TGT makes sure that these vendors are in line with current labor laws and quality assurance to provide their customers with the best quality products. .
Issues/Challenges.
TGT is faced with a number of challenges as it enters the 21st Century. .
Target Corporation in a saturated retail industry: The retail industry is in the mature stage of the industry life cycle. Although it has been expanding at a constant albeit low rate it is only coinciding with the further expansion of stores across the US and Worldwide along with the consumer cycle. While they have been able to finance their expansions with revenues from subsidiary stores, it has been offset by declining profit margins in those stores. Target has traditionally chosen to compete using a differentiation strategy in the United States. Because of its efforts to provide a higher quality experience with every new trend in merchandise, its source of competitive advantage relies upon differentiation rather than low cost. The company must now find new ways to steal more market capitalization away from industry leader, Wal-Mart. .
Proliferation of focus niches or combination strategy competitors: As the life cycle grows into a mature stage smaller companies within the entire retail industry have shifted their differentiation strategies to more of a focus strategy or focus/differentiation or focus/cost leadership strategy. While they are technically not in the same industry by definition, they are still eating away at the profitability of TGT by providing customers who know what they want to go to specialty stores that offer either what they want at a reduced price (Outlets or Specialty) or a broad range of products in particular segment (Best Buy-electronics, Kay Bee-toys). These smaller niche markets appear to be stronger forces than same industry competitors as they are able to either provide top of the line products at lower prices. While they may not have all of an individual's particular need as we provide, they have become viable competitors as they have a higher perceived knowledge base in their respective niche.
