Analysis -Target

579 WordsMar 26, 20123 Pages
What microenvironmental factors have affected Target’s performance over the past few years? The microenvironment consists of actors close to a company that affect its ability to serve its customers (Kotler p66.) Prior to 2008, Target had great success positioning its brand as the discount retailer with “slightly better stuff for slightly higher prices” (Kotler p. 94.) However, in 2008, Market leader Wal Mart’s “Save Money. Live Better.” slogan and price rollbacks resonated more with consumers and they chose Wal Mart for their discount retail shopping. The company’s CEO announced it would implement a new strategy in 2008 and focus on the “Pay Less” aspect of their slogan “Expect More. Pay Less.” The company determined it would make its prices match up with those of Wal Mart in an attempt to take some of Wal Mart’s market share. As Target CEO Greg Steinhafel launched his new strategy, shareholder William Ackman claimed the company’s board of directors lacked experience, and tried to take control of five of Target’s board’s seats. Steinhafel then increased marketing attempts focusing on “Pay Less.” What macroenvironmnetal factors have affected Target’s performance during that period? The macroenvironment is composed of the larger societal forces that affect the microenvironment. The biggest macroenvironmnetal factor that affected Target from 2008 – 2010 is the recession that began in 2008. The recession changed the economic environment and consumer began cutting back expenses. Target’s brand positioning made consumers associate the company with higher prices and they turned to Wal Mart for their discount retail needs. However, Target developed a strategy to change consumers’ perception. The company introduced its own product line and began converting a small section of stores in mini grocery stores. This capitalized on the economic environment, as customers

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