This PowerPoint examines the corporate structure of Target in a strategic manor. See how it compares to its competitors and why it is one of the leading retailers in today's society.
Verizon Communications Inc, Industry External AnalysisMaximilian Mirra
My team and I conducted an industry analysis for our client, Verizon Communications Inc. Within the report we have used tools such as Porter's 5 forces, Strategic Group Maps, and used Key Performance Indicators (KPI) to asses the overall attractiveness of the industries Wireless Telecommunications and Internet Service Providers (ISP).
This is the presentation from the capstone simulation competition conducted at Kelley School of Business towards the completion of our MBA. The simulation involved decision on various business functions including Marketing, Operations, Finance and Investor relations. We worked in a team of 5-6 students to run a company making decisions on these functions as a team.
This PowerPoint examines the corporate structure of Target in a strategic manor. See how it compares to its competitors and why it is one of the leading retailers in today's society.
Verizon Communications Inc, Industry External AnalysisMaximilian Mirra
My team and I conducted an industry analysis for our client, Verizon Communications Inc. Within the report we have used tools such as Porter's 5 forces, Strategic Group Maps, and used Key Performance Indicators (KPI) to asses the overall attractiveness of the industries Wireless Telecommunications and Internet Service Providers (ISP).
This is the presentation from the capstone simulation competition conducted at Kelley School of Business towards the completion of our MBA. The simulation involved decision on various business functions including Marketing, Operations, Finance and Investor relations. We worked in a team of 5-6 students to run a company making decisions on these functions as a team.
Our strategic management team conducted a thorough external and internal analysis, considering quantitative data from Best Buy on viability of future strategy and recommendations they should consider.
ECO/561 Week 6 Assignment Rubric
Individual Assignment: Challenges of Expansion to a Foreign LocationPurpose of Assignment
This week students will review and revise their Week 3 Research Analysis for Business assignment based on economic analysis and the feedback provided by their facilitator. Students will also expand their Week 3 analyses to evaluate the challenges of expanding their chosen company's production to a foreign market.
Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products.
Grading Guide
Content
Met
Partially Met
Not Met
Comments:
Evaluated current global economic conditions and their effects on macroeconomic indicators in your selected country. Provided forecasts for population growth, gross domestic product (GDP) growth, GDP per capita growth, export growth, and sales growth.14 points
Evaluated any competitors' existing production in the chosen country. 11 points
Assessed sales forecasts in the selected country. 11 points
Categorized the type of economy that exists in your selected country as closed, mixed, or market. Explained the difference between these types of economies and how might this affect your expansion. 11 points
Assessed how the chosen country's current credit market conditions, especially interest rates and the availability of financing, affect demand for your product or service and your planning or operating decision for your production in that country. 11 points
Analyzed the role of the selected country's central bank on that country's economy. 11 points
Compared the availability, education, and job skills of the work force in the selected country. Discussed any additional challenges of international production, such as political stability, availability of government financing or other incentives, threat of capital controls, and exchange rate risks. 11 points
Explained any additional supply chain challenges you anticipate if attempting to make your product in your chosen country and selling the product in other countries. 11 points
Conclusion:
Created business strategies, including price and non-price strategies, based on your market structure to ensure the market share and potential market expansions and explore global opportunities for your business in a dynamic business environment and provide recommendations. 4 points
Develop a recommendation for how the firm can manage its future production by synthesizing the macroeconomic and microeconomic data presented. 4 points
Proposed how the firm's position within the market and among its competitors will allow it to take your recommended action. 4 points
Recommended strategies for the firm to sustain its success going forward by evaluating the findings from demand trends, price elasticity, current stage of the business cycle, and government. 4 points
Recommended any comparative adv ...
Our strategic management team conducted a thorough external and internal analysis, considering quantitative data from Best Buy on viability of future strategy and recommendations they should consider.
ECO/561 Week 6 Assignment Rubric
Individual Assignment: Challenges of Expansion to a Foreign LocationPurpose of Assignment
This week students will review and revise their Week 3 Research Analysis for Business assignment based on economic analysis and the feedback provided by their facilitator. Students will also expand their Week 3 analyses to evaluate the challenges of expanding their chosen company's production to a foreign market.
Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products.
Grading Guide
Content
Met
Partially Met
Not Met
Comments:
Evaluated current global economic conditions and their effects on macroeconomic indicators in your selected country. Provided forecasts for population growth, gross domestic product (GDP) growth, GDP per capita growth, export growth, and sales growth.14 points
Evaluated any competitors' existing production in the chosen country. 11 points
Assessed sales forecasts in the selected country. 11 points
Categorized the type of economy that exists in your selected country as closed, mixed, or market. Explained the difference between these types of economies and how might this affect your expansion. 11 points
Assessed how the chosen country's current credit market conditions, especially interest rates and the availability of financing, affect demand for your product or service and your planning or operating decision for your production in that country. 11 points
Analyzed the role of the selected country's central bank on that country's economy. 11 points
Compared the availability, education, and job skills of the work force in the selected country. Discussed any additional challenges of international production, such as political stability, availability of government financing or other incentives, threat of capital controls, and exchange rate risks. 11 points
Explained any additional supply chain challenges you anticipate if attempting to make your product in your chosen country and selling the product in other countries. 11 points
Conclusion:
Created business strategies, including price and non-price strategies, based on your market structure to ensure the market share and potential market expansions and explore global opportunities for your business in a dynamic business environment and provide recommendations. 4 points
Develop a recommendation for how the firm can manage its future production by synthesizing the macroeconomic and microeconomic data presented. 4 points
Proposed how the firm's position within the market and among its competitors will allow it to take your recommended action. 4 points
Recommended strategies for the firm to sustain its success going forward by evaluating the findings from demand trends, price elasticity, current stage of the business cycle, and government. 4 points
Recommended any comparative adv ...
Module 2 Assignment 2Use The LibraryUse the TextEvaluate I.docxraju957290
Module 2 Assignment 2
Use The Library
Use the Text
Evaluate Internet Sites
Check the Announcements and the Module 2 Assignment 1 discussion thread for additional information and tips
Assignment directions
Apply concepts and theories from the assigned reading; use unbiased sources; do not restate – analyze and explain
Assignment Directions
This assignment has you complete two parts of a strategic business plan.
To see how those parts fit into a full business plan, see the outline in the link for a strategic business plan outline in the assignment directions or under Doc Sharing and Module 2.
This paper has 3 Parts. The first 2 parts are based on your internal and external analysis (see next slide). The 3rd part includes your analysis of competitors.
