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Wednesday, September 8, 2010

Target: Porter's Value Chain Model

Target According to Porter’s Value Chain Model


Everyone knows Target. Most people would consider Target a very successful business. But is Target really successful? One can determine this through research and using Porter’s Value Chain Model.


Target’s competitive strategy is cost leadership. Their slogan is “Expect More. Pay Less.” They sell good quality products at a low price. Target’s major competitors are Wal-Mart and K-Mart. Target’s business model involves doing everything they can to sell good quality products at a price reasonable to the customers so they can make a profit. The picture below will help visualize what Target is about.



In Porter’s Value Chain Model, there are five primary activities a business should use. They are Inbound Logistics, Operations, Outbound Logistics, Marketing and Sales, and Customer Service. There are certain tasks Target should accomplish for each primary activity. The first primary activity is Inbound Logistics. The tasks Target should accomplish for this activity are being sure that there is a supply schedule to delivery shipments on time, to make sure the products are of good quality, and that deliveries are done efficiently. The second primary activity is Operations. The tasks Target should accomplish for this activity are to be sure that the products being bought are manufactured correctly without any mistakes or faults and to be sure that breakable items are packaged so that they won’t break and become damaged. The third primary activity is Outbound Logistics. The task Target should accomplish for this activity is checking to make sure the products received are correct and ready to be put on the shelves to be sold to costumers. The fourth primary activity is Marketing and Sales. The task Target should accomplish for this activity is making sure that they do things appealing to the consumer. They should place little items that people forget and will pick up by the register. They should have good sales that bet their competitors. Their commercials should be entertaining and show why consumers should shop there. Marketing and Sales is a huge part of success in business. The fifth primary activity is Customer Service. The task Target needs to accomplish for this activity is making sure the Customer Service employees are nice, willing to help, and know how to help. This will make more customers return to Target if they have good experiences with getting help when needed. Another task is returns. Returns are taken to Customer Service so Target should make sure they ask why the product is being returned and what they could do to help.

Target uses computers to ring items up. They even have scanners to identify the prices for customers without asking an employee. They can use their computer system to find the same product at another store if it is not in stock or to find a store closer to the customer. These systems are a part of competitor advantages because it allows them to compete with other companies and become better is other companies do not have that advantage. For example, Wal-Mart does not have scanners to help customers identify a price without employee help. With the nature of Target’s business, they have to compete in every way possible in order to stay in competition.

Target is successful because they have goals and use a productive business model and use ideas from Porter’s Value Chain Model. Their competitive advantage allows them to be successful as well. In my personal opinion, I believe that Target beats Wal-Mart except for the grocery part.

Bibliography
"Target : Company : Company." Target Corporation Redirection Page. Web. 09 Sept. 2010.

<http://sites.target.com/site/en/company/page.jsp?contentId=WCMP04-030795>.

"Target Corporation." Wikipedia, the Free Encyclopedia. Web. 09 Sept. 2010. 


            <http://en.wikipedia.org/wiki/Target_Corporation>.


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