Target Corporation is one of the largest retailers, with multiple stores in most of the US states. Due to its major market share and popularity among consumers, it is inevitable that the analysts have applied strategies in conformity with the market in which the organization operates. In this paper, Target will be examined from the market standpoint to determine the external environment of the business, its potential for profit, and its opportunities for growth. Namely, the competitors, market size, value, and the total addressable market will be highlighted.
Business Overview
Target is a company specializing in general merchandise retail. It was established over 50 years ago, yet effective market and consumer analysis have facilitated the corporation’s continuous development and expansion (Chen, 2020). As a result, Target has become one of the most effective competitors in this particular sector. The mission of the company is to “help all families discover the joy of everyday life” (Target, 2022). At the same time, the mission of the organization is to provide enjoyable shopping experiences for all Target customers.
Market Analysis
In order for Target’s potential success to be determined, it is essential to consider its external environment. One of the main competitors of the organization is Wal-Mart, which is currently the biggest retailer in the sector with international coverage (Chen, 2020). Among other competitors, Costco, Kroger, and Best Buy can be mentioned. Nonetheless, Target is relatively unique in its approach, which focuses on the experience of each customer, investing in the comfort of shoppers, and modern designs.
In regards to the market size, general merchandise retailers are in a relatively favorable position. Based on relevant statistics, the market has reached a size of more than $2,2 billion in 2021, and it is expected to grow by more than $1 billion in the next four years (Smith, 2022b). This is an excellent opportunity for Target to continue its development and market coverage in the US, as the current conditions are favorable.
Another variable that is to be considered is the market value. Namely, researchers highlight that in the previous year, stores such as Target had sales that amounted to $804 billion (Smith, 2022a). Such a high market value implies the presence of consumers ready to invest in general merchandise retailers. Moreover, the previous variable of market size, in combination with the value, highlights the potential profitability of the segment.
For the total addressable market to be determined, it is vital to consider the market share of Target in the US, which is the only country in which the corporation operates. Current literature mentions the share to be approximately 6,76% (CSI Market, 2022). By considering the market value and the aforementioned share, the total addressable market is more than $54 billion. Thus, the value has generated an understanding of the extensive profit opportunities of the organization.
Recommendations
As it was determined that Target’s main competitor is Wal-Mark, a recommendation would be to continue the current efforts towards expansion and territorial growth. Currently, Target is not the leading retailer in regard to the number of stores. Focusing on market research, analyzing consumer preferences, and having an individualized approach to each new location would allow the corporation to continue opening new profitable stores. Moreover, while the organization’s market share is lower compared to Wal-Mart, it is higher in the department store segment. Thus, investing further in this particular branch would be an efficient way to maximize success.
References
Chen, A. W. (2020). Competitive expansion strategies between retailers: The case of Wal-Mart and Target. The International Review of Retail, Distribution and Consumer Research, 31(1), 59–77. Web.
CSI Market. (2022). Target Corporation. CSIMarket. Web.
Smith, P. (2022a). General Merchandise Store Sales U.S. 2021. Statista. Web.
Smith, P. (2022b). Global Department Stores market size 2026. Statista. Web.
Target. (2022). Target’s purpose and history. Target Corporate. Web.