Part 1: External Environment Analysis
Part 2: Internal Environmental Analysis
Part 3: Competitor Analysis
Assignment
Part 1: External Analysis
Identify driving forces in the industry
Analyze the dynamics of competition using Porter's Five Forces Model
Part 2 Internal Environment Analysis: Finance
Create a Balanced Scorecard
Conduct a Ratio Analysis based on Harley Davidson’s five-year financial performance
Part 2 Internal Environment Analysis: Competitors
Describe 2 Main Competitors and perform Ratio Analysis
Describe trends in financial performance over five years, and compare the trends to industry averages of the 2 competitors.
Provide statistics on the size of the Motorcycle Industry (revenue, growth rate, number of units sold by manufacturer/country, etc. )
Summarize issues and threats
Address metrics and measures for Financial ; Customer; Internal Business Process; Learning and Growth
Part I – Analysis of the External Environment
As part of the Strategic Business Plan, you have been asked to:
Identify and analyze the major driving forces for change in the external environment of the motorcycle industry.
Analyze the dynamics of competition using Porter's Five Forces Model of Competition.
Correctly assess the dynamics of competition.
Provide at least three statistics about the size of the motorcycle industry such as revenue, growth rate, number of units sold by manufacturer/country, etc.
Summarize the strategic issues firms in this industry face and identify their biggest threats.
Content Information to use as a research and analysis Guide
I. Industry and Competitive Analysis
Questions
involved
What are the boundaries of the industry?
2. What is the structure of the industry?
3. Which firms are our competitors?
4. What are the major determinants of
competition?
Three stages in Porters external analysis
Analyze industry structure
How concentrated is it?
What are the dynamics
Analyze the industry
Are there powerful buyers?
Are there powerful suppliers?
Analyze its long term viability
Will more firms enter?
Will substitute products or services be found?
Section 2 up to barriers to entry
The Firm’s External E ...
· The 4 to 5-page limit refers to your analysis. The page limit do.docxalinainglis
· The 4 to 5-page limit refers to your analysis. The page limit does not include the reference page, the 5-forces diagram, nor a title page. If you prepare any supporting analysis that can be shown in an appendix page. So, you have 4 to 5 pages available for your written analysis.
· Introducing and describing the company (what it does, key products, markets, distribution) and the industry (key competitors, market size) should be succinct, no more than a half a page. Dedicate approximately 1/2 page introducing the company and it's industry. Beyond that don't spend much time or space describing basic info about the company. For example, providing the history of the company is not relevant to the model.
· The bulk of your writing should be specific to the model as it applies to your company, evaluating each of the five forces thoroughly. Assume the reader is a business person who has a basic knowledge of the company/industry.
· Your analysis should inform the reader of those aspects of the business and industry relevant to each of the five forces. For example, if sales figures are needed to establish the company's position in their industry, use that information in the industry competitors (rivalry) force.
· Use outside references. Key analysis points are to be referenced. As master’s-level business students it is expected that you will utilize sources beyond the company website, the Porter article itself, and sites like yahoo finance. You can use these sites but are strongly advised to not limit yourself to them.
· Thoroughly analyze each of the five forces. The Porter article gives you criteria and examples for each force that can be investigated as you prepare your analysis. Pick two or three for each force and use these to guide your paper.
· The 1-page model should be prepared after you complete your paper. It is nothing more than a visual, concise representation of your analysis. It does not have to be fancy. It does have to be clear and represent your analysis. Use exhibit 2.7 or the model in the Porter paper as your guide. Label each force as high or low, based on your analysis. Insert three to four (max) key bullet points related to each force into the five boxes in the model.
· Proofread your paper. Spelling, grammar, and APA.
BBA 4951, Business Policy and Strategy 1
Course Learning Outcomes for Unit III
Upon completion of this unit, students should be able to:
3. Analyze external and internal audit processes.
9. Assess the strategy evaluation process.
Reading Assignment
Chapter 3: The External Assessment
Chapter 4: The Internal Assessment
Unit Lesson
External Assessments
During this unit, we will explore the factors that impact an internal and external assessment. Let us begin with
the external assessment. To effectively develop a successful strategic plan, the organization must be aware
and adapt to the external environments. These environments include identifying and incorporating .
Under armour case analysis by Njinyah CiroCiro Njinyah
Under Armour is a company started by the former University of Maryland football player Kevin Plank. Although the company started in a basement, they have overcome many obstacles financially to have a continual growth in sales. The founder has been successful in developing new and innovative gears and apparels to help stay ahead of their competitors. Under Armour finds it extremely important to maintain relationships with their managers and more importantly with professional teams. The company has prided itself on maintaining a competitive advantage by always having top notch products and adopting new strategies and ideas to outcompete the rivals. The company strategy and initiatives clearly seems to be working since Under Armour is able to compete with Nike and Adidas. Under Armour mainly markets to people with active lifestyle, as a result the company made it a priority to be a major player in the life of people who play sports or enjoy being physically active globally. Some competitive advantages enjoyed by Under Armour are the amount of fitness product they offer. Also the ability to recognize the company is simple because their logos are easy to identify. With the strong brand loyalty and the cost advantage that the company has, it is evident that the company will expand in domestic as well as international market.
The company needs to expand their target market from national to international and develop clothes for people interested in a more casual look. The company should move from the performance based apparels to a more diverse set of product segment which include athletic and sportswear. The fact that Under Armour narrows its product to athletes makes the company to lose customers to their competitors who sell both athletic and casual wears.
ECO 520 Final Project Investment Opportunity Analysis Guidelines .docxjack60216
ECO 520 Final Project: Investment Opportunity Analysis Guidelines and Grading Guide
Overview
This investment opportunity analysis project is designed to guide you through the process of applying key components of advanced microeconomics theories to typical
business decisions. You will assume the role of an entrepreneur, and you will conduct an analysis focusing on an investment opportunity of your choice. In your analysis you
will carefully evaluate key factors influencing the demand for the product, cost and supply issues, the role of market structure, and competitive analysis on firm strategy.
You will also analyze the effects of government regulations and market intervention on potential profitability, and you will use price and non-price strategies to support
product introduction. Using the above analyses, the last step in your final project requires you to model the potential financial viability of the proposed new product using
approximate figures. You will determine whether or not to recommend investing in the development and commercialization of the investment opportunity to your business
partners.
