When Target delivers products and services at a low cost, which from economies of scales is considered as a competitive advantage, they are able to beat their rivals on price, and at the same time, have a higher profit margin while doing so. In addition, the new entrants require larger investing of their financial resources to be able to enter and compete in this industry. Without proper logistics, the marketing skills, the infrastructure, and the service, companies won’t last. For instance, take Target’s exit of the Canadian market in 2015. Furthermore, Target Corp. businesses becomes heavily reliant on technology investment to support multichannel efforts and transform information processes and computer systems more efficiently and run the business and remain competitive.
Target believe that when the employees have their finance in order they can focus in the things that really in the job. Target Corporation missions don’t stop only with its employees and their working conditions and wellbeing but it goals and missions expand insides the communities. Target is also present in the communities, they claim to be concerned by the people who live in those communities, and support them in different
Target Corporation needs to buy more local and diverse product from an environmentally friendly company and create a standard that adds value to the local communities and environment. In addition, Target Corporation should source products from diverse international community, minority organization, and women run organizations. Target Corporation must diversify its retail products to add more goods that are sporting, a bakery, and household's items as well educational services using partner organizations. Target Corporation needs to identify new third-party strategic alliances through which it delivers goods at the doorsteps, selecting with a non-perishable item and eventually perishable items depending on the locations. Target Corporation
Competitive advantage of a firm is the edge that it has over its competitors (Altharti 2012).It is important to state that competitive advantage (CA) cannot be achieved without a business strategy or business model. It is the business strategy, which is the management game plan for creating value for stakeholders and earning a reasonable return on investment that gives a company a competitive advantage over rivals in terms of higher financial performance on revenue, return on investment etc. The author accepts that Porter’s generic strategy and value chain are important tools in understanding the competitive strategies being deployed by rivals in any industry analysis. An understanding of the generic strategies such as the broad low cost provider, broad differentiation strategy, and narrow focus strategies on cost and differentiation being deployed by competitors can provide opportunities for existing and potential competitors by trying to achieve a lower cost or better differentiation by rivals. The value chain is an internal analysis of how an organization organizes
2.3.1 Definition of competition Success or failure of a new product is determined by the actions of the company. All companies in any industry operate in environmental, process, managerial, and financial challenges .Some companies have a reputation for being aggressive in the marketplace and attack a new competitor quickly while others take a less-aggressive approach. Companies seek to identify competitors based on strategic forces to discover sources of competitive advantage. Companies seek to identify opportunities and create unique products that allow a price premium. Discovering the competition through the customer’s eyes expands a company’s knowledge and understanding of the customers and the competition.
Competitive advantage is a term used in the business warzone between commonly large companies that compete to obtain the highest costumer population for their business fields. Competitive advantage is literally an advantage that a company or an organization possesses which enables it to shine brighter than the other competitors in the competition; it is what makes your business unique in comparison to the others. The question now is how? How can you acquire a competitive advantage in the global market? To answer this question, you must first be familiar with three major determinants of acquiring competitive advantage: what to produce, for whom, and with whom you are competing.
Customers pay for value, and offering prices, lower than competitors, for the same benefits or creating unique benefits for higher price, creates superior value. A company implementing a strategy for creating value, different from competitor’s strategies, has a competitive advantage. (Barney,1991), thus, giving Amazon, a strong chance against its competitors. Petaraf and Barney (2003), stated that when a company creates greater economic value, it has an advantage over its competitors. Economic value is the difference of the perceived benefits received by the customers from the company’s economic cost.
2.1.3 Combining the two approaches Both ways of running a business have their limitations. By following the type E approach, it is hard to create a sustainable competitive advantage because of the focus on short-term results. Using the type O approach makes it hard to significantly increase the economic value of a company. Expanding the shareholder value whilst creating a transparent and reliable culture is very difficult . However, because of the difficulty, the chance of having a sustainable competitive advantage will be much higher.
Organizational culture is seen to be one of the crucial components that stand out and contribute positively towards sustaining performance, and competitive advantage. Culture is perceived to be a powerful took that can create and sustain performance but only a few leaders within an organization give it the attention it deserves (Madu). With an increased amount of competition in a globalized world, companies have found the need to differentiate themselves (Mahrokian Sossie, 2010). These differentiating factors have allowed companies to thrive and sustain a competitive advantage. The organizational culture which is considered to be a major source of competitive advantage can be defined as a system of shared assumptions, values, and beliefs which