Discuss about the Dynamic Framework for Sustainable Strategy.
Business expansion is an important activity which should be initiated by all organization present in the environment. This aspect helps the companies to grow and compete with other organizations present in the environment and gain competence as well. After successfully establishing the business in home country, the organizations should go for expansion in other countries as well. The purpose of this report is to provide a brief overview of the marketing aspects of the company Target Corporation this organization is aiming to expand their business in Saudi Arabia. The organization want to open their discount store in that area, the company is formerly based in USA and is now aiming for expansion. The below mentioned report provides details of SWOT, Porter, PESTEL, and other strategic analysis of the company. It also talks about the ways to maintain customer relationship in KSA (Kingdom of Saudi Arabia). More details about the task are discussed below:
‘Target Corporation’ is a discounted retail store based in United States of America. The company is placed among largest retail stores present in the international market. Further, the organization holds second position in this industry after Walmart. Target Corporation was introduced by George Dayton in the year 1902; also the company is headquartered in Minneapolis, Minnesota. Currently, the company is initiating their business activities in US where it has opened 1834 retail outlets as well. The company mainly targets the needs of young customers and image-concerned shoppers (Target Corporation 2014). And now, the company is proposing new plans for expansion in KSA. Saudi Arabia can be regarded as a good option for the company to grow and expand sales as there is large target market in that area. Further the mission, vision and objectives of Target Corporation of Saudi Arabia are discussed below:
In KSA, the company aims to initiate high quality, trendy merchandise at reasonable prices in large, open and clean customer-friendly retail stores. The purpose of the company opening their store in Saudi Arabia is to make their organization first choice of people for shopping in retail stores.
The vision of the organization states that they want to commit to their customers to provide high quality products at low prices. The company has developed promises to community, environment and society to provide greatest value (Target Corporation 2014).
As it is noted that Target Corporation is the second largest retail store based in America. So, the organization aims to provide everyday fashionable and essential, differential merchandise at affordable and discounted rates to the people of Saudi Arabia. Further, the organization also aims to initiate customer-oriented activities that solely focus on their needs and preferences in the products and services offered by them in the market.
Target Corporation Company in Saudi Arabia will initiate their business activities by offering differential products to customers at discounted prices in the market. The organization serves different types of the products like household essential, food and pet supplies, grocery, baby care, dairy products, beauty products and paper products etc. Apart from these products, the company will also provide retail services in the market like target sourcing service, financial services etc. Under the financial services sector, the company will issue credit card to the people of Saudi Arabia (Target Corporation 2018).
In order to organize the business activities in Saudi Arabia, the company Target implements a plan that includes all details that can help the company to grow and sustain their activities in new market. Further, the strategies of marketing plan are discussed below:
The target market of the company is the retail market of Saudi Arabia. As the company is providing high quality products with extraordinary value at discounted prices in the market, so the purpose of the organization is to target people who can easily attain the products offered by the company. The fact should be noted that Arab is a country where there is high poverty ratio, it should be noted that the company should offer their products and services to people who cannot buy high prices range products. They aim to offer them these products at low rates in the market (Almutairi, et. al., 2015).
Further, the customers are segmented in KSA on the basis of demographic, psychographic, behavioral feature of customers. The main target audience of Target Corporation is listed below:
By, targeting the above mentioned prospective customers, Target Corporation can easily create and implementing marketing strategies that are listed below:
In the country KSA, Target Corporation will provide products to the customers at discounted prices. Different sections of the stores are mentioned below:
While other services provided by the company are financial services, pharmacy services and outsourcing services. The organization aims to offer good quality products so as to easily gain advantage of diversification in the market of KSA.
As discussed above that the company is targeting middle and lower income level people, so they aim to initiate pricing strategies in such a way that they attain greater level of satisfaction at lower prices. The company aims to used discounted pricing strategy to serve the products and services in the market of KSA. The company will target prices existing retailer of KSA then the provide products at discounted prices to the customers (Jin, B., Almousa, and Kim 2018).
Under the process of business expansion, the company will create a distribution channel in major part of KSA. Target Corporation will initiate an extensive distribution network that properly supplies the products and services in the market. These products will be directly delivered to the end users through the retail stores and online websites.
With the use of effective promotion strategy, the company aims to communicate its mission and vision statement in the market of KSA. This will enhance the advertisement strategy, also the company will provide offline and online media. The company will also make use of print media to effective promote the name of the company in the target market. Further, Target Corporation aims to align with various online websites like Flipkart to attract the online customers. Further, to attract the customers and retain them, the organization uses the strategy of providing gift cards to them and personally contacting them after sales (Ansari, and Qadri 2018). Thus, the above mentioned attributes will help the company to easily target the customers present in Saudi Arabia.