This assignment will assess your mastery of the following course outcomes:
• Analyze product demand, company revenues, and the effects of external market influences through the use of microeconomic principles
• Analyze organizational costs and identify technical and economically efficient methods of production and acquisition of resources through the use of microeconomic
principles and tools
• Evaluate the effect of market structure and consumer behavior on firm strategies and profitability
• Recommend pricing strategies based on marketing conditions, which improve firm profitability and can be effectively implemented
• Evaluate government regulations and interventions for their effects on business and market performance
Prompt
Develop an analytical document informed by key advanced microeconomic theories and principles. The purpose of your analysis is to assist with the decision to implement
a product or service for a start-up company (submit your product or service for approval to the instructor).
Specifically, the following critical elements must be addressed in your analysis:
1. Opportunity Background and Demand: In this section you will identify an appropriate investment opportunity specific to introducing a new product or service. You
will analyze product demand and company revenues specific to this opportunity applying key economic principles to support your reasoning.
a. Background: Provide a brief background on the company, product line, and proposed product. This is where you would lay the foundation for the analysis
that follows. What is the significance of this opportunity?
1
b. Demand: Evaluate key non-price variables that are expected to support existing or potential demand specific to this opportunity and support your
evaluation with sources. For example, this is where you want to include rationale f ...
MGMT 3000 - Winter 2021
Sections 3 & 4
Grading Rubric Case 1
Masterful/ Sophisticated
Competent/ Proficient
Novice/ Needs Improvement
Incomplete
Intro & Conclusion
· Focus
· Controlling Idea
· Purpose
Engaging, rich, unified, and clear thesis for specific assignment purpose; sets up the rest of the writing in a deep and original manner.
5 points
Common, sound understanding of the topic and assignment purpose; sets up the rest of the writing in a competent and standard manner.
4 points
Lack of thesis development, clarity, and purpose; limited understanding of issues; illogical or confusing rambling about topic and assignment goals.
3 points
Incomplete
0-2 points
Analysis and Implication of External Environment
Provides a thorough analysis of the external environment (i.e., PESTEL and Industry Structure – including potential complements), and develops strong implications from the analysis for understanding the situation.
18-20 points
Provides a reasonable analysis of the external environment (i.e., PESTEL and Industry Structure – including potential complements), and offers limited but appropriate implications from the analysis for understanding the situation.
16-17 points
Analysis of external environment is missing, or is incorrect about, key dimensions in the external environment (e.g., PESTEL and Industry Structure – including potential complements) or provides no or incorrect implications from the analysis for understanding the situation.
14-15 points
Very incomplete analysis
12-13 points
Analysis and Implication of Internal Capabilities
Provides a thorough analysis of the resources, capabilities and competencies of the company, and a thoughtful application of the VRIO framework to the company’s competitive advantage, and provides insightful implications from these analyses for understanding the situation.
18-20 points
Provides a reasonable analysis of the resources, capabilities and competencies of the company, and an adequate application of the VRIO framework to the company’s competitive advantage, and provides appropriate implications from these analyses for understanding the situation.
16-17 points
Provides an incorrect or is missing key elements of the analysis of the resources, capabilities and competencies of the company, or application of the VRIO framework to the company’s competitive advantage, and provides no or incorrect implications from these analyses for understanding the situation.
14-15 points
Very incomplete analysis
12-13 points
Analysis and Implication of Competitive Rivalry
Provides a thorough analysis of the competitive rivalry of the company and competitors and provides insightful implications from these analyses for understanding the situation.
18-20 points
Provides a reasonable analysis of the competitive rivalry of the company and competitors and provides appropriate implications from these analyses for understanding the situation.
16-17 points
Provides an incorr ...
Industry and Competitor Analysis | Five Competitive Forces | Five Primary Ind...FaHaD .H. NooR
Industry and Competitor Analysis | Five Competitive Forces | Five Primary Industry Types | What Is Industry | Competitor Analysis | Studying Industry Trends |
Marketing Analytics: A Smarter Way for Auto and Home Insurers to Gain Competi...Cognizant
For personal lines carriers, defensive marketing strategies are no longer enough to win and retain customers. Given the industry's questionable returns from past marketing efforts, insurance companies will have to invest wisely and work smarter to take advantage of today's advanced marketing analytics capabilities.
Purpose of Assignment This week students will review and revise .docxmakdul
Purpose of Assignment
This week students will review and revise their Week 3 Research Analysis for Business Signature Assignment based on economic analysis and the feedback provided by their facilitator. Students will also expand their Week 3 analyses to evaluate the challenges of expanding their chosen company's production to a foreign market.
About Your Signature Assignment
This signature assignment is designed to align with specific program student learning outcome(s) in your program. Program Student Learning Outcomes are broad statements that describe what students should know and be able to do upon completion of their degree. The signature assignments might be graded with an automated rubric that allows the University to collect data that can be aggregated across a location or college/school and used for program improvements.
Assignment Steps
Resources: Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products.
Revise your Week 3 assignment, Research Analysis for Business, using the feedback provided by your facilitator. This Week 6 report should only include one conclusion, so you will need to rewrite the conclusion you included in your Week 3 assignment, Research Analysis for Business.
Select a foreign market in which to expand your chosen product. If you wish, you may use one of the countries your team analyzed in their Week 5 Comparative and Absolute Advantage Assignment.
Prepare a minimum1,750-word report addressing the points listed below. The use of tables and/or charts to display economic data over the time period discussed is highly encouraged, you may submit any economic data in Microsoft® Excel® format in a separate file. You may use the U.S. Department of Labor's Bureau of Labor Statistics (BLS), U.S. Dept. of Commerce's Bureau of Economic Analysis (BEA), the Federal Reserve of St. Louis's FRED data, the CIA World Fact Book, World Bank data, and World Trade Organization, or other appropriate sources you might find on the Internet or in the University Library. The new sections of your report should:
· Evaluate current global economic conditions and their effects on macroeconomic indicators in your selected country. Provide forecasts for population growth, gross domestic product (GDP) growth, GDP per capita growth, export growth, and sales growth.
· Evaluate any competitors' existing production in the chosen country.
· Assess sales forecasts in the selected country by using the Federal Reserve of St. Louis's FRED data, the CIA World Fact Book, World Bank data, World Trade Organization, or other appropriate sources you might find on the Internet or in the University Library.
· Categorize the type of economy that exists in your selected country as closed, mixed, or market. What is the difference between these types of economies and how might this affect your expansion?
· Assess how your chosen country's curren ...
· Complete the Assignment, Personal Application Paper· After r.docxLynellBull52
· Complete the Assignment, "Personal Application Paper"
· After reviewing what you have written for the Personal Application Conferences each week and your interaction with your fellow students about this, write a final paper incorporating all of the topics covered weekly in the PA and how what you have learned in this course applies to the organization you work for. It should be more than just a simple cut and paste from your earlier PA postings.
