|Type of paper:||Essay|
|Categories:||Management Human resources Analysis Walmart|
Human resource management definition
Step 1: Research
The articles that converse the competition between target and Walmart:
The article highlights what is happening between Target and Walmart in the market through the clarification of the one that stands up over the other in compaction from various aspects comprising of their SWOT. I will use the article to elaborate the strengths, weaknesses, opportunities and threats that the two firms face in comparison to what each of them has and is still doing to get ahead of competition.
The article covers the competition between Target and Walmart by comparing the significant aspects of business operation that can be shown through SWOT analysis. The two companies are ranked the top performers in the retail market with Walmart coming in at first place. Both of them still face threats and have various weaknesses. The article also shows various strengths, especially regarding its revenue and workforce. These are the significant parts of the paper that will be used to analyze the company’s SWOT analysis.
Step 2: Strengths
The greatest strength that Walmart has over Target is its revenue, which is directly associated with its number of stores. The firm operates over 10,700 stores across the globe with its total assets being five times larger than Target’s. Walmart generates more than $240 billion in market capitalization compared to Target’s $79 billion. Target’s strength lies in its venture into the social media marketing and equality. By capitalizing on internet marketing through the social media enhances its sales and its growth. Target has also an advantage over Walmart in terms of profitability.
Step 3: Weaknesses
Despite its size, Walmart faces a great weakness in its profitability. Due to the activities incurred to put products in the market at the affordable price, its profitability with respect to its gross profit margin and -net profit margins are low when compared to Target. The firm is also weak with regards to equality and social media marketing.
Step 4: Opportunities
Both firms have a great opportunity to grow. This growth is not based on their remarkable brick-and-mortar footprints, but rather the opportunity to embrace the digitalized business world. The sales at Target and Walmart have been declining due to the fact that most people are turning to online shopping. Walmart has already slowed its pace down with regard to opening of new stores. The internet provides great opportunities for growth through the available B2B, B2C, and C2C platforms through which consumers and suppliers can be reached.
Step 5: Threats
With the online platforms and digitalized technology that enables the two firms to grow, they pose a great threat to the existing business model. Both Walmart and Target have a significant number of brick-and-mortar stores that are at risk as the consumers are turning to online shopping. The business world is currently creating its base on e-commerce, which is the future of the global economy. The firms have to change their business models or lose its customer base to those that embrace the technology.
Step 6: Who Will Come Out Ahead?
From the SWOT analysis, Target is most likely going to come out ahead of Walmart. The latter may be the retail giant with a size which is five times as big as Target (its primary competitor), but has a great weakness and much to lose from the threat. Walmart also appears to be more efficient in business operations than its competitor (shown by its huge asset and inventory turnover) and revenue generation. However, when comparing the two firms from a financial standpoint, Target is more profitable than Walmart. The long price strategy that Walmart uses lowers both its gross and net profit margin which is the main feature of its low price tactic. The shift to online business model can greatly affect Walmart due to its huge investment in the current business structure and model.
Step 7: Real-World Application
• The company has a well-established consumer base and reputation in retail industry as it comes second to Walmart.
• It covers a very huge space across the U.S. and has a huge market share
• The firm has a satisfactory profit margin (Barwise).
• Target focusses too much in local market (in the U.S.) and neglects international market. It has very minimum international presence which is insignificant
• The popularity of the brand is relatively very low when compared to its competitors.
• The firm needs to focus on the reduction of operational costs in order to increase on its revenue ratios.
• The firm can also consider taking on the private labeled products in order to enhance its commendably since they are more focused on the consumers (Barwise).
• Inflation poses a threat threat as it forces consumers to cheaper goods thus neglecting the quality offered by other goods.
• The tough competition from Walmart and K-Mart pose a great threat to its very existence as they sell the same products at more consumer-friendly prices (Barwise).
Barwise, Patrick (August, 2016). "Bullseye: Target’s Cheap Chic Strategy – HBS Working Knowledge". Hbswk.hbs.edu.
Elvin Mirzayev, FRM. "Target Vs. Walmart: Who's Winning The Big Box War? Investopedia, (2017). Retrieved from: http://www.investopedia.com/articles/active-trading/070715/target-vs-walmart-whos-winning-big-box-war.asp. Accessed on 15 Sept 2017.
Trainer, David. "Forbes Welcome." Forbes.Com, 2017. Retrieved from: https://www.forbes.com/sites/greatspeculations/2017/01/25/target-looking-better-than-wal-mart-for-investors/#4fa487ab42bb. Accessed on 15 Sept 2017.
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