael Porter’s Five Forces, a competitive advantage is developed through three ways to benefit
the target market and an organization: cost leadership, differentiation, and focus strategies. A cost
leadership strategy is focused on the organization providing a “reasonable value at a lower price”
(Amadeo, 2022, para. 12). An organization that uses a differentiation strategy wants to “deliver better
benefits than anyone else '' while a focus strategy “wants to service its target market better than anyone
else '' (Amadeo, 2022, para. 13 & 14). To implement one of these strategies, an organization must
assess its resources and capabilities and determine the best approach to achieve a competitive
advantage.
Three predominant perspectives are often used by an organization to develop their overall strategy: the
industrial organization (I/O) view, the resource-based view (RBV), and guerrilla view (Coulter, 2013, p.
30). Each viewpoint presents its own unique perspectives, benefits, and challenges strategic managers
may exploit in the development of the plan that will be ultimately implemented.
Point of View
“Although the three perspectives on competitive advantage exhibit different focal points, they are not
totally contradictory. In terms of distinctive levels of analysis, they contribute to the common issues of
value creation, value preservation and value capture” (Wu, 2013).
This provides the rationalization behind the development and continued exploration of the three
theories regarding competitive advantages: the Resource-Based View, which takes more of an internal
analysis; the Industrial Organization View, focusing more on the external environment in which
companies operate; and the Guerilla View, which is, seemingly, more of a “shock-and-awe” strategy
appearing to work well only in short bursts.
Resource Based View

The resource-based view, or RBV, is essential to understanding the competitive advantages of an
organization from an internal perspective. “Resource-based theory of competitive advantage argues
that innovations achieve sustainable competitive advantage by accumulating and using resources to
serve consumer interests in ways that are hard to substitute for or imitate” (Holdford, 2018).
This approach has an internal focus to identify an organization's competitive advantage(s) and
“emphasizes exploiting organizational resources to develop and maintain competitive advantage”
(Coulter, 2013). Such resources can consist of the company’s brand, intellectual property, proprietary
software, financial resources, and human resources, to name but a few. By leveraging these inimitable
resources, core competencies can be achieved and thereby generating competitive advantages.
Through the command and utilization of competitive advantages, tactical oversight within the
marketplace can be attained.
Industrial Organization View

The Industrial Organization (I/O) approach “proposes that getting and keeping competitive advantages
means analyzing external forces and basing strategic decisions on that analysis” (Coulter, 2013, p. 30).
These external forces can be existing competitors, new entrants, customers, vendors, and even
substitute products. “Even a long-running governmental monopoly like the U.S. Postal Services faces
intense competition from technological advances such as instant messaging, e-mail, fax machines, and
overnight package delivery services” (Coulter, 2013, p. 224).
The I/O view has proven to be effective when three primary conditions have been met within an
industry; limited competition, high barriers to entry, and similar resource availability. This approach, in
relation to Competitive Advantage, insists that organizations strive to achieve a competitive advantage
in the industry; “...something that sets them apart, something unique that they offer” (Coulter, 2013, p.
29). Furthermore, the expediency in receiving data regarding the needs and wants of consumers is
paramount to its success. Companies must move quickly to adjust their product differentiation to satisfy
the changing desires of the customer base.
Guerilla View
The guerilla view on competitive advantage suggests that a company can potentially gain a temporary
advantage with a quick and dramatic surprise. It proposes that an organization’s competitive advantage
is temporary and can be gained only by peppering the competitive marketplace with rapid radical
surprises (Coulter, 2013, Ch. 4). Many companies that have used guerilla advertising in the past, have
realized major successes. In 2013, when Dove launched their “Real Beauty Sketches” in a campaign
against unrealistic beauty images their sales increased by $1.5 billion that year (PPCexpo, n.d.).
Consequently, great benefit can be achieved from this spontaneous advertising tactic, especially as
social media continues to grow and gain influence over people’s choices.
Another example for this tool, similar to this spontaneous advertising tactic, would be to employ social
media to initiate a contest to find the organization’s next Brand Ambassador amongst the general
public. In place of celebrity endorsements, participants could showcase how they use the products
and/or services that they are purchasing to their social media account and linking their posts to the
company’s own social media accounts. The winner of this campaign would become the next Brand
Ambassador. Such an approach would not only aid in increasing the brand’s awareness and sales, but
help customers see new ways to use their purchases.
Rationale for Theory Utilization
When determining if competitive advantage can be achieved, it is important to know the benefits, the
target market, and the competitors. Companies must be clear about what benefit(s) their product or
service provides, as it must offer real value and generate interest. By defining their target market, firms
need to determine who is purchasing from the company and how it can cater them. In terms of
competition, it is imperative to understand one’s competitors and their position within the industry
landscape.
Target’s competitors have already seized competitive advantages in many areas, including logistical
efficiencies, national and international presence, economies of scale, product diversity, on-site
amenities, and even e-commerce. These competencies by competitors indicate that developing a
strategy to compete in the external arena may prove to be without merit and a waste of resources.
Likewise, with short-lived gains through the employment of “gimmicks,” which is the basis of the
Guerilla theory, competitors have the resources to deploy rapid responses, thus mitigating any gains
that may have been achieved.
Having explored the I/O and Guerilla theories and determined the inefficiencies with pursuing strategies
centered within them, it is our determination that Target should concentrate on the Resource-Based
view (RBV). Our justification stems from, its successful leveraging of its internal resources, such as:
brand name, private-label brands, customer loyalty, data-mining, employee satisfaction, strategic
positioning of future and existing storefronts in heavily populated urban areas, and its partnerships. By
developing core competencies with roots in the RBV, Target can develop and implement strategies to
generate higher sales and superior margins, as compared to its market rivals.
Competitive Advantage Conclusion

Previously outlaid, are the three general theories of competitive advantage. The Industrial Organization
(I/O) theory, which focuses on the external environment; the Resource-Based View (RBV) theory,
primarily focusing on the internal environment; and then the Guerilla View theory, whereby
organizations implement a “shock and awe” style campaign that takes competitors, and consumers, by
surprise. When designing competitive advantages through an RBV lens, Target will be able to construct
core competencies that will allow it to, not only survive in their industry, but thrive within it.
Additionally with further investment into their existing internal resources, Target will be able to endure
the marketplace and preserve its motto, “Expect More. Pay Less.”
Works Cited
Alaska Airlines. (n.d.). Historical overview. Alaska Airlines. Retrieved May 24, 2022, from
https://www.alaskaair.com/content/about-us/history
Amadeo, K. (2022, January 29). Competitive advantage. The Balance. Retrieved June 8, 2022, from
https://www.thebalance.com/what-is-competitive-advantage-3-strategies-that-work-3305828
Campbell, J. (2021, September 23). What is the profit margin for grocery stores? The Grocery Store Guy.
Retrieved June 2, 2022, from https://thegrocerystoreguy.com/what-is-the-profit-margin-for-
grocery-stores/
Cornell, B. (n.d.). 2020 target annual report - financials - 10K: Target corporation. 2020 Target Annual
Report - Financials - 10K | Target Corporation. Retrieved May 24, 2022, from
https://corporate.target.com/annual-reports/2020
Costco Wholesale. (2022). Climate Action Plan. Costco. Retrieved from

https://www.costco.com/sustainability-climate-action-plan.html
Coulter, M. (2013). Strategic management in action (6th ed.). New York, NY. Pearson.
Debter, L. (2022, May 31). The world's largest retailers 2022: Pandemic helps Amazon cement its lead.
Forbes. Retrieved June 2, 2022, from
https://www.forbes.com/sites/laurendebter/2022/05/12/worlds-largest-retailers-2022-amazon-
walmart-alibaba/?sh=54a1bfd59e34
DeFranzo, W. by S. E. (n.d.). Satisfied employees leads to satisfied customers. Snap Surveys Blog.
Retrieved May 26, 2022, from https://www.snapsurveys.com/blog/satisfied-employees-leads-
satisfied-customers/
GEICO at a glance. GEICO. (n.d.). Retrieved May 24, 2022, from

https://www.geico.com/about/corporate/at-a-glance/
Great Place to Work®. (2022, March). Working at Target Corporation. Target Corporation. Retrieved May
26, 2022, from https://www.greatplacetowork.com/certified-company/1100147
Gruber, B. (2021). Target vs. Walmart: Which Is Best? Reader’s Digest. Retrieved May 28, 2022.
https://www.rd.com/article/target-vs-walmart/
Holdford D. A. (2018). Resource-Based Theory of Competitive Advantage - A Framework for Pharmacy

