Economic Social and Environmental Value Memo

Economic Social and Environmental Value Memo

To: CEO Target Corporation

From: Mia N.

Date: 11/08/2023

Subject: Strategic Recommendations for Target Corporation

 Executive Summary

This memo covers essential strategic recommendations that Target Corporation should consider in its strategic planning. In addressing the strategic direction of the company, the strengths and weaknesses of the company are evaluated with a recommendation regarding how to convert weaknesses into strengths. Second, the memo will summarize the findings on Porter’s five forces. Third, the analysis summary regarding the diamond of national advantage for the company to consider in expanding to France is provided. Fourth, the memo will evaluate the firm’s analysis as a learning organization. In conclusion, the memo will provide recommendations regarding the overall coursework that Target Corporation should consider incorporating into its activities to improve its success.

Strengths and Weaknesses

Strengths

First, Target Corporation has strong branding and marketing, which has helped it establish a unique and recognizable identity in the retail industry. Second, the company has effective strategic partnerships with well-known brands and designers such as Missoni, Lilly Pulitzer, and Hunter (Mayer, 2021). Third, Target Corporation has successful multichannel retailing with the investment in e-commerce and efficient delivery options, allowing it to meet changing consumer preferences and compete effectively in digital retail. Lastly, the company has effective data-driven decision-making, which helps Target understand customer behaviour.

Weaknesses

Target’s business model heavily relies on traditional brick-and-mortar stores. In an increasingly digital age, this leaves the company vulnerable to competition from online retailers and limits its ability to tap into the growing e-commerce market. Another weakness relates to market competition. Target faces fierce competition from competitors, including Walmart, Amazon, and other big-box retailers. While Target has a significant presence in the United States, its operations are primarily concentrated in North America. This regional focus exposes the company to economic fluctuations and specific market risks, hindering potential global expansion opportunities. Lastly, labour relations and unionization efforts present a weakness to the company.

Recommendation to Convert Weaknesses into Strengths

Target Corporation should implement strategic initiatives that embrace the changing retail industry to turn its weaknesses into strengths. Target should increase its e-commerce efforts and improve its online shopping experience to reduce its dependency on physical stores. Target can bridge the gap between physical and online retail by utilizing its successful multichannel strategy and investing in cutting-edge technology, resulting in a smooth customer shopping experience. The company should also diversify its geographic footprint outside North America to access new markets and lessen its sensitivity to regional economic fluctuations. Target should prioritize satisfaction with work by offering competitive salaries, benefits, and opportunities for career advancement to address labour difficulties, promote healthy labour relations, and actively involve its staff.

Porter’s Five Forces Analysis

The threat of new retail entrants is high. While there are considerable obstacles to entry in the retail business, such as the requirement for significant financial investment, established supply chain networks, and brand recognition, there are still chances for new players, particularly in the internet realm (Alkhurshan & Rjoub, 2020). The power of buyers in the retail industry is high. Consumers can access vast information and numerous options, enabling them to compare prices and switch brands easily. Low switching costs and the prevalence of price-comparison apps further empower buyers to demand competitive prices and high-quality products. Target’s power of suppliers is moderate. As a large retailer, Target possesses some leverage in supplier negotiations, enabling it to secure competitive pricing and favourable terms. The power of substitutes for Target is medium. The retail industry faces constant competition from online retailers, specialty stores, and discount stores offering similar products and convenience. Lastly, the rivalry among competitors in the retail industry is high. Target faces fierce competition from other major retailers and niche players in various product categories.

The Diamond of National Advantage Analysis

The diamond of national advantage for France is considered a potential destination for Target operations. Four aspects are considered in the analysis. They include industry rivalry, demand conditions, related and supporting industries, and factor endowments. Regarding industry rivalry, the retail sector in France is fiercely competitive due to the saturation of numerous retail stores and diverse customer preferences. Regarding demand conditions, France has a diverse income distribution that affects consumer spending patterns and demands. Additionally, cultural factors strongly influence purchasing behaviour among French consumers. E-commerce is experiencing rapid growth, reflecting consumer behavior shifting towards online shopping (Delage et al., 2020). On the part of related and supporting industries, the retail sector in France benefits from a potential for solid supplier networks with local suppliers. The country’s supportive infrastructure, including convenient payment and financial services, contributes to the retail ecosystem’s efficiency. On the last aspect of factor endowments, France offers a conducive environment for businesses with its skilled workforce and well-developed infrastructure. The government provides support through incentives, encouraging economic growth and investment.

Target Inc. as a Learning Organization

Target has worked on its way to becoming a learning organization. The company qualifies as a learning organization when external environmental factors are considered alongside external factors. From the two aspects, it is established that sustainable retail operations and employee empowerment can help grow as a learning organization. Therefore, working on this as a learning opportunity can take the organization to another level. From its vast resources, it can invest in research and development to become a learning organization on the identified dimensions.

Strategic Recommendations

Target Corporation should first pursue the opportunity to add economic value. The recommendation is influenced by the fact that achieving opportunities of economic value can make it possible to pursue other opportunities, such as environmental and social values. Essentially, pursuing opportunities on the economic front will enhance the financial position of Target Corporation. Notably, this strategy should be pursued by expanding operations to France as many opportunities are identified. Further, it is recommended that Target focuses on sustainable retail operations and employee empowerment to become a learning organization.

References

Alkhurshan, M., & Rjoub, H. (2020). The scope of an integrated analysis of trust switching barriers, customer satisfaction, and loyalty. Journal of Competitiveness, 12(2), 5.

Delage, M., Baudet-Michel, S., Fol, S., Buhnik, S., Commenges, H., & Vallée, J. (2020). Retail decline in France’s small and medium-sized cities over four decades. Evidence from a multi-level analysis. Cities, 104, 102790.

Mayer, C. (2021). The future of the corporation and the economics of purpose. Journal of Management Studies, 58(3), 887-901.

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**The company for this assignment is the target
Exam Content

Write a 2- to 3-page memo to the CEO of the company you’ve been assessing throughout the course, outlining your plan to create economic, social, and environmental value.

In your memo, include the following items:
An executive summary of the memo
A summary of the organization’s strengths and weaknesses, and recommendations for converting weaknesses into strengths
A summary of your Wk 3 findings on Porter’s Five Forces
A summary of your Wk 4 findings on the Diamond of National Advantage
A summary of your Wk 5 analysis of the firm as a learning organization
Strategic recommendations based on your previous work in this course. Include the opportunity identified in Wk 2, the move into the country identified in Wk 4, and any recommended moves toward being a learning organization. Provide a rationale for each recommendation.