Papers should be approximately 5-7 pages in length. This page limit is forces you to think hard of what are the key points you want to make and avoid generalities.
The following is the past 8 weeks discussion questions in yellow and the answers to help you with the paper.
What kinds of industries tend to be better performers in the medium to long term? Why? What kinds of industries tend to do poorly in the medium to long term? Why?
Can you make the claim that some industries are inherently more profitable than others? Provide arguments and examples to justify your response.
Generally speaking, for companies in the same industry, what factors would explain differences in company performance over the long term?
Your thoughts about the fundamental strategic issues facing the industry in which your organization exists. Compare the performance of your company against the industry within which it operates, for 1 year and 5 years, using the Morningstar database or any other source of information that is appropriate
1. The kind of industries which tend to perform better in the medium to long term include railroad, insurance service providers, and resorts & casinos. This is because of the management practices used in the industries and the pattern of cash flow that the industries have. The revenue flow in the resorts and casinos may be volatile during the short term but when viewed in the medium to long term it is stable. The management practices used in the industries such as the sale of time shares smoothen the volatilities that commonly experienced in the industries. Industries such as savings & cooperative banks and independent power production tend to perform poorly in the medium to long term period. This is because the savings and cooperative banks are affected by both the economy and customer demands hence the varying year returns. Savings and cooperative banks avail various substitutes to customers in the long term. These substitutes determine the competition in the industry. Independent power production industry performs poorly because it is privately owned .
2. Some industries are inherently profitable than others because some of the industries perform better in the medium to long term compared to others. For example the returns in resorts and casinos may be volatile in the short run but stable in the long term while industries such as the coal and gold industries have low returns in the short run because of their nature of getting depleted with time and hence depreciating value. This, there.
50 weightageInternationalisation of BusinessIndividual essa.docxalinainglis
50% weightage
Internationalisation of Business
Individual essay assignment
You need to select a multinational corporation from Fortune’s GLOBAL 500 MNCs list (http://fortune.com/global500/). We suggest you to think of your future career and industry that you are interested in while selecting a company from the list.
Step 1
Insert a map of your country.
2
Although it is not mandatory, we encourage you to select an MNC from an emerging country (such as Brazil, Russia, India, China, Indonesia, South Africa, UAE, Vietnam, Malaysia, South Korea, members of AEC or Mercosur)
Step 1
Insert a map of your country.
3
2.1 The Analysis of your Multinational Corporation
In this section you will need to present and analyse key data supporting the status of your company as a multinational corporation.
You can include the following : year established, business or industry involved in, Fortune 500 ranking in 2015, recent years sales and profit performance/figures, global sales/profits, key competitive advantage, markets or countries served,( milestones in appendix) if relevant to show its internationalisation trends
It is highly recommended that you use key academic sources to illustrate and explain the concept of MNC in this section.
Which country and which industry will this essay focus on.
Select one country where your company has invested in (in any foreign direct investment forms). Then, you need to analyse the internationalisation of the company. In doing this you can follow the following points:
STEP 2:
Insert a picture of one of the geographic features of your country.
4
Global sales/profits trends,
%of sales or profits from overseas business
Ranking in Fortune 500.
No of countries and total workforce
Overview of the company as an MNC
What are its internationalisation objectives, industrial products and countries (key markets if operating in many countries) in which it operates
:
You will need to focus on ONE factor from the host country that influences the internationalisation process of the firm. As we focus on political economy and socio-cultural factors in the first part of this course, we recommend you to answer the following questions in this section:
What is the key factor (refer the above factor – is it political economy or is it socio-cultural factor)from the host country that promotes the internationalisation process of your firm? Why?
Please use one theory from the course to support your argument(s). The application of some theories from this course such as Uppsala Internationalisation theory, Eclectic paradigm, and Porter’s diamond theory can also be useful at this point.
STEP 2: Host Country Analysis
Insert a picture of one of the geographic features of your country.
6
Using Samsung’s entry into India market as example
Analyse one relevant factor in depth to support your argument why that particular factor has positive or negative impact on India’s mobile phone industry and Samsung’s choice of entry m.
Here is the brief overview of this cumulative Session Long Project (mealsdeidre
Here is the brief overview of this cumulative Session Long Project (SLP). In this research project, you would work as a marketing consultant to develop a feasible marketing plan for your client. You would conduct secondary research in SLP1 and SLP2 to glean the necessary information for your marketing plan in SLP3 and SLP4.
It is important to conduct quality market research on your focal product/company in order to develop realistic and workable marketing plans. Generally speaking, there are two types of research. One is secondary research, which refers to data collection using existing sources, and the other is primary research, which is your own data collection for the specific study at hand. The purpose of market research is to collect usable information to make more informed decisions on the business problem, thus increasing the chance of business success in the marketplace.
Please check the
outline of the
marketing plan
, which provides information on:
The final format for this cumulative Session Long Project;
A list of topics for the whole project;
The continuity and connections among SLPs 1-4.
In this module SLP1, identify a company and a charge (or task) for this marketing research project and conduct situation analysis related to your charge. This is the first step of this cumulative research project. You need to review all four SLPs first in order to better understand the requirements for this project.
Product Statement
In this section, describe the company and the product that is going to be the focus of interest for your marketing plan. For example, if your client is Apple, provide background information on the organization (e.g., what it is, what it does, history, success in what it is doing, etc.). If the charge is to market a new product (such as iPad 6), describe what iPad is, how long it has been around, how successful it has been, and who the target audience is. Be specific and detail-oriented, and do not assume that the reader is familiar with the company and product.
Identify a company and a charge for your research project at the very beginning, based on the detailed requirements for this cumulative Session Long Project. The new charge is a hypothetical task, which should be based on one of the company’s existing brands or products. It is also better to identify a new product charge for existing public firms so that you can find enough information for your task. For example, you may pick one of the following companies and charges.
Apple needs to increase its market share for iPhone 8.
Microsoft intends to increase sales of Xbox One S 10TB console.
Fitbit plans a successful release of Charge 3 wristband.
Ford needs to have a successful introduction of the 2018 Fusion.
Amazon wants to increase brand awareness for Echo digital media streamer in Japan.
Do not choose the product that is the basis of Case 1.
It is best to check with your instructor regarding the company and the charge you choose to analyz ...