Practice Innovation Research. Pharmacy Practice, 16(3), 1351.
https://doi.org/10.18549/PharmPract.2018.03.1351
Kline, D. (2022, March 28). Target stock rises as the chain becomes a new take on the Mall. TheStreet.
Retrieved May 28, 2022, from https://www.thestreet.com/investing/target-ulta-levis
Kumar, U., & Venugopal, A. (2022, March 1). Target sees brighter 2022 with easing supply pressures.
Reuters. Retrieved May 31, 2022, from
https://www.reuters.com/business/retail-consumer/target-misses-holiday-sales-estimates-
warns-more-margin-pain-2022-03-01/
Lusthaus, C., Adrien, M., Anderson, G., Carden, F., & Montalvan, G. P. (Eds). (2002). Organizational
Assessment. A Framework for Improving Performance. Retrieved from: https://ebookcentral-
proquest-com.ezproxy1.lib.asu.edu/lib/asulib-ebooks/reader.action?
docID=267177&query=Organizational+assessment
%3A+A+framework+for+improving+performance
MBA Knowledge Base. (2021, June 28). Case study: Business strategy analysis of Wal-Mart. MBA
Knowledge Base. Retrieved June 5, 2022, from https://www.mbaknol.com/management-case-
studies/case-study-business-strategy-analysis-of-wal-mart/
Murphy, A. & Contreras, I. (2022). The Global 2000. Forbes. Retrieved from
https://www.forbes.com/lists/global2000/?sh=629831f75ac0
Nguyen, K. A. (2021, December 14). What are top 10 ecommerce sites in USA - updated 2022. Magenest.
Retrieved June 2, 2022, from https://magenest.com/en/top-ecommerce-sites-in-usa/
Ochwat, D. (2021). Retailer of the Year 2021: Target. Store Brands. Retrieved from
https://storebrands.com/retailer-year-2021-target
Patagonia. (n.d.) Is Each Product Worth the Environmental Cost? Retrieved from
https://www.patagonia.com/climate-goals/#asset-modal-our-metrics
Peterson, K. (2022, March 15). 5 major changes target is making in 2022. Eat This Not That. Retrieved
May 30, 2022 https://www.eatthis.com/news-target-changes-2022/
Peterson, K. (2022, March 15). 5 major changes target is making in 2022. Eat This Not That. Retrieved
May 26, 2022, from https://www.eatthis.com/news-target-changes-2022/
Porter, M. (2006, January). The Five Competitive Forces that Shape Strategy. Harvard Business Review.
HF 5001.H3
PPCexpo. (n.d.) 15 Successful Guerilla Marketing Examples. PPCexpo. Accessed on June 11, 2022.
Retrieved https://ppcexpo.com/blog/guerilla-marketing-examples
Repko, M. (2020). Target revs up its grocery game with hundreds of new products, including gourmet
pastas and coffee. CNBC. Retrieved from https://www.cnbc.com/2020/09/02/target-is-revving-
up-its-grocery-game-with-expanded-products.html
Reuter, D. (2022, February 18). Meet the typical Amazon customer, a college-educated married woman
in the southeast earning $80,000. Business Insider. Retrieved May 30, 2022, from
https://www.businessinsider.com/typical-target-shopper-demographic-white-millennial-
woman-earning-middle-income-2021-7
Smith, A. (2022, March 9). Millennial Shoppers & Reviews: A deep dive. PowerReviews. Retrieved May
28, 2022, from https://www.powerreviews.com/blog/generate-more-reviews-millennials/
Stein, S. (2022). The Costco Love Affair Continues, And It Is Making Walmart Blush. Forbes. Retrieved
from https://www.forbes.com/sites/sanfordstein/2022/05/06/the-costco-love-affair-continues-
and-it-is-making-walmart-blush/?sh=1184a4791880
Target Corporation. (n.d.). About target corporation. Target Corporate. Retrieved June 2, 2022, from
https://corporate.target.com/about
Target Corporation. (2022, May 18). A Bullseye View. behind the scenes at Target. Target Corporate.
Retrieved June 1, 2022, from https://corporate.target.com/press/releases/2022/05/Target-
Corporation-Reports-First-Quarter-Earnings
Target Corporation. (2022, May 18). A closer look at Target's Q1 2022. Target Corporate. Retrieved June
1, 2022, from https://corporate.target.com/article/2022/05/q1-2022-earnings
Target Corporation. (2022, January 29). Annual Report 2022.

https://investors.target.com/static-files/105534b6-2fe3-4ab2-840d-c0ae9ef84a91
Target Corporation. (n.d). Diversity, Equity & Inclusion. Target Corporate. Retrieved from
https://corporate.target.com/sustainability-ESG/diversity-equity-inclusion
Target Corporation. (n.d.). Our leadership ‒ Brian Cornell. Target Corporate. Retrieved June 2, 2022,
from https://corporate.target.com/about/purpose-history/leadership/Brian-Cornell
Target Corporation. (n.d). Target Forward: Our Sustainability Strategy. Target Corporate. Retrieved from
https://corporate.target.com/sustainability-ESG/strategy-target-forward
Target Corporation. (n.d). Team Members and Guests. Retrieved from

