External Factor Analysis & Essay

STRENGTHS

· The company enjoys the loyalty and respect of the brand by their customers. Brand loyalty ensures that the long term success of the company through huge amounts of sales.

· The company has also good customer relationship in comparison to one of its greatest competitors. The company’s greatest competitor is Walmart and many customers have shown hostility and resentment towards the company. The good relationship ensures the company’s brand loyalty.

· Target Company provides a fun shop which is much different from the competitor’s environment. The company provides the customers with good enjoyable shopping experience.

· The Target Company has strength in its marketing that contributes to very high profitability from its segments.

· The company has also been able to cater to the needs of the young. These is by being the fashionable option.

· The company has also been able to target the middle class. This is different from the competitors who are considered to provide their products to low end consumers and thus the high end consumers consider them distasteful.

· The company has a cardholder discount program that offers 5 percent to the holders of their cards. This is a great marketing strategy that has allowed the company to make good sales.

· The company has online website that provides a variety of products for the customers.

WEAKNESSES

· The company has a business model that is based on having big stores such as on supercenters. The customers who are found in the small neighborhood however prefer the convenience of a small stores in their neighborhood.

· The company has not been willing to make changes and in 2015, they opened 8 smaller stores. Their competitors on the other hand that is Walmart opened 270 to 300 within the same time period.

· The company has also not invested in the online market. Their competitors on the other hand such as Walmart and Amazon have established themselves in the online market. The company should increase their participation in the online market.

· The company has also not diversified. The company has not ventured into other market such as the online market and wide range of retail stores and thus the risks associated with the company and can therefore is vulnerable to economic downturns.

· The company has been failing to take its opportunities. Some of the opportunities include opening up stores at the filling stations. Walmart and Kroger which are competitors for the company have very many stores in filling stations.

· The company also has not diversified into the rest of the world. The company has only established its stores in the United States and not any other part of the world (PEST Analysis Contributor, 2015).

OPPORTUNITIES

· The company’s established brand in the retailing of fashion items and there are many people who would be willing to purchase their products online.

· The company is a discount store. There have been a decrease in the income of the middle-class. People will most likely buy more from discount store as a result.

· The company should open up smaller neighborhood stores and online market. These new sales channels provide a way to increase the sales. This include enabling same day delivery on their online website. The company has the opportunity of increasing its sales volume (Haseeb, 2015).

· The company provides an urban brand. Most of the youth prefer having fashionable items and thus the company can provide for the youth. The urban market has been increasing and thus the company has an opportunity of increasing its sales volume.

· The company’s hip brand attracts the millennial. These are the people who were born in the 2000s. The millennials have adopted an urban lifestyle and have very little disposable income that make them suitable for discount stores. Their parents on the other hand have more income and thus may not be willing to shop at discount stores.

THREATS

· The buying power of the American population has been decreasing over the years. This reduces the amount of products that the population can buy. The company’s profitability is therefore bound to decrease.

· There have also been an increase in the discount stores. There are some new competitors such as Dollar general which has over 12,198 stores. Some of these companies offer lower prices and thus is a threat. Increase in competition decreases the volume of sales for the company as well as its profitability.

· The competitors who are online based are also a risk to the company. They enable the customers to shop from the comfort of their homes. The customers do not have to leave their homes as they make their purchase and wait for the delivery sometime on the same day.

· There are competitors who have better online presence in comparison to the company. This include Amazon. These companies therefore have a competitive advantage.

· Kroger Inc. has become a big competitor to the company. Kroger Inc. has opened many market places in superstores such as Target. Target Inc. can undercut the company.

· Walmart is also a competitor. The company has been targeting target in its operations.

· Most of the millennials also prefer to shop online and yet they have not established themselves well.