Markstrat simulation report. A team of 5 students from different countries managed the marketing department of
a virtual firm (Markstrat Simulation). The team had to make decisions regarding marketing
mix, R&D, brand portfolio, commercial team and market research studies. Team
performed well: at the end of the simulation, firm ranked 13 out of 46 virtual firms with
reference to Stock Price Index (SPI). University project. In English
GBS Sample 1Name_ID_GBS Task 1.pdf1 P a g e .docxshericehewat
GBS Sample 1/Name_ID_GBS Task 1.pdf
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Global Business Strategy
Level 7 - Unit 7.2
International Business
Environment Analysis.
Report – Activity 1
Revised 18 Sept 2015
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Contents
Section Details Page
Activity 1
Introduction Company profile 4
1a International business environment Analysis Techniques 4 – 7
1b Analysis of the micro and macro of Marks & Spencer‟s PLC 7 – 8
1c The impact of international business environment on Marks & Spencer‟s 8 – 9
1d What does globalization mean for Marks & Spencer‟s? 9 – 10
1a (2) What is the extent of globalization on organizations? 10
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1b (2) Operating structures different organizations in international markets. 10 – 11
References 12
Introduction
Marks & Spencer PLC was founded in 1884.It has grown from a single market stall to an
international multi-channel retailer. They sell stylish, high quality value clothing and home
products as well as food, responsibly sourced from around 3,000 suppliers globally. Their
portfolio covers general merchandise, food, international and multi-channel across 54
international territories with nearly 86,000 employees.(Marks and Spencer, 2014).
International business environment Analysis Techniques
Business environment is the combination of internal and external factors that influence a
company‟s operating situation and the overall business. It is both Micro and Macro in nature.
Micro or internal factors are controllable and could include management style, organizational
culture, mission and value statement. Whereas Macro or external factors are uncontrollable these
http://www.businessdictionary.com/definition/combination.html
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factors are often both dynamic & complex. Business environment factors can include new
policies, procedures, government changes, improvements in technology, social and economic
trends(Nonaka, I., and Takeuchi, H, 1995).The reason for analyzing the business environment is
to highlight opportunities and threats. Knowing the opportunities and threats to the business
allows the company to set a strong business strategy and understand better where to invest,
expand, diversify and downscale. There are a number of different tools we can use to analyse
both the Micro & Marco factors within a business.
Micro can be analysed with Porters 5 forces model.Porter identified that there are 5 key
forces that influence business that needed to be analysed in order to develop a competitive
advantage (Porter, 1985). These forces are supplier power, buyer power, competitive rivalry,
threat of substitution &threat of new entryand are used for strategic industry analysis. The
positives of using this technique to analyze is that it looks at a wider range of competitors and it
forces the business to look externally. However this is a relatively old model that may not be
suitable ...
1. Prestige Worldwide
Strategic Analysis
Target (TGT)
Summer 2016 MAN 4720 20-9
Taylor Essma, *Anthony Gassman, Mohammed Hoosein, Zackary Jones, Ryan Lantz, Brian
Saunders
Word count (4144)
2. 2
Executive Summary
The purpose of this report is to conduct an internal analysis for the department store firm
“Target Corporation,” and to use the resulting findings in conjunction with the results of the
external Industry Analysis report to formulate a strategic recommendation for the focal firm. These
findings will be compiled into several distinct sections – Introduction, a summation of the previous
Industry Analysis report, an Internal Analysis, Financial Analysis, an analysis of the firm’s
Competitive Advantage, an industry Problem and Strategic Recommendation section as well as a
potential Fallout section, followed lastly by a Conclusion of findings. Posted at the end of the
report are extraneous contents such as the Appendix page.
The report begins with a summation of the previous external industry analysis report. The
primary findings of this report were derived from the use of analysis tools such as Porter’s Five
Forces model and the PESTEL framework. The conclusions within the report found that the
industry was neither attractive nor unattractive with a rating of 2.5 Stars, and that the most
important external factors in this industry are political, technological, and economic, with
economic being the most important factor.
The next section starts the bulk of the report with the firm analysis, beginning with an
internal analysis. The internal analysis consists of examining the firm’s value-chain activities and
running the resulting resources and capabilities through the VRIO framework to determine the
core competencies of the focal firm. We concluded that the firm has at least three core
competencies in their brand image, consumer loyalty through care of the triple-bottom line, and a
superior guest experience to rivals in the industry. We have found that Target Corporation is
utilizing these core competencies well and is organized to continue to capture their value. The
following section of the report is an examination of the firm’s competitive advantage in the
industry. The primary metric used in this section is Return on Assets. Using this metric over a 5
year period, discounting a security breach in 2014, it was shown that Target does have a sustainable
competitive advantage in the industry. Next, a financial analysis of the focal firm is conducted.
This section contains the use of several financial metrics that are used to uncover Target’s current
financial position in its market. We’ve concluded from the results of these metrics that Target has
a favorable financial position in the market and is continuing to improve on that position through
worthwhile investments.
Following the financial analysis section is the recommendation section of the report. This
section of the report contains three subsections - Problems, Recommendation, and Fallout. The
problems section outlines a major problem facing the department store industry currently, that
being the very high amount of competitive rivalry happening within the industry and noting the
industry is in the “decline” phase of its life-cycle. Of the main strategies to consider when in a
decline phase, we concluded the “maintain” strategy should be used by the focal firm, spurred to
success through further differentiation from competitors. In light of these choices, we formulated
a strategic recommendation for the firm, a partnership with the firm La-Z-Boy, creating a
showroom floor in-store and displaying certain furnishings. Assuming a 50/50 profit split, this
3. 3
project shows a positive NPV of $14,200,000 and an IRR of 89%. For full details concerning the
strategic recommendation please see the appropriate section.
Finally the report ends with the fallout subsection, this section hits on a few key potential
problems moving forward with the recommendation and solutions to those problems should they
arise. The noted problems were issues in creating the space needed for the showroom, which can
be minimized through the offset of low cost inventory and by targeting the lower percentages of
sales. Another problem is competitors in the market, as they may try to imitate the idea if it is
successful. We do not consider this to be a big issue however; if Target is the first to implement
and further differentiate itself, and combined with the already existing unique in-store atmosphere,
they will have an advantage. The third problem is that of a decrease in margin by ~30% if there is
a disruption in La-Z-Boy’s supply. This issue can be circumvented through a partnership with a
different supplier. This section is followed by a brief conclusion which summarizes all important
findings within each section of the report as well as restates the strategic recommendation.
1. Introduction
We are Prestige Worldwide and we are a group of consultants who have constructed a
strategic analysis for Target in order to provide strategic recommendations to business executives.