https://corporate.target.com/sustainability-ESG/diversity-equity-inclusion/team-members-
guests
Target Corporation. (n.d.). Target history timeline. Target Corporate. Retrieved June 2, 2022, from
https://corporate.target.com/about/purpose-history/History-Timeline?era=2
Target Corporation. (2022, April 8). Terms & conditions. Target. Retrieved May 29, 2022, from
https://www.target.com/c/terms-conditions/-/N-4sr7l#circle
Torchinsky, R. (2022, March 1). Target is raising its minimum wage to as much as $24 an hour. NPR.
Retrieved May 26, 2022, from https://www.npr.org/2022/03/01/1083720431/target-minimum-
wage
Unglesbee, B. (2020, November 12). Target's free loyalty program nears 80m members 1 year after
launch. Retail Dive. Retrieved May 29, 2022, from https://www.retaildive.com/news/targets-
free-loyalty-program-nears-80m-members-1-year-after-launch/588896/
Watkins, M. I. (2013, June 27). Making virtual teams work: Ten basic principles. Harvard Business
Review. Retrieved May 24, 2022, from https://hbr.org/2013/06/making-virtual-teams-work-ten
Why Small Stores are a big deal for Target. PYMNTS.com. (2021, April 7). Retrieved May 26, 2022, from
https://www.pymnts.com/news/retail/2021/why-small-stores-are-a-big-deal-for-targets-future/
Wigert, B. (2022, April 18). The top 6 things employees want in their next job. Gallup.com. Retrieved June
3, 2022, from https://www.gallup.com/workplace/389807/top-things-employees-next-job.aspx
Wu, Minyu. (2013). Towards a Stakeholder Perspective on Competitive Advantage. International Journal
of Business and Management. 8. 10.5539/ijbm.v8n4p20.
Zboraj, M. (2022, February 28). Target positions itself as benefits leader with up to $24 starting wage.
Progressive Grocer. Retrieved June 3, 2022, from https://progressivegrocer.com/target-
positions-itself-benefits-leader-24-starting-wage

Culmination Project-Group 04-Stacey Hopkins

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Culmination Project-Group 04-Stacey Hopkins

Uploaded by

Copyright:

Available Formats

Sun Devil Strategic Managers

and Lerissa Burns

OGL355: Leading Organizational Innovation and Change

Tuesday, March 24, 2022

Arizona State University

our team members, we will be able to achieve our goals.

the level of preference

wage increases and career development (Target, 2022).

some of the strategies used to succeed.

government employees and military personnel (GEICO, 2022, para. 2).

the country” (GEICO, 2022, para. 5).

Team Expectations and Project Plan

from one of the aforementioned selections.

timelines are being adhered to.

and to make any necessary adjustments.

when necessary, with our ASU email.

this being an entirely virtual team.?

The techniques that should be utilized is outlined below:

come together to define solutions.

collaboration will be held in order to devise a few potential resolutions.

4. Select and agree upon final solutions

points than the rest of the team on the assignment.

Module 2 Team Project Deliverable -Environmental Analysis

Team Lead: Rachel Stiver

market will be specific with details.

Due by May 30, 2022 7PM Pacific Standard Time.

Due by May 29, 2022 5PM Pacific Standard Time.

Module 3 Team Project Deliverable -SWOT Analysis

Team Lead: Lyneigh Palacios

words in APA formatting, not including SWOT chart

2022 3PM Pacific Standard Time.

Pacific Standard Time.

June 4, 2022 8PM Pacific Standard Time.

4, 2022 8PM Pacific Standard Time.

8PM Pacific Standard Time.

Mountain Standard Time.

Module 4 Team Project Deliverable -Competitive Advantage

Team Lead: Stacey Hopkins

best serve the organization.

2022 3PM Pacific Standard Time

Advantage. Due by June 11, 2022 3PM Pacific Standard Time

Pacific Standard Time

by June 11, 2022 3PM Pacific Standard Time

Advantage. Due by June 11, 2022 3PM Pacific Standard Time

Hopkins. Due by June 11, 2022 3PM Pacific Standard Time

Module 5 Team Project Deliverable -Going Global

Team Lead: Tiffany Luman

problems. Determine the best inclusion practices

by June 18, 2022 11:59PM Pacific Standard Time

18, 2022 11:59PM Pacific Standard Time

Due by June 18, 2022 11:59PM Pacific Standard Time

Module 6 Team Project Deliverable -Executive Presentation

Team Lead: Meghan Radcliffe

gathered throughout the course

Due by June 17, 2022 11:59PM Pacific Standard Time

2022 11:59PM Pacific Standard Time

Module 6 Team Project Deliverable -Sector Env Analysis Comparison

Team Lead: Lerissa Burns

Row 1 says are unique to each sector's environment.

11:59PM Pacific Standard Time

Pacific Standard Time

Pacific Standard Time

Organization Selection Conclusion