Case Analysis. Grocery Category Expansion. Business & Marketing Essay

Target Case
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Target Case
Grocery Category Expansion
The decision to expand the grocery category bore both positive and negative impacts. First among the benefits was economies of scale. Each organization that intends to expand its operations needs to reduce production costs. Target, at the time of expansion, was a large organization with the resources capable of enhancing its economies of scale. The fact that the portfolio was fast experiencing competition challenges in a saturated market meant that reducing unit costs would help maintain Target’s market share. Expanding the grocery category would also be integral in the outlet’s intent to maintain its position as a mass merchandiser. Customer loyalty in the current operational environment is rooted in consistency and value creation. By positioning itself as a mass merchandiser, Target segmented its market, something that is needed to increase sales.
The expansion also manifested notable challenges. Mass merchandising is relatively a risky strategy. Normally, retailers are not assured of their customers. A decision to sell to a specific segment of customers is a pretense. Additionally, exploring economies of scale was resource extensive initially. An outlet needs to be endowed with resources both human and financial to maintain their motivation to trade on scales. Expanding a portfolio to reduce unit prices should be accompanied by other strategies. For instance, Target would have accompanied this move by focusing, new pricing strategies, or segmentation. The fact that they did not consider complementing expansion means that they would expand their grocery stores while maintaining the market share, which is a recipe for failures.
Target as a Significant Competitor
Target is a significant competitor in the grocery industry for various reasons. Primarily, the entity has the needed resources to compete in grocery. Looking at the case, the only challenges that Target faces in its grocery category is the increase of smaller stores that are located more to the people. The industry is also attractive and has multiple potential substitutes. Hence, if Target repositions itself and places its products appropriately, it automatically becomes a serious competitor. Target is also a renowned organization. By virtue of having been in the industry for a century, it has attracted loyalty that most organizations cannot boast. Ultimately, Target has the resources to expand or revitalize its operations. Expanding the grocery was an indication that it is capable of achieving what it needs in as far as competing in grocery is concerned.
Decisions
The current challenges that Target is facing means that it has to outweigh each of its key decisions. Analysis of the four possible options is as follows:
Do Nothing
Target maintains its current operations if it opts to do nothing about the challenges that it faces. By not doing anything, the outlet is positioning itself in such a way that it emphasizes only the current customers without any projections to expand operations. Doing nothing implies that Target will rely upon its previous name to maintain its position. Ultimately, the fact that it still maintains its key stakeholders such as su...