BATTLE OF THE DISCOUNT RETAILER: The Visionary’s Secret Weapon
A Comparative Case Analysis
A Paper Presented in Partial Fulfillment
Of the Requirements of
Abstract
The recognized giants in today’s discount retail market are Wal-Mart, Sears, Roebuck and Company, and Target, and this paper compares Wal-Mart and Target. As the competition stiffens to capture market niches, these two organizations are heading for a showdown. This work demonstrates distinctive differences in company culture, promotion within the organization, lofty goal setting, and leadership styles between these two organizations. Although this paper shows a definite competitive advantage for the Wal-Mart organization, it will also demonstrate that Target Corporation has taken some innovative steps to secure itself in the discount retail market.
Battle of the Discount Retailer: The Visionary’s Secret Weapon
What makes a company great? This is one of those pithy questions--like "What is great art?" or "What is great leadership?" that defy a simple response. Are companies deemed great because they have made buckets of money, or because they have made their employees happy? Are companies great when they make an impact on Wall Street or when they make an impact on the world? As a general rule all-visionary companies jealously preserve strong, and sometimes fanatical, corporate cultures even as companies adapt to rapidly changing times. Visionary companies heavily promote executives from within, constantly set lofty goals, and surprisingly, CEO’s are rarely charismatic. Moreover, visionary companies drive to make an impact on society, not just to make profits. This research project will serve two objectives: first to define what constitutes a visionary company, and then to show a comparison between a visionary company and a non-visionary company.
To demonstrate the above stated principles this researcher chose two companies. I chose Wal-Mart as my visionary company within the mass-market discount retailing industry. I chose Target Corporation as my comparison company since it serves the same market as Wal-Mart and has been doing business for a similarly long time. Based on the research presented, Wal-Mart has clearly out performed Target in all categories that lead an organization toward visionary status.
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According to Kantar Retail, most of Target’s shoppers are younger on average than its rivals, and more educated. That means it has to consistently offer something different and appealing; it emphasizes more on the latest-trend apparel, eye-catching home décor and exclusive designer merchandise than its competitors. This results in a willingness to pay a bit more for items by customers who are willing to pay a bit more. Moreover, this successful
Levy, Michael, Barton A. Weitz, and Dhruv Grewal. Retailing Management. ed. New York, NY: McGraw-Hill Education, 2014. Print.
Target Corporation pioneered value chain activities like focusing on customer experience through superior marketing, ability to attract global talent, sustain in and outbound supply logistics, develop supplies with a high-quality vendor and partners, a great customer service, extend return by 30 more days if purchased through Target brand store cards, and a skilled workforce supports its generic strategy of "Expect more Pay Less" improves competitive position that its rival cannot match. --
The retail stores of JC Penney and Sears have face headlines of “Which is Worst: JCP or Sears?” The end maybe near for both companies (Andersen2014). The customers look at the employees like their idiots. The public believes that poor management is the reason for the down fall of these companies. Eddie Lambert and Ron Johnson are the CEO’s of being credited to running these companies with wrong management strategies (Andersen 2014). Ron Johnson who is now the former CEO was highly qualified with his retail instincts tried to run the store like a retail boutique. He never took the time to consult a survey on what the consumer’s thought were and after two years he jeopardized the company (Andersen 2014). Whereas the CEO Eddie Lambert of Sears
Management is a key to success, and Kmart needs proper management to help create a positive image that attracts more customers. Kmart’s disorderly management and bankruptcy caused many customers to shop with other retailers. According to Carr, Wal-Mart and Kmart were the same size in 1990. Since then, Kmart has grown far slower than its rival or the industry. Once one of the largest discount retailers, Kmart filed for the biggest Chapter 11 bankruptcy for discount retailing in the United States (2002). Struggling to find the right type of management has been one of Kmart’s problems that ultimately helped lead the company to its downfall. Kmart is constantly changing CEO’s, and thus focuses. Kmart has had four different CEO’s since 2000, all with different management objectives.
The Target Corporation formerly known as “The Dayton Dry Goods Company” is a major retailing company that was founded in 1902 in Minneapolis, Minnesota by George Draper Dayton. It is ranked the second largest discount retailer in the United States and ranked thirty- sixth on the Fortune 500 as of 2013. The Target Corporation has been serving this nation with the best price possible goods since their expansion from “Dayton” and is continuously winning the hearts of consumers with their dedication and service. A phenomenal merchandising strategy and cross channeling has enabled this upscale discounter to serve their purpose of customer loyalty and fulfill their promise of “Expect more and Pay less”.
Wal-Mart's history is one of innovation, leadership and success. It started with a single store in Rogers, Arkansas in 1962 and has grown to what is now the world's largest - and arguably, the most emulated - retailer. Some researchers refer to Wal-Mart as the industry trendsetter. Today, this retailing pioneer has annual revenues of over $100 billion, 3,000 stores and more than 750,000 employees worldwide. Wal-Mart operates each store, from the products it stocks, to the front-end equipment that helps speed checkout, with the same philosophy: provide everyday low prices and superior customer service. Lower prices also eliminate the expense of frequent sales promotions and sales are more predictable. Wal-Mart has invested heavily in its unique cross-docking inventory system. Cross docking has enabled Wal-Mart to achieve economies of scale which reduce its costs of sales. With this system, goods are continuously delivered to stores within 48 hours and often without having to inventory them. This allows Wal-Mart to replenish the shelves 4 times faster than its competition. Wal-Mart’s ability to replenish theirs shelves four times faster than its competition is just another advantage they have over competition. Wal-Mart leverages its buying power through purchasing in bulks and distributing the goods on it’s own. Wal-Mart guarantees everyday low prices and considers them the one stop shop.
The purpose of this memo is to show the affects of how Albertson’s is trying to implement many strategies in order to try, and compete with its powerhouse competitor Wal-Mart. This memo will contain information on steps Albertson’s is taking to gain back some of the market share that Wal-Mart has swallowed up. It will also describe Albertson’s planned innovations that will be what determines their success. Lastly it will discuss how through IT as well as a successful implementation of satisfying consumers demands, will possibly allow them to compete with the ever so powerful Wal-Mart.
On January 22, 2002, Kmart filed for Chapter 11 bankruptcy protection becoming the largest retailer ever to do so