According to our CEO at ASI, the goal of this report is to answer two main questions provided to
us. The first question to answer is, “Is the firm’s strategy consistent with its internal resources and
capabilities, as well as the external environment?” Secondly, “What changes should be made in
the current strategy—and in investments in resources and capabilities—to improve overall
performance?” Included in the report is the Industry Analysis, which was conducted using
PESTEL and Porter’s 5 Forces. Also included is an analysis of Target’s mission and vision
statement. The internal analysis of Target was conducted by using the value chain analysis, VRIO
framework, and strategic positioning. The metric return on assets was measured in order to
determine whether Target has a competitive advantage within the industry. A variety of
calculations were constructed in order to determine the financial analysis within the firm. In
conclusion, we will report the problems, challenges, and opportunities in order to provide a
strategic recommendation to improve the overall performance within the firm.
4. 4
2. Industry Analysis
The definition for the industry, according to IBIS World is as follows, “Department stores
retail a broad range of general merchandise, such as apparel, jewelry, cosmetics, home furnishings,
general household products, toys, appliances and sporting goods. Discount department stores,
which are also included in this industry, retail similar lines of goods at low prices.” The vital factors
to understanding profitability in the industry are per capita disposable income and the cost of crude
oil. The future of this industry looks to be declining because of technological advancements in the
way consumers shop in the move to e-commerce.
Based on our research and analysis of the discount department store industry, we have
concluded that due to high rivalry among competitors, threat of substitutes, and threat of new
entrants, the industry is neither attractive nor unattractive and is rated 2.5 stars. (2.5*) The high
rivalry among the existing competitors is the largest factor in determining the attractiveness of the
industry and is rated 0 stars. (0*) Threat of substitutes is a close second, due to the high availability
of retail stores and products. Lastly, the ease of which new firms may enter the industry contributes
to our overall conclusion on the industry’s attractiveness.
When conducting the Environmental Analysis on this industry, using the PESTEL
framework, we determined that the environmental factors with the greatest impact on the industry
are political, technological, and economic, with economic being the most important factor. Using
Porter’s Five Forces, we concluded that the Threat of New Entrants was moderate, the Power of
Suppliers was low, the Power of Buyers was moderate, the Threat of Substitutes was moderate,
and finally the Rivalry Among Existing Competitors was high.
This industry is moderately impacted by legal changes. Economic influences such as per
capita disposable income and the price of oil have the greatest impact on the industry. Per capita
5. 5
disposable income is expected to rise and the world price of crude oil is expected to fall in 2016.
The world price of crude oil has a big impact on the discount department store industry as they
incur large shipping costs. With the expectation of falling crude prices in 2016 along with
decreasing unemployment, the discount department store industry looks poised to benefit from
consumers with more money in their pockets.
Political influences play a major role in this industry as the major oil producers, Russia,
the United States, and the OPEC nations grapple for dominance in the oil industry. OPEC nations
have a huge cost advantage as they can produce a barrel of oil for about $10 whereas Russia can
produce at about $20 per barrel and the U.S. produces at a whopping $30 to $60 per barrel
according to CNBC. An important political factor in play is the ongoing fight for an increased
minimum wage. According to IBISWORLD wages in the industry are currently 11.7% of total
revenues and are expected to increase to 12.5% of total revenues in 2021.
The Threat of New Entrants is directly correlated to how low the barriers of entry are, and
in this industry we concluded it is neither high nor low resulting in a ½ star rating. (½ *) There are
a few large companies in this industry that have the benefit of economies of scale. This decreases
the cost of goods sold resulting in either higher profit margins or lower prices passed down to the
consumer and results in large companies retaining the majority of the market share. In contrast,
the capital intensity is low along with regulations and policies. It does take some capital to pay for
the overhead of a retail store but compared to other industries the capital investment is low due to
minimal operating or manufacturing equipment. There are not many legal procedures to enter this
industry unlike other industries such as aviation or food service. (IBIS World, 2016)
The Threat of Substitute products is directly related to the availability of alternate products
in the industry. Due to an attractive price-performance trade-off of switching products and the
6. 6
buyers cost of switching to alternative products being low, we concluded there is a moderate threat
of substitutes in this industry. The high level of competition within the industry and the amount of
product choice afforded to the consumer allows consumers to go to other department stores with
relative ease. However, there are some advantages afforded to department stores. First is the ability
to shop for many types of different products in one location. Brand loyalty can also play a part in
thwarting the threat of substitutes, as consumers are more likely to shop with firms they trust.
The Rivalry Among Existing Competitors in this industry is high and the growth is
declining. The industry is dominated by a few companies, whose ability to separate themselves to
gain and sustain a competitive advantage is crucial to their ability to maintain a profitable
enterprise. Differentiation has become an increasingly dominant strategy because of a few cost-
leader firms in the industry and the commodity type products being sold. The major players in the
industry are competing with current trends by putting new focus on their websites and apps. New
entrants to the industry would find this more difficult due to lack of following and brand
recognition. Rivalry has been increasing through multiple channels as the major players in the
industry are now integrating distribution online as well as in store.
3. Firm Analysis
3.1 Mission and Vision
“We fulfill the needs and fuel the potential of our guests. That means making Target your
preferred shopping destination in all channels by delivering outstanding value, continuous
innovation and exceptional experiences—consistently fulfilling our Expect More. Pay Less.®
brand promise.”(Target, 2016)
3.2 Internal Analysis
7. 7
The value-chain of the focal firm, Target Corporation, consists of its primary
activities that directly contribute to its profitability. According to Target’s corporate responsibility
report, their value-chain contains 5 key steps. The first step is Design, where brainstorming ideas
for product and store innovation takes place. The next step is Produce, where ideas and raw
materials meet to form new products and services. The third step is Ship, which is the shipment of
these products and services to the consumer’s geographical area. The fourth step is Sell, which
encompasses the Target guest experience. Finally the last step in the chain is called Use and Reuse,
this post-purchase process provides incentives for guests to reduce waste and recycle their items
once they are through with their use.
Through an examination of the focal firm’s value-chain, several resources and capabilities
emerge. These include tangible resources such as number of shipping locations, the number of
retail locations, backward-integration through store-owned brands, and store team members; as
well as intangible resources such as the in-store atmosphere, the Target brand, marketing and
advertising, and a care for the triple-bottom line through community outreach and incentivizing
proper item recycling. After the identification of the firm’s resources and capabilities, an analysis
of these resources using the VRIO framework is conducted. For any of these resources and
capabilities to be core competencies for the firm, they must first be shown to be valuable, rare,
costly to imitate, and the firm must be organized to capture the resource’s value. We’ve concluded
from the use of this framework that Target Corporation has at least 3 core competencies, allowing
for a competitive advantage in their industry, stemming from a mix of resources and capabilities.