The company is being accused of not performing various employment related laws properly in the organization (Abunar, S.M., Ali, M., Fazelrabbi, and Ismail 2016).
There is presence of low bargaining power in the hands of customers in the market. As there is presence of limited organizations in retail sector and relative high customer demand that gives an advantage to companies and reduces the power of customers in the market. Also, the organization retain its customers by providing high quality products at low prices in the market (De Bel-Air 2014).
There is presence medium level of power in the hands of suppliers in the retail sector. As the government of Arab control the production and supply of raw material of food in the retail market resulting to which, it becomes difficult for the suppliers to demand higher from the organization. Also, all suppliers provide similar price of products in the market which subsequently decreases their power.
Threat of new entrants is relatively low for the company in Saudi Arabia. Retail is an industry that requires huge capital investment along with qualified human resource that can organize the activities of business. Apart from that strong brand image is also a requirement for the sales of the retails stores in market. So, it become very difficult to enter in the market compete with such branded corporations (Al-Khatib, Dant, and Vitell 2015).
There is presence of medium level threat in case of substitution of products and services in the market. All the retails stores offer similar kind of product with similar prices so the customer can purchase the products from any of the organization. But, people wish to shop from nearby departmental stores rather than super market.
The retail industry of Saudi Arabia is very warm and vibrant where around 63% of Middle Eastern region import their food from Saudi Arabia. This makes the country highly competent in the food production and supply industry. The biggest competition of Target Corporation in Saudi Arabia would be Almarai Company. Further, competition is moderate in this sector and many companies do not have strong image like Target Corporation (Kadasah 2017).
Political: In the Kingdom of Saudi Arabia, the government plays a crucial role in business market. The government of the country has developed a business friendly regulation that helps the businesses to establish their branches in Saudi Arabia. The favorable political conditions instigate business people to invest in this country.
Economic: Talking about the economy of Saudi Arabia, it should be noted that the company has earned a significant growth due to supplying oil at high prices in worldwide. Oil is the major asset of the country on the basis of which the GDP of the country depends. Thus, such favorable conditions can help the business of Target Corporation to grow excessively in the market (ADHRB 2017).
Social: KSA is a country with lowest poverty rate that shows that people in this country do not hold enough cash in hand. Thus, if the organization will provide low rate products and services in the market then they can easily earn revenue.
Technological: The Company can use the social media sites to approach to people. Technological advancement is an important tool that helps a business to grow (Randheer, and Al-Aali, 2015).
In US, the company is successfully building relationship with people, as they know that the customers are the lifeblood of a business. Also, it should be noted that retail sector only works when the customers prefers the services of the company. So, with that respect the organization aimed to initiate personal interaction with people of KSA and acknowledge them about the services rendered by the company. The satisfied the requirements of the customers and provided them gift cards as well. This increases the customer loyalty as well. Further, the relationship can be easily maintained through follow up and after sale services (Ezzi 2016).
The company initiates decision only after analyzing all the internal and external market conditions. So, Target Corporation adequately identifies the requirements of the customer present in the market and then they identify the alternative needs of the retail products. This will help the company to adequately satisfy the customers. The company hires employees of Saudi Arabia only who can understand the needs of the customers and satisfy them properly. Further, they solely focus on the expectation of customers and aim to provide those products and services accordingly (Alam, and Elaasi, 2016). Lastly, feedback and response are the two most important after sale activities organized by the company.
Market research is an important tool that helps the organization to enter in the market and effectively make a change in that market as well. Proper analysis will help the company to oversee the risks and opportunities and work on them effectively. Research will also help the company to evaluate the demand of products and services prevailing in the market (Verdin, and Tackx 2015). With this, it will become easy for Target Corporation to identify the target audience and focus on them as well. This aspect will help the organization in better decision making process as with this effect they will easily get knowledge about the market in which they are going to enter and its various attributes.
Many factors present in the environment can help the Target Corporation to choose the best customer segment for them. First one is the market potential that includes the number of customers, their income, needs etc. Competitive situation also helps an organization attaining customers (Laszlo, and Cescau 2017). The company should target the lower and middle income level people for better sales of their organization.
