Target Australia: Internal Analysis, SWOT Analysis, and Market Segmentation

In this document we will discuss about Target Australia and below are the summary points of this document:- Target Australia is a prominent mid-priced department store chain with a wide range of products and a multichannel retail approach. The company focuses on operational plans and strategies for business transformation, including expanding online capabilities and reinvesting in stores. Target's strengths include large-scale operations, differentiated and affordable products, and brand recognition, but it faces weaknesses such as privacy issues and dependence on foreign suppliers. High competition is a threat, but there are opportunities as one of the largest retailers in the US market.

MANAGEMENT

Internal analysis.....................................................................................................................................2
SWOT analysis......................................................................................................................................2
Market segmentation.............................................................................................................................4
External analysis:..................................................................................................................................4
Competitor’s analysis........................................................................................................................4
Macro environment...............................................................................................................................5
PEST analysis....................................................................................................................................5
Executive summary...............................................................................................................................6
References.............................................................................................................................................7

Internal analysis
Target Australia is a mid-priced department chain, which is owned by Wesfarmers. Target
Australia is the largest department store due to its store number, which operates almost 301
stores in the country with 13000 team members who work in its store operations. The
products offer wide range of products that includes cosmetics, electronics, home wares,
fitness, consumer electronics, and clothing. It is renowned as a multichannel retailer who
specialises in supply chain, customer services, finance services, and fashion (IBIS world,
2019). According to Wesfarmers Annual report, 2018, it aims to open more stores with
increasing format of innovation. The company aims to expand the online transactional
capabilities and reinvest in the stores. For business transformation, the company focused on
strategies that has operational plan so that they can undertake initiatives. While looking at the
competitors’ activity and the consumer trends, the company set a clear price strategy and
reset the fashion so that it can differentiate the offers and capture large market.
SWOT analysis
Strengths Weaknesses
 Target has large-scale operations in
Australia and US.
 Target focuses on differentiated
products, which are affordable as
well as stylish (IBIS world, 2019).
 As Wesfarmers is its parent
company, it enjoys a brand
recognition (Aithal, 2016).
 The company has introduced
 Recently, the company has
experienced privacy issues, which
forced it to pay huge cost in
establishing security regulations
(Aithal, 2016).
 The confidential information of the
customers that includes debit and
credit card details was leaked.
 Company is dependent on foreign

REDcard Rewards as its royalty
program so that regular customers
can get discounts while purchasing
from the target store (Aithal, 2016).
suppliers for its merchandises such
as US
 The company exposed to political
and economic risk of supplier`s
country.
Threats Opportunities
High competition- Almost every retail store
in the country offers similar products. For
example- Target offering are almost similar
to the Walmart`s offering hence this leads to
price pressures in market (Aithal, 2016).
E-commerce has threatened Brick and
mortar (physical stores) as the customers
have been decreasing with rapid growth in
E-commerce (Aithal, 2016).
Increasing labour costs in Canada and US is
affecting the overall profitability of the
organisation (IBIS world, 2019).
As target is one of the largest retailer in US
and can look for expansion through locating
the stores especially in dense cities
Target is abled much to grasp the changing
behaviour of the customers, as it has
preferred E-commerce above its physical
stores (Aithal, 2016).
The increasing market for private label
merchandise is a signal of increasing
demand
Some of the competitors of target Australia
that grabs huge market share are Walmart,
Coles, Woolworth, and Aldi.
Moreover, work environment of the company is fast paced, fun, and collaborative that
empowers the team members to set their goals that help them to deliver top quality products
to the Australian families (IBIS world, 2019).

Market segmentation
Demographics- on the bases of age group, the company targets young and middle-aged
people in the existing countries. The company targets those people who buys grocery of the
house.
Geographic- when people live in different geographical areas, the demand for different
products differs according to different geographical area. As the food habits differs from
country to country (Dickson, 2017). For example- In US, the company segments according to
income and gender. The company create offerings to attract women with middle and higher
income level people.
Targeting and positioning
Identifying the proper targeting strategies after determining the segmentation variables is
important to position the brand in the eyes of the customers. Finally evaluating the effect of
each promotional tool used to promote the products through discount vouchers, rebates and
cash discounts. For example- when Youngsters bring their kids at the supermarkets, they are
attracted from the chocolates kept on the cash counters (Dickson, 2017).
In order to target and position in the minds of customers, Target Australia offers discount,
vouchers, rebate, and cash discounts.
External analysis:
Competitor’s analysis
Threat of new entrants- Target Australia works in highly competitive retail environment and
has a huge market share. New entrants can take a chance to enter the market as their ability to
invest. Small supermarkets were never a challenge for established brand like “target.”
Therefore, threat of new entrants is moderate for Target Australia. Most threat is from

