Strategic Analysis: Target's Marketing Approach in China

This report provides a detailed analysis of Target Corporation's potential entry into the Chinese retail market. It begins with an introduction to the global retail sector and Target's mission and vision. A PESTLE analysis examines the political, economic, social, technological, legal, and environmental factors influencing Target's prospects in China. Porter's Five Forces framework assesses the bargaining power of buyers and suppliers, the threat of new entrants and substitutes, and competitive rivalry. The report then delves into industry dynamics and presents a strategic group map. Key resources and core competencies are identified, followed by a VRIO analysis to evaluate the company's competitive advantages. The value chain is examined, and a SWOT analysis highlights strengths, weaknesses, opportunities, and threats. The report concludes with a discussion of Target's generic strategy and recommendations for successful market entry, including examples of diversification and marketing strategies. The report uses relevant references to support its findings and conclusions.

Marketing management

Introduction
• Global retail sector is one of the most varied, price
sensitive and fiercely competitive sectors in the world
• It is expected that by 2023, global retail industry size
will stand at USD 30 Trillion increasing from USD 23
Trillion in 2017 (Ji, Sun and Liu 2014)
• Target Corporation is a leading supermarket chain in
the United States and is having their discount stores
across the country.
• As of now, they are not having global presence and
thus it is a good opportunity to tap the potential
foreign markets

Mission and vision of Target
• The mission statement of Target states about
their objective of providing unique shopping
experience to the customers
• Vision statement states about their goal of
attaining the market leader status

PESTLE analysis
• Political factors
• China is having communist type of political system with having
autocratic government
• Hence, changes in the rapid political scenario is less in China
• Economical factors
• The competition in the retail sector in China is high with the
presence of large number of retail brands
• Customers are also much price sensitive, which might be
challenging for the investing firms in increasing profitability

• Social factors
• The huge population in the country will ensure the
maximum business potentiality for the investing
firms (Arnoldi and Villadsen 2015)
• Chinese customers are also more inclined towards
and homemade brands and thus it is difficult for
the foreign brands to penetrate in this market.

• Technological factors
• In terms of the technological
factors, China is the leading
country in developing advanced
and affordable technologies
• They are also ranked high in the
global innovation index
• Legal factors
• High interference of the
government is a major challenge
for the private business entities.
• Business privacy is less and is
hampered by the stricter legal
rules in the country (Yi 2016)

• Environmental factors
• China is one of leading pollute countries in the world and
thus environmental rules and standards are also more
• It is important for the businesses to comply with the
green policies in the country and following them.

PORTER 5 FORCES
• Bargaining power of the buyers
• Target will face high bargaining power of the
customers in the Chinese market
• This is due to the fact that Chinese customers are
having large options of buying from different retailers

• Bargaining power of the suppliers
• Bargaining power of the suppliers will be moderate
• This is due to the fact that there are number of
suppliers as well as number of retail brands are
available in the market

• Threat of new entrant
• Threat of new entrant is low for in the Chinese market
• The amount of investment to be done by Target in
tapping the entire country cannot be matched by
other new competitors

• Threat of substitutes
• Threat of substitutes is high for Target because of
availability of the same type of retailers in the
Chinese market
• Each of the competing retailers in the market is
offering same sort of products

• Competitive rivalry
• Competitive rivalry is high in the Chinese market
due to the low margin competition
• Each of the competitors is targeting the
customers by means of discounts and offers (Wei,
Lowry and Seedorf 2015)