The organization lays emphasis on their mission and vision statements and provides services accordingly. ‘Expect more and pay less’ according to this motive the organization provides lower price, high quality products. Fashionable and differentiated products are offered at differentiated prices to increase the value proposition (Womack, and Jones 2015)
The organization initiates many activities to manage their products and services. Their focus is on keeping top selling products like paper towels, detergent, and diapers on the stores every time. Effective supply chain system is designed to attain products from distributors in a cost effective manner. The organization also try to avoid the situation of no stock or excess stock at stores (Kavadias, Ladas, and Loch 2016). The company determines further, new product development following goal:
Implementation of innovation in production process (Pollitt 2016)
Conclusion
Thus, in the limelight of above-mentioned events, it should be noted that target Corporation is a fast growing retailer present in the international market. Now, the company is aiming to expand in Saudi Arabia that gives them advantage to increase the customer base. Further, the above analysis explains external and internal analysis and marketing plan that can support the company in properly accomplishing their establishment in new market.
Reference
Abunar, S.M., Ali, M., Fazelrabbi, M. and Ismail, H., 2016. A Study of State of Food Retail Supply Chain in Saudi Arabia: A Conceptual Framework. Engineering Management Research, 5(2), p.1.
ADHRB, 2017, Overview: Poverty in Saudi Arabia, Americans for Democracy & Human Rights in Bahrain.
Alam, M.Z. and Elaasi, S.A., 2016. A Study on Consumer Perception towards E-Shopping in KSA. International Journal of Business and Management, 11(7), p.202.
Al-Khatib, J., Dant, R.P. and Vitell, S.J., 2015. Marketing and Economic Development: the Saudi Arabian Experience. In Proceedings of the 1989 Academy of Marketing Science (AMS) Annual Conference (pp. 659-664). Springer, Cham.
Almutairi, K., Thoma, G., Burek, J., Algarni, S. and Nutter, D., 2015. Life cycle assessment and economic analysis of residential air conditioning in Saudi Arabia. Energy and Buildings, 102, pp.370-379.
Ansari, Z.A. and Qadri, F.A., 2018. Role of E-retailer’s Image in Online Consumer Behaviour–Empirical Findings from E-customers’ Perspective in Saudi Arabia. International Business Research, 11(4), p.57.
De Bel-Air, F., 2014. Demography, migration and labour market in Saudi Arabia.
Ezzi, S.W., 2016. Exploring the Characteristics of the E-commerce Marketplace in Saudi Arabia. International Journal of Economic Perspectives, 10(4), pp.5-20.
Hendrikse, G.W., Cliquet, G., Ehrmann, T. and Windsperger, J., 2017. Management and Governance of Networks. Springer.
Hussey, M. and Bia, B., 2014, The Kingdom of Saudi Arabia – Retail Market Overview, available from <https://www.bordbia.ie/industry/manufacturers/insight/alerts/pages/thekingdomofsaudiarabiaretailmarketoverview.aspx>Accessed on 13 April 2018.
Jin, B., Almousa, M.O. and Kim, N., 2018. Retailing amid regulation and religion: The unique cultural challenges and opportunities facing market ventures in Saudi Arabia. Journal of Cultural Marketing Strategy, 3(1), pp.70-81.
Kadasah, N.A., 2017. An Evaluation of Service Quality of a Telecommunication Company in Saudi Arabia using SERVPERF Scale. International Review of Management and Business Research, 6(1), p.162.
Kavadias, S., Ladas, K. and Loch, C., 2016. The transformative business model. Harvard business review, 94(10), pp.91-98.
Laszlo, C. and Cescau, P., 2017. Sustainable value: How the world’s leading companies are doing well by doing good. Routledge.
Pollitt, M., 2016, September. Business Models for Future Energy Systems. British Institute of Energy Economics Research Conference, Oxford, UK.
Randheer, K. and Al-Aali, A., 2015. What, Who, How and Where: Retailing Industry in Saudi Arabia. Journal of Competitiveness Studies, 23(3), p.54.
Target Corporation, 2014, Target 2013 Annual Report, available from https://corporate.target.com/annual-reports/pdf-viewer-2013?cover=6725&parts=6724-6726-6727-6730-67288 Accessed on 13 April 2018.
Target Corporation, 2018, Target Corporate: Social Responsibility, Careers, Press, Investors, available from <https://corporate.target.com/> Accessed on 13 April 2018.
Verdin, P. and Tackx, K., 2015. Are You Creating or Capturing Value? A dynamic framework for sustainable strategy. Working Papers CEB, 15.
Womack, J.P. and Jones, D.T., 2015. Lean solutions: how companies and customers can create value and wealth together. Simon and Schuster.
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