established foreign brand, which holds huge capital in order to establish strong presence in
US.
Bargaining power of buyers- With highly competitive environment, which the target faces,
consumers have access to number of choices as per their disposable income on both Web and
brick and motor stores. As consumer, have both traditional e-retailers as well as online e-
retailers this lowers the bargaining power of buyers (CAMERON, 2017).
Bargaining power of suppliers- As target is among the largest retailers in US. Moreover,
because of huge variety of merchandise that is offered on sale, no particular supplier accounts
for more than 5 percent of company`s sales, which further lowers the bargaining power of
suppliers (CAMERON, 2017). Moreover, as target Australia enjoys the brand equity of
Wesfarmers, it enjoys some freedom in negotiating with the suppliers with the high degree of
bargaining power.
Threat of Substitution- As products and services in the departmental store in terms of
electronics and grocery are highly undifferentiated. As there are huge, number of small and
medium retailers, who gives similar products so threat of substitutes is moderate.
Competitive rivalry-With wide variety of goods available, Target faces high competition
from Walmart, Costco Wholesale, whole Foods Market, Kroger and Aldi, and Coles. For
home improvement purpose, retailers such as Home Depot, departmental stores such as Kohl,
Macy and internet retailer such as Amazon, Ebay, and shopclues. These influential names
increase the level of competitive rivalry.
Macro environment
PEST analysis
Political- These factors plays a crucial role in affecting the long-term profitability of Target
Australia. It operates in variety stores in several countries that expose it to distinct types of
political environment. The company`s operation is affected by political stability of the

country, level of corruption, interferences in discount offering, legal, product labelling,
industrial safety rules in the service sector, and several important employee benefits
(Dickson, 2017).
Economic- the company uses nation`s economic factors such as inflation rate, GDP, interest
rate, industry growth rate, saving rate, and personal disposable income affect the profitability
of the target Australia. These factors stand as a competitive advantage for the organisation if
the country in which they are investing have positive attributes on the part of these factors.
Stable economic condition with more personal disposable income will increase the demand of
the customers (Barba, Sanchez, Segui, Darabkhani, & Anthony, 2016).
Social- social culture affects the culture of Target Australia. As different population share
different beliefs and attitude that plays an important role in how marketers will understand its
customers. Social factors such as demographics, dominancy of particular culture in the
nation, education level of the country and also the leisure interests affect the buying
behaviour of the people (Dickson, 2017).
Technological - low speed technologies will lead to loss of opportunities through which a
company can grab huge audience. Whereas, fast disruption of technology may give the
organisation some more time to cope and be profitable (Barba, Sanchez, Segui, Darabkhani,
& Anthony, 2016).
Executive summary
This report brings out a discussion on target Australia and how internal, competitive and
external environment affect the organisation`s profitability. At first, it has a discussed the
product offerings which the organisation provide to the target audience in several countries
due to which it is exposed to various political risks.

References
Aithal, P. S. (2016). Study on ABCD analysis technique for business models, business
strategies, operating concepts & business systems. International Journal in
Management and Social Science, 4(1).
Barba, F. C., Sanchez, G. M. D., Segui, B. S., Darabkhani, H. G., & Anthony, E. J. (2016). A
technical evaluation, performance analysis and risk assessment of multiple novel oxy-
turbine power cycles with complete CO2 capture. Journal of cleaner production, 133,
971-985.
CAMERON, N. (2017). Target CEO: We want brand love with mass reach. Retrieved from:
https://www.cmo.com.au/article/620333/target-ceo-we-want-brand-love-mass-reach/
Dickson, J. (2017). A losing battle for the big brands. Retrieved from:
https://www.insideretail.com.au/news/a-losing-battle-for-the-big-brands-201709
IBIS world, (2019). Department Stores - Australia Market Research Report. Retrieved from:
https://www.ibisworld.com.au/industry-trends/market-research-reports/retail-trade/
other-store-based-retailing/department-stores.html
McCauley, D. (2017). Wesfarmers profits up 13 per cent to $1.6 billion as Bunnings, Kmart
and Officeworks shine. Retrieved from:
https://www.news.com.au/finance/business/retail/wesfarmers-profits-up-13-per-cent-
to-16-billion-as-bunnings-kmart-and-officeworks-shine/news-story/
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Moro Visconti, R. (2016). Healthcare public-private partnerships in Italy: Assessing risk
sharing and governance issues with PESTLE and SWOT analysis. Corporate
Ownership and Control, 13(4).

Target Australia (2018). Our History. Retrieved from:
https://www.target.com.au/company/about-us/our-history
Target Australia, (2018). About Us. Retrieved from:
https://www.target.com.au/company/about-us
Widya Yudha, S., Tjahjono, B., & Kolios, A. (2018). A PESTLE policy mapping and
stakeholder analysis of Indonesia’s fossil fuel energy industry. Energies, 11(5), 1272.