Question

COMPETITION – MARKET RESEARCH

Conduct a SWOT analysis about Target and Walmart. Based on your SWOT analysis, do think that Target or Walmart is better positioned over the long term to come out ahead? Why?

Answer 1

Target Market -

Strengths - 1. Target has a strong presence in US. It can leverage economies of scale to sell at lower prices.

2. They offer products which are stylish and affordable. Low prices gives them a competitive advantage.

3. Schemes such as 'Low Price Promise' and 'Expect more, pay less' are the value addition for the customers.

4. Loyalty program of Target Stores is a huge success.

Weakness -

1. Data Breach in 2013 has led customers to lose trust on the Target stores.

2. Target usually get supplies from different suppliers from foreign countries. Hence, Political and Economic situations may arise.

3. There is a very little presence in the international market.

Opportunity -

1. Target has the opportunity to expand in many densely populated cities in US.

2. Acquisition of Shipt provides an opportunity of giving same day delivery to the customers.

3. Target can create and expand its own private label brands in the market.

Threats -

1. Walmart, Costco, Kroger and Home Depot are some of the major competitors. Along with these, there are many local competitors too.

2. The business in retail needs high capital to get established, however, it is easier to replicate the business model hence, barriers to entry are low.

3. Economic Downfall or the turbulence in the US economy can easily lead Target to the downfall.

WALMART-

Strengths - 1. Walmart has a heavy brand recognition in the market. It is known as the most recognized retail brand in the world.

2. Walmart has always looked into the global expansion such as acquisition of Flipkart and Bharti retail stores.

3. "Everyday Low-Price Strategy" of Walmart is the result of economies of scale for the brand.

4. Walmart has strong market power over suppliers and competitors because it is the most trusted brand by the customers.

Weakness -

1. The business model of the retail stores can be easily replicated and Walmart is no exception.

2. Gender Discrimination cases against Walmart has created a bad brand image.

3. There are very thin profit margins since, the prices are low.

Opportunities -

1. Walmart can expand its operations globally in many other countries where there is no presence of Walmart.

2. Low cost some time leads to low quality. Hence, maintaining quality standards should be priority.

3. Walmart can create strategic Alliances with many global brands and start investing globally.

Threats -

1. Walmart was sued for selling fake craft Beer in 2017 and such allegations can prove out to be threats for the brand.

2. Walmart is the brand which is the primary target of all other competitors in the market.

3. Political and Legal affairs pose a threat to the business.

4. Small scale e-commerce companies are earning much and stealing the market share from Walmart.

As per the SWOT analysis, Walmart appears to be better positioned in the market.

Explanation - The reasons are listed below:

1. Walmart is obviously a more trusted brand by customers.

2. Walmart sells products on lower prices than target, however, this leads to low profit margin.

3. Walmart has presence in global markets too.

4. Walmart is working with many small companies for diversifying their portfolio.

5. Walmart poses a serious threat to the new entrants because of its high capital investments.