One of the firm’s core competencies is their easily recognizable brand name and logo. This
is an intangible resource but has proven to be an invaluable one, as firms that can differentiate their
brand in a highly competitive industry will position themselves for further success. The second
8. 8
core competency of the firm is its superior guest experience. This competency again is focused on
differentiating the firm from its myriad competitors. Target strengthened this competency through
customer service innovations such as the customer help call buttons and improved employee
training. A third core competency of the firm is their consumer loyalty. This competency was
strengthened through the firm’s commitment to their triple-bottom line, such as the firm
reinvesting a percentage of profits into the community and incentivizing recycling of used items.
This yet again ties into a differentiation strategy, as this type of behavior separates the firm from
others in the industry and cultivates trust with consumers, motivating them to shop with Target
over other firms.
Target has invested heavily in these competencies in order to push a broad differentiation
strategy that distinguishes them from its competitors in the industry and creates a competitive
advantage for the firm. The firm is playing on its strengths and is organized to consistently capture
the value of these competencies, and will see continued success and competitive advantage from
them, further improving their strategic position in the industry.
3.3 Competitive Advantage
The major public competitors in the industry identified were Nordstrom, Dillard’s,
JcPenney, Sears, Target, Macy’s, and Kohl's. The chosen metric used for determining how each
company stacked up against one another was return on assets. According to the Harvard Business
Review return on assets is one of the best and most underutilized financial metrics to measure
competitive advantage. “To analyze long-term profitability trends across all public companies in
the US, return on assets avoids the potential distortions created by financial strategies.” (Harvard
Business Review, 2010) If you look below at the appendix for the Return on Assets graph you will
notice Target is above the industry average line. This is not a result of Target doing so well but
9. 9
more so the fact that Sears and JcPenney are doing so poorly that the average is being skewed
downward. The other four companies are surpassing Target in average ROA thus telling us that
Target has not sustained a competitive advantage, according to this metric. Looking at average
ROA alone Target is mediocre at best. This said, it should be understood that Target was
unfortunate enough to undergo an enormous data breach in 2014.
According to the New York Times there was a 148 Million dollar cost associated with the
breach in addition to lost potential profits due to lack of consumer confidence. (Abrams, 2014)
This is obviously reflected in the ROA used to measure competitive advantage. Looking at the
most recent year of ROA it would seem Target has made a miraculous turnaround and obviously
gained back their consumer confidence. Using this reasoning, Target currently has the competitive
advantage. In the strategic group map created below, the variables used were percentage of
markups and number of locations. Markups was used because it directly suggests how much a
consumer is willing to pay for the same product at each store. The second variable, number of
locations, suggest the importance each firm places on being physically as close as possible to as
much people as possible. Looking at the strategic group map you will notice there are 3 clusters.
The first being the cluster that has a high markup and a medium amount of locations. The second
cluster are the firms that have relatively few firms but about average markups. The last cluster and
the one that includes our subject firm Target has many locations and the lowest markups.
Essentially Target is trying to attract consumers by being extremely accessible and keeping prices
low, while attempting to have a higher average ticket price per customer.
3.4 Financial Analysis
According to IBIS World, Target commands the majority of the market share for the
discount department store industry. While Target’s current ratio, return on equity, and return on
10. 10
revenue have remained relatively steady (with the exception of 2014, due to their security breach)
over the past five years, their gross margin has been steadily declining. Target claims that their
gross margin is impacted negatively due to “seasonal markdowns” and “product promotions” but
compensate with higher purchase prices per customer, relative to competitors. Target’s strategy
in this area is simply that they can accept a lower gross margin on products as long as each
customer spends more on average while shopping at Target.
Major outliers in the debt ratio and quick ratio are apparent in 2014; these oddly poor
financial positions during that time were due almost entirely to the credit card breach that led to
Target’s 46% drop off in profit for the quarter (Forbes, 2014). For this industry, the average return
on assets is roughly 5%, a number that Target has more than achieved in the past five years
excluding 2014, topping out at over 8% in the fiscal year ending 2016, which is a five-year best
for them. A key area that Target has focused on as of late is their e-commerce sales. Their fourth
quarter online sales in 2015 (holiday season) rose a whopping 34%, blowing away the growth of
their competitors (Investorplace.com, 2016). If Target is able to continue to grow their online
presence, their profitability as a firm will have the opportunity to skyrocket. Target’s current P/E
ratio of about 12.85 is a solid number for investors to look at, along with a relative consistency
with their common stock after recovering from the 2014 drop in price.
In addition to their consistency, Target pays a higher dividend than most in their industry,
which is also attractive for potential investors. On the books, it may look as if Target has had
better numbers in the past, and that is true to an extent. While their net income has been slightly
lower in recent quarters, which is highly due to their extended marketing campaigns as well as
costs to cover a move to e-commerce, this can be looked upon as an investment for higher sales
11. 11
and revenues in the near future. Overall, Target has a favorable financial position in the market
relative to competitors and is continuing to improve and invest in the future.
4. Strategic Recommendations
4.1 Problems
In this industry, threat of rivalry is considered the highest of all the five forces. Rivalry is
high in this industry because the other forces are strong which causes the firms in the industry to
compete with a high level of intensity. This high intensity rivalry is also an indication that the
department store industry has entered into the decline stage of the industry life cycle according to
IBISWORLD. When an industry is in the decline stage, it has four strategic options: exit, harvest,
maintain, or consolidate according to Strategic Management: Frank T. Rothaermel.
Exiting the industry does not appear to be a viable option, as the exit barriers are high. A
firm attempting to exit the industry would be required to sell its real estate which would pose
significant challenges due to the fact that there is so much of it. A harvest strategy is not a good
path forward either. This strategy attempts to generate the most profit from existing product lines
without much investment in product innovation or customer service. Given the nature of the
industry and the intense rivalry within it, this strategy would most likely not work well. The other
two options, maintain and consolidate seem to be the most promising for this industry. The
maintain strategy can be implemented through building a strong base of brand loyalty through
differentiation.
