Evaluation Of Targets Vrio Framework And Capabilities Of A Firm

Target Corporation is an evolving company. Target has great expectations for its future. For the year 2015, Target aims to expand its experience in order to effectively alter their customer’s expectations and shopping behavior. Target’s industry outlook starts with opening fifteen new stores for the year. The strategic store growth plans focus on localization and customer experience. Target will establish new store formats such as TargetExpress and CityTarget, while also offering new experiences, merchandising layouts and innovations in its general merchandising stores. (Target.com) The retailer’s TargetExpress is the smallest store format at approximately 20,000 square feet and aims to provide customers with effective quick trip shopping experience.

Target is one of the largest retailers in the United States. Target wants to be able to give guests better quality products for a cheaper price. They also want to be the one stop shop. Target relies on their team members to keep

Within every organization there are advantages and disadvantages as well as strengthens and weakness. One of the biggest weaknesses of the Target Corporation is that all of their operations are located in the US. The organization would benefit more if they engaged in business with multinational countries. Wal-Mart has more than 11,000 retail stores in 27 multinational countries. If Target is ever going to move out of their second place position behind Wal-Mart there are going to need to expand globally. The Target Corporation is still trying to recover from the embarrassing financial disaster they made when they tried expanding their brand in Canada. Target spent 1.8 billion for 222 locations in Canada. Unfortunately, this merger

Target Corporation (NYSE:TGT) is the leading large-format general merchandise and discount retailer in the U.S., challenging Wal-Mart in electronics, toys and apparel while also seeking to differentiate with higher-end fashions and products for an upscale audience. As of the close of their latest fiscal year (FY2011), Target operated approximately 1,760 stores encompassing 233,000 square feet in 49 states and the District of Columbia. The company is divided into the retail and credit card divisions and moves the majority of its products through a highly integrated network of 37 different distribution centers, which include four food distribution centers. Target is one of the most well-entrenched large format retailers in the U.S., has the ability to manage their pricing strategies at a level of accuracy and precision that is comparable to Wal-Mart (Henderson, 2001). Unlike Wal-Mart, Target concentrates on a value-based message that concentrates on quality and price differentiation to sustain their gross margins while Wal-Mart concentrates on supply chain efficiency and a continual reduction of supplier and transaction costs (Krishnamurthi, 2001).

After the recession, Target’s value proposition shifted to simply offer affordable options in a wide array of product areas. However, now with better economic conditions and without the ability to offer lower prices than its affordable retail competitors, such as Walmart, and in order to stay relevant and refresh the company, Target needs to reposition itself as the high-quality concept and style-oriented retail store it was once known for.

Target achieved its differentiation in the marketplace by positioning its products and store experience as higher quality than its main discount competitors Wal-Mart, with lower prices than department stores. Target’s main focus is QUALITY product and at a LOW PRICE. It all began with the idea of, “fashionable, smart design…delivered at a competitive discount prices.” Target strives to deliver to customers a unique shopping experience. Target grabs customer’s attention by their big red bulls eye and customers keep going to target. But at the same time Target need to make sure that their shelves are stocked, they gave good customer service,

The VRIO Frameworks permits to see which tangible and intangible resources give Amazon its superior performance. The company has a competitive advantage over its rivals as Amazon focuses on its customers. Amazon offers a wide array of selection of goods at various prices to its millions of customers. Amazon has been able to keep this competitive advantage by leveraging its resources. For the resources to attribute to competitive advantage they must pass the VRIO framework. The VRIO framework states that a resource must be valuable, rare, costly to imitate, and organized to captured value. Each of Amazon’s tangible and intangible resources are evaluated to see which meet the above criteria.

Because of the success of Target stores, the company was renamed Target Corporation in August 2000. Target Corporation has three main divisions: Target Stores, Mervyn's, and Marshall Field's. Target Stores, the second largest discount retailer, offers products geared to attract a more affluent discount shopper. The Target customer is much younger than other discount BIG BOX stores with an average age of just 40, mostly female, have children and are college graduates. The distinction in customer base is important due to the emphasis on quality at lower prices. Target separates itself from its competitors by offering more up-to-date and stylish products, better quality, while still keeping prices lower. The attractiveness of the store presentations and the employee attentiveness also gives Target an edge against other BIG BOX discount retailers.

Target Corporation is known worldwide as a large retail chain that brings in millions of dollars each fiscal year. The ability to remain competitive in a saturated industry could prove difficult to some retailers, but Target remains one of the leaders in the retail market. With success comes risk. Target Corporation competes against online retailers as well as “big box” stores to remain competitive.

During that same year, Target makes a mark as a discount retailer transforming from a family run department store into a discount store chain providing affordable products and designs for all. Today, with their vision statement of expect more pay less, they still believe that great design doesn’t have to cost a fortune. They are focused on developing and delivering products that solve their guest’s everyday problems, make their lives more convenient, and simply make them smile (Design Innovation, 2016).

Target has incorporated three more designers into their merchandise line in the last few months, but at the low cost of what customers expect. More food and grocery are being offered at Target stores annually. Target is not only looking on how to improve the merchandise for the customer but also the

Target Corporation has recognized itself as one of the top retailers in the United States market on the basis of excellent service quality, customer experiences, operational excellence, strong financial position, and a wide array of product offerings. Through its high degree of service orientation at physical outlets and adoption of fair business practices, Target Corporation has become the most distinctive retailer in the eyes of its potential customers. Being one of the top-notch retailers in the United States, Target Corporation has to carefully strategize on its business operations and marketing tactics so as to keep itself in the row of competitive brands of the industry.

In my personal opinion, Target should continue to develop a specific portfolio that is specifically targeted to its customer’s needs and likes, while focusing on maintaining the same product quality and variety for each store brand. Through its marketing strategy, the retailer has to assure the consumer they are purchasing the same quality product as if they were buying a national brand at a more affordable price; which at the end is more convenient for the consumer and does not have to sacrifice quality. Target should also expand to the South and Northeast where there are still plenty of attractive locations with no Target presence. This will attract more customers and consequently strengthen its store brands.

Barney and Hesterly (2006), describe the VRIO framework as a good tool to examine the internal environment of a firm. They state that VRIO “stands for four questions one must ask about a resource or capability to determine its competitive potential:

VRIN framework is the four criteria of sustainable competitive advantage. To identify a company’s competitive advantage, they must consider if their capabilities are valuable, rare, costly to imitate and nonsubstitutable.