Today, organizations have many generic strategies they can use to develop and sustain their competitive advantage. The purpose of all these strategies is to differentiate one company from its competitors in an effort to become the most favored among consumers and ultimately the most profitable. Because of the economic downturn in 2010, most retailers aimed to be low-cost providers and adopted this as their generic strategy for competition. However, for some retailers, this was their approach from the beginning of their business venture. A low cost provider strategy is one that offers low cost and greater savings to consumers in order to stimulate demand and gain market share. This strategy can be adopted successfully by any company, but the two most prevalent companies that come to mind are Dollar Tree and Target and similar big box retailers. According to Forbs (2012), Dollar Tree, Family Dollar, and Dollar General have all grown into dominating dollar store chains that are stripping away market shares from other low cost retailers like Target.
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Target has designed a proven business model that is based on consumers looking for a one-stop shop retailer that stock multiple products at discounted prices. The business models target the customers they serve and the ability to provide low cost products and purchase those products in high volume at a low cost (Target.com, 2017). Contrary to what Target have designed and what has led to their success, Doller Tree, Family Dollar, and Dollar General is also a low-cost provider that offers a wide range of national brands. The difference is that it all costs $1.00. While the store front and options may be smaller in size compared to the larger retailers, Dollar Tree, Family Dollar and Dollar General have managed to have just as many stores and have pose a true competitive threat to the bigger retailers. In order for Target to maintain their competitive advantage based on being a low-cost provider, each company should re-evaluate their SWOT analysis and determine where there is a need for improvement. Some suggestions would be: • Strengths: Target is a dominant retailer with international presence. However, their international presence is relatively new and only dating back to 2014. The ability to continue this international expansion and modify shopping selections based on the demographics and location of the stores will further solidify their position as leading retailers of low cost goods. • Weaknesses: Because Target is a larger retailer, size of the physical stores could be a weakness. Some other countries cannot accommodate the sizing of these stores. Furthermore, larger stores require more employees and more overhead which …show more content…
Morehoust et.al. believes that early detection of low-cost competitors will allow for time to develop and focus on strategies that offer a cost advantage. They also believe that continuous concentration on a cost-effective design process rather than a unique product design will reduce complexity and allow for further streamlining processes to cut down on costs and offer affordable models. Other tools include the assembly of products in low-cost countries as well as engaging consumer-to-consumer online communities and develop low-cost shipping and distribution models via third-party logistics providers. These tools in addition with the low-cost provider strategy along with the suggestions of a more formal SWOT analysis could help the company sustain their competitive edge over the quick expansion of rival retailers like Dollar Genera, Dollar Tree, and Family
Target has designed a proven business model that is based on consumers looking for a one-stop shop retailer that stock multiple products at discounted prices. The business models target the customers they serve and the ability to provide low cost products and purchase those products in high volume at a low cost (Target.com, 2017). Contrary to what Target have designed and what has led to their success, Doller Tree, Family Dollar, and Dollar General is also a low-cost provider that offers a wide range of national brands. The difference is that it all costs $1.00. While the store front and options may be smaller in size compared to the larger retailers, Dollar Tree, Family Dollar and Dollar General have managed to have just as many stores and have pose a true competitive threat to the bigger retailers. In order for Target to maintain their competitive advantage based on being a low-cost provider, each company should re-evaluate their SWOT analysis and determine where there is a need for improvement. Some suggestions would be: • Strengths: Target is a dominant retailer with international presence. However, their international presence is relatively new and only dating back to 2014. The ability to continue this international expansion and modify shopping selections based on the demographics and location of the stores will further solidify their position as leading retailers of low cost goods. • Weaknesses: Because Target is a larger retailer, size of the physical stores could be a weakness. Some other countries cannot accommodate the sizing of these stores. Furthermore, larger stores require more employees and more overhead which …show more content…
Morehoust et.al. believes that early detection of low-cost competitors will allow for time to develop and focus on strategies that offer a cost advantage. They also believe that continuous concentration on a cost-effective design process rather than a unique product design will reduce complexity and allow for further streamlining processes to cut down on costs and offer affordable models. Other tools include the assembly of products in low-cost countries as well as engaging consumer-to-consumer online communities and develop low-cost shipping and distribution models via third-party logistics providers. These tools in addition with the low-cost provider strategy along with the suggestions of a more formal SWOT analysis could help the company sustain their competitive edge over the quick expansion of rival retailers like Dollar Genera, Dollar Tree, and Family