The consolidation strategy is also a possibility for this industry however it poses significant
risks due to the large amount of capital required to buy such vast quantities of real estate. We feel
that the most likely strategic option for this industry will be to “maintain” given that exiting would
be very difficult, harvesting would most likely lead to a decline in brand loyalty, and consolidation
12. 12
would require huge risk. However, the maintain strategy relies heavily on the ability of a firm to
build brand loyalty through differentiation which may be difficult to do considering the high
degree of rivalry between the firms. We feel that Target may be able to gain some differentiation
through the use a strategic partnership with La-Z-Boy. We feel that these products will generate
above average revenue per square foot within the firm and there is little risk to either party. The
potential challenge with this will be to change the layout of the Target stores to properly display
the products so that consumers find them appealing.
According to Fortune.com, Target’s new CEO, Brian Cornell, is already moving forward
with product presentation as a way to drive sales. According to the same article Target’s CEO
states that the use of mannequins to showcase clothing, have grown sales by 30%. Because of these
results Target feels that they can implement the same showcasing strategy in their home
department. In the same article Cornell mentions that when a customer enters the store, they simply
see a sea of racks. We couldn’t agree more. Our team went to a local Target and found dusty
merchandise placed apathetically on whatever rack space was available. If Target is to gain an
advantage through a differentiation strategy, they must create a more attractive area within their
stores to showcase their merchandise in a way that customers can visualize what individual items
will look like with others.
4.2 Recommendations
As the department store industry becomes more and more competitive, Target must find a
way to differentiate themselves. Our strategic recommendation is for Target to partner with La-
Z-Boy. “To passionately create customers for life-one comfortable and exceptional experience at
a time.” (La Z Boy, 2016) This is La z Boy’s mission statement and if you refer back to the mission
statement listed for Target you will see a strong commonality in the two. This is especially true
13. 13
when they both mention the importance of an “exceptional experience”. We believe these two
companies would be a great fit for each other due to their similar mission statements. In this
mutually beneficial partnership, Target will display La-Z-Boy products and La-Z-Boy will handle
the storage and delivery of the products. Target has begun to experiment with “showroom style”
departments, and we believe it is in Target’s best interest to build upon this idea.
Upon partnering with La-Z-Boy, Target will display 4-10 recliners and couches in their
home section, fully decorated and on display. There will be iPad’s added to the section so that
customers may search a larger catalog of products, and orders will be shipped through La-Z-Boy’s
delivery services. After speaking with a manager at a local La-Z-Boy store, we have determined
that, assuming a 50/50 profit split, Target will earn roughly $150, on average, in gross profit on
each recliner that is sold. In addition to this, we believe that the merchandise that Target can pair
with the furniture in these showrooms will earn increased sales numbers. The cost to implement
this recommendation will be minimal. La-Z-Boy will benefit from the added sales revenue as well
as the advertising, and Target will differentiate themselves as well as increase sales in their home
division.
The main cost that we have identified will be the clearing of space in order to organize the
showroom. We believe that this cost can be offset by the decrease in cost of inventory that this
partnership will allow for. Due to La-Z-Boy possessing and handling delivery of the actual
products, Target will have less inventory to process in-store which we believe will help lead to
higher returns. Through research at a local Target, we believe that selling 3 La-Z-Boys per week
is a conservative number on average. The income from implementing this idea is calculated to be
roughly $22,000 in profit each year, per store, stemming solely from the sales of La-Z-Boy’s. This
14. 14
results in a favorable revenue per square foot (assuming the section is roughly 6,000 square feet)
and does not take into effect the added sales from other products.
A Target representative stated that home décor sales are not even 2% of total store sales,
and rugs and other home goods are even lower (1.2%). We believe that by consolidating some
of the sections in order to make room for the showroom, Target will be able to drop costs
associated with maintaining the respective department for these items while simultaneously
increasing sales through the showroom method. We have determined a NPV of roughly
$14,200,000 and an IRR of 89%. The IRR is unusually high due to the minimal startup costs.
The NPV was derived by assuming an average of three recliners sold per week, and that the
recommendation was rolled out to 100 stores. Each year, we assumed that 100 more Target
stores adopted the recommendation, and each store incurred set-up costs of $4000. The return on
investments per year were determined to be as follows: 2.324 in year 1, 5.161 in year 2, 7.565 in
year 3, 9.585 in year 4, and 11.944 in year 5. The return on investment continued to rise due to a
higher initial cost of setup (due to accounting for year number “0”).
In order to better differentiate themselves as well as create a more rewarding customer
shopping experience, Target must implement a partnership with La-Z-Boy. This will solve their
display problems as well as give consumers a larger selection of items to purchase. In addition,
the gross margin on recliners (roughly 30%), is on par with store average for most items.
4.3 Fallout
In any business recommendation there are potential risks involved, however many times
the reward is great. A potential risk associated with implementing the showroom of La-Z-Boys
would be clearing space in order to create the showroom. We believe we can minimize this risk by
the offset of low cost inventory associated with this partnership by targeting the store divisions
15. 15
with the lower percentages of sales. Potential risk arises in negotiating the financial splits when
selling the furniture pieces. Upon consulting with the La-Z-Boy manager he felt that a 50/50 split
on profits was feasible.
If our recommendation is fulfilled by Target, some of the firm’s competitors will be
impacted by loss of market share, as Target becomes more differentiated in the industry. As a
result, competitors may try to imitate Target’s showrooming concept, but it could be unfavorable
as Target would have already partnered with La-Z-Boy and other manufacturers to increase their
home goods division, gaining an advantage.
An additional problem that Target could potentially face if partnering with La-Z-Boy, is a
decrease in margin, currently at about 30%. If La-Z-Boy suffers from any unforeseen supply chain
issues, it could result in a lower margin on the products that Target will be selling. If the margin
drops below the desired level and the minimum cost per square foot is not being reached, then
partnering with La-Z-Boy could then become unprofitable for Target. This may result in Target
wanting to end the business relationship with La-Z-Boy and repurposing the lost display area with
other potential manufacturers with more desirable margins.
5. Conclusion
Overall, based on our entire analysis it was found that Target was the most competitive
firm in the industry although they did not sustain competitive advantage due to a fluke year in
2014 caused by a data breach. Even with a strong recovery in 2015 Target still has some major
hurdles to jump through. In our 5 Forces analysis, it was found that the Rivalry Among
Competitors is the highest among all forces. To improve the Rivalry Among Competitors, Target
needs to differentiate themselves more so than they have. Our recommendation is to partner La-Z-
Boy and Target to sell recliners which will help differentiate them among their competitors. Due
16. 16
to the extremely low risk of this partnership to both companies and the financials to back it up, we
are confident as ASI consultants that this recommendation, if followed through, will improve
Target holistically to their full potential.
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Appendix