Analysis of the market forces affecting Target is crucial in determining the type of industry where the Corporation operates. Considering the number of businesses in the retail industry, Target has very strong competitors. Another factor is the purchasing abilities of consumers. The state of the economy meant that consumers were not able to pay as much as they did in the earlier years (Palepu, Srinivasan, & Weber, 2009, p. 25). This implies that the consumers had a low purchasing power. The competitive pricing policy of the industry is also an indicator of the structure. Target and Walmart control a huge chunk of the market share even though other smaller retailers are available to offer completion. Product differentiation to influence price is another characteristic of the industry. Due to the strong competition and differentiation of products, the industry has the characteristics of a monopolistic market.
Target has a unique business model that is unexpected for a market with stiff competition like the retail business. Unlike Walmart which is concerned with selling their products at the lowest prices, Target provides products that are wired to the customer’s needs. Thus, they can stay ahead of their competitors by offering designer products. Additionally, Target's corporate strategy is focused on the home market while Walmart controls several overseas outlets.
Delegate your assignment to our experts and they will do the rest.
The demands for changes by Ackman lack justification given the state of the economy. Ackman’s claim that the company lacks directors with CEO-level experience contradict the earlier trust that he had placed on the company’s management (Palepu, Srinivasan, & Weber, 2009, p. 36). Again, Ackman’s claim of lack of shareholder representation most likely emanates from his short-term ambitions. Given target’s track record, the Corporation has adequate strategies to carry it through the industry.
References
Palepu, K., Srinivasan, S., & Weber, J. (2009). Target Corporation: Ackman Versus the Board. Business Analysis and Valuation Applications , 25-54.
