Strategic Management: Analysis of Target Australia's Strategies

This report provides a detailed strategic management analysis of Target Australia, a leading departmental store in Australia. It begins with an executive summary and table of contents, followed by an introduction to the competitive landscape. The report examines the market size, trends, and segmentation within the Australian departmental store industry, including an overview of Target's competitors and distribution channels. Financial and corporate performance is assessed, including a balance scorecard. A comprehensive SWOT analysis identifies the company's strengths, weaknesses, opportunities, and threats, along with its competitive advantages. Strategic options and possible recommendations are presented to enhance Target's market position and address challenges. The report concludes with a summary of findings and references, offering a valuable resource for understanding Target Australia's strategic management approach.

Running Head: STRATEGIC MANAGEMENT
Strategic management
May 12
2018
Target Australia

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Executive summary
This is the world of competition and everyone has their respective competitors. Target
Australia is one of the leading companies operating in Australian in departmental store
industry. Target Australia has to compete with its rivals to sustain its market position with
these competitors. In this order Target Australia need some strategic management. Strategic
management is a process of systematic analysis of the current scenario and planning for
strategies and their implementation. This report consist analysis of Australia market for
Departmental store industry and SWOT analysis of the company. This analysis helps in
making new strategies for the business growth. In this report there is also an analysis of
strategy possibilities according to company’s growth rate and competitive advantages.

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Table of Contents
Introduction................................................................................................................................3
Market size and trends...............................................................................................................3
Market size.............................................................................................................................3
Competitors............................................................................................................................4
Market trends and segmentations...........................................................................................4
Distribution channels.............................................................................................................5
Financial and corporate performance.........................................................................................5
Balance scorecard...................................................................................................................5
SWOT and competitive advantages...........................................................................................6
Strengths.................................................................................................................................7
Weaknesses............................................................................................................................7
Opportunities..........................................................................................................................8
Threats....................................................................................................................................8
Capabilities.............................................................................................................................8
Competitive advantages.........................................................................................................8
Strategic options.........................................................................................................................9
Possible recommendations.........................................................................................................9
Conclusion..................................................................................................................................9
References................................................................................................................................11

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Introduction
In the era of competitiveness there is high demand for businesses to come up with new
ideas, services or products in the market. In this era if the companies do not upgrade their
services or products, these would become unattractive and will results in closing down the
company. if the business organization is genuinely interested in running their business as long
as possible, then it is essential to realize the importance of innovations and marketing
strategies to maintain their competitive position in the market. These marketing strategies
include the formation and implementation of the desired planning to achieve the goals of
competence and growth of company in order to sustain the market position of company. This
report contains a brief analysis of these marketing strategies with the internal capabilities of
“Target”. This report also includes SWOT analysis of the company.
Market size and trends
Market size
Australian department store industry has struggled in last five years. This struggle was
due to weak retail environment in the industry and some negative sentiments of the
consumers. These sentiments dragged the industry in this struggling period. It is expected to
fall the industry revenue at an annualised 0.9% over five years. Industry revenues through the
fiscal year of 2017-18 expected to $18.3 billion (IBIS World, 2018). Target is operating more
than 300 stores across the nation as well as has an online business. In the industry Target
employs more than 14,000 team members across its support offices, stores and sourcing
outpoints in Asia.

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Competitors
In this industry, Kmart is leading the industry in terms of percentage shoppers with
23.1% shoppers alone and other rival of Target is “Big W” which comes third just after
Target having 20.5% shoppers of the industry (Mortimer, 2016). In this segment of
approaching the new customers to compete with Kmart, Target is facing some issue in
ensuring a safe environment for its customers and team members. In terms of percentage of
dollar share by other rivals of Target, Myer is leading the industry with 8.3% market share
and Target comes at second place followed by the Kmart and Big w respectively (Morgan,
2015). In market share Mayer is the only competitor for Target. Target is facing some issues
related to efficient use of its natural resources.
Market trends and segmentations
In recent years considering overall scenario, spending of fashion retail in Australian
market has increased by 17% in online and 5.7% in-store year-on-year (Roberts, 2016).
Company is showing its growth rate in different segments according to the market
requirements and following the trend for respective segment as shown below
Figure 1 Source from https://www.americanexpress.com/au/content/merchant/pdf/business-insights/industry-trend-
report-australian-fashion-retail.pdf

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Distribution channels
Target Australia works with a multi-channel distribution supply chain system. In this practice
company follow multiple steps as offshore manufacturing and consolidation, pick and
packaging, goods on hangers, replenishment DC’s and then direct to the store.
Financial and corporate performance
In the updated report for the first half of 2017, Wesfarmers mentioned that the overall
performance of Target in this difficult trading period is reflecting its significant business. In
this period company has experienced a 17.4% decline in its sales and also decreases in
earnings before interest and tax (EBIT) of 78.4% to $16 million. During this period,
company’s buying and inventory programmes were completely reset which had a direct
impact on business when company got its seasonal clothing stock for the past six months
(Koehn, 2017).
Balance scorecard
Financial  8.3% of total industry market share
 $18.3 billion revenue expected for 2017-18 financial
year
 Productivity boosting target is set to increase by 20%
Customer  20.5% shoppers of the industry
 2nd highest customer holding company
 In order to remove loss making items company has
reduced its product range from 100,000 to 70,000

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Internal process  Diversity of the people is main priority of Target
 Target is continuously focusing on a transparent and
an ethical supply chain.
 Company is trying to deliver quality products to its
customers
 Company is seeking proposals from recycling
providers and waste collectors to reduce its waste
stream
Learning and
growth
 Company is providing on job training to its employees
for better response to their customers.
 Company prefers prime locations for its new outlets.
SWOT and competitive advantages
Whenever innovation or new product is introduced it has various effects on the overall
business of the organization. It may impact the business to strengthen or may have weakness
to decline the growth rate. This innovation or product can provide opportunities or may have
threats too (Dalal, Sonia, Yogita, & Malik, 2015). Therefore, a SWOT analysis is required to
identify its Strengths, Weaknesses, Opportunities, and Threats it may have.

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Strengths
Market recognition- Target Australia is a well-established organization operating in stores
nationwide and also listed in online shopping market.
Market share- Company has a high market share and stands at 2nd position in market share
holders list of the industry.
Change in Fashion- Fashion is upgrading very frequently which increases scope for new
products
Weaknesses
Ability to control stock on hold: In the past few years company is facing stock management
issues which weaken the success of new products (Wesfarmer, Target, 2017).
Mismanagement of natural resources: Company is facing a major problem of
mismanagement in utilising its natural resources available to the organization.
Strengths Weaknesses
Opportunities Threats

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Opportunities
Market growth: Australian market is showing a continuous growth in departmental store
industry which is a plus point for Target to introduce new products and innovate its strategies
as well.
Occasional Offers: Company has an opportunity to offer discounts on some occasions to
strengthen company’s relationship with its existing customers and attracting new customers.
Threats
Market competition: In the industry company has a tough competition with its rivals in
terms of number of customers as well as in terms of its market share.
Customer demands: Today customers demanding for more in terms of products as well as
services. Introduction of new product may be associated with a requirement of new service
and customers need to be satisfied for their requirements.
Capabilities
With this analysis it is observed that the company has a capability to compete with Myer to
achieve first place in the market share holders list. Also company has a wide network stores
across the country that can help to maximize the number of customers to compete with Kmart
leader in terms of number of shoppers (Low, 2016).
Competitive advantages
In order to sustain in the competitive market target has some competitive advantage like:
 Company has reset the marketing spend
 Focused on developing customer relation to lead the culture so over the time period
 Company is continuing the involvement of marketing mix to ensure the effectiveness
of their investments (Cameron, 2017).

STRATEGIC MANAGEMENT 9
Strategic options
Company is struggling in managing its natural resources and stock holding problems. There
are some other problems company is dealing with like safety and quality of products etc.
therefore, company can make some innovative strategies to overcome these problems. Since
company is ranked low for low average spending of per customer, it can make new strategies
to improve this spending. For this change company can provide some additional discounts
and attractive offers on selected brands to increase the sale for per customer. This increment
in purchasing of per customer will ultimately improve its average spending of per customer.
This strategy can help the company to increase its overall sales resulting in higher growth and
high revenue generation (Wesfarmer, 2017-18 priorities, 2017).
Possible recommendations
Analysis of the company is demanding for some efficient strategies. Although company is
performing well in terms of sales and growth but in order to sustain in such competitive
market it has to implement some innovative strategies. It is recommended to the company to
provide on job training to its employees and improve their stock management so that
company can overcome the burden of out of fashion stock. Company is working on
reformation in the recent time so this reformation must be according to the market trends so
that it would benefit both the management and company.
Conclusion
In the last after this SWOT analysis it can be concluded that company is performing well but
it needs to reform its structure in order to compete with its rivals. Company has a tough
competition which requires some major changes in their strategies. Analysis of market size
and trends shows that company can improve its growth rate and annual turnover, and

STRATEGIC MANAGEMENT 10
financial and corporate analysis reflects that company has the potential to achieve this. This
analysis reflects that company is capable of achieving big targets and is improving its gwoth
rate continuously.

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References
Cameron, N. (2017). Taarget CEO: We Want Brand Love with Mass Reach. Retrieved from
CMO: https://www.cmo.com.au/article/620333/target-ceo-we-want-brand-love-mass-
reach/
Dalal, G., Sonia, Yogita, & Malik, S. (2015). Online Marketing: A SWOT Analysis. The
International Journal of Business and Management, 3(7), 12-16.
IBIS World. (2018). Department Stores - Australia Market Research Report. IBIS World.
Retrieved from https://www.ibisworld.com.au/industry-trends/market-research-
reports/retail-trade/other-store-based-retailing/department-stores.html
Koehn, E. (2017). What's Happening at Target? Revenue's Fallinf, but Experts say
Turrnarounds Take Time. Retrieved from Smart Comnpany:
https://www.smartcompany.com.au/industries/retail/whats-happening-target-
revenues-falling-experts-say-turnarounds-take-time/
Low, C. (2016). International Brands Target Australia's Unsaturated Consumer Market:
Deloitte. Retrieved from The Sydney Morning Therald:
https://www.smh.com.au/business/companies/international-brands-target-australias-
unsaturated-consumer-market-deloitte-20160120-gm9rli.html
Morgan, R. (2015). Retail Perspectives: Different Ways of Rating Australia’s Clothing
Stores. Roy Morgan. Retrieved from http://www.roymorgan.com/findings/6396-
retail-perspectives-different-ways-of-rating-australias-clothing-stores-201508172306
Mortimer, G. (2016). Hoe Kmart Ate Target: A Story of Retail Cannibalism. ABC NEWS.
Retrieved from http://www.abc.net.au/news/2016-05-31/kmart-ate-target-story-retail-

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cannibalism/7461564
Roberts, E. (2016). Australia Fashion Retail Shows a Strong Season of Growth. Sydney:
American Express Australia Limited. Retrieved from
https://www.americanexpress.com/au/content/merchant/pdf/business-insights/
industry-trend-report-australian-fashion-retail.pdf
Wesfarmer. (2017). 2017-18 priorities. Retrieved from Wesfarmer:
https://sustainability.wesfarmers.com.au/our-businesses/department-stores/target/
2017-18-priorities/
Wesfarmer. (2017). Target. Retrieved from Wesfarmer:
https://sustainability.wesfarmers.com.au/our-businesses/department-stores/target/