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Business

Porter’s Five Forces – Target Corporation

Porter’s Five Forces – Target Corporation

Industry force Strength Provide a justification for your determination with examples
High Medium Low
The threat of new entrants x The threat of new entrants for Target Corporation is low because it has established itself as one of the leading retail companies in the United States. Therefore, companies intending to compete with Target must achieve economies of scale and set competitive prices to gain a competitive advantage. According to Jackson (2018), economies of scale are the cost advantages firms experience with efficient production and increasing production levels.
Power of buyers x The power of buyers is high because Target Corporation operates in an industry with many substitutes and low switching costs, thus enabling retailers to switch to other retailers whenever they are not satisfied with the quality or price of products offered at Target stores.
Power of suppliers x The bargaining power of Target Corporation suppliers is medium because the company sells its products to various retailers, thus making it easier to shift a supplier. Suppliers are also free to get their products from other retailers in case of a dispute or price change.
Power of substitutes x The power of substitutes for Target Corporation is high because there are many substitutes and differentiated products offered by competitors at different prices. Online shopping has also made it easier for customers to view various related products and substitutes, thus increasing the power of substitutes.
Rivalry among competitors x According to Samli (2015), the retail industry has become highly competitive over the past decade due to the rise of large and small retail stores operating in brick-and-mortar and online stores. Therefore, the rivalry among competitors is high at Target Corporation, thus forcing the company to adopt strategies such as discounts and price reductions to attract customers and maintain a competitive advantage.
Complementors x Complementors have a medium impact on Target Corporation because most of the company’s products are private labels complemented by specific products in the company’s catalog.

References:

Jackson, D. (2018). Profitability, Mechanization, and Economies of Scale. https://doi.org/10.4324/9780429446313

Samli, A. C. (2015). Fitting into multilayered retail competition. Coping with Retail Giants, 27–39. https://doi.org/10.1057/9781137476340_4

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Question 

Porter’s Five Forces - Target Corporation

Porter’s Five Forces – Target Corporation

Complete the table below. For the company, you’ve decided to assess in week 1, determine the strength of each of Porter’s Five Forces and of the complementors.

Justify your determination with examples.

Industry force Strength Provide a justification for your determination with examples
High Medium Low
Example x This is why I believe it is medium.
The threat of new entrants
Power of buyers
Power of suppliers
Power of substitutes
Rivalry among competitors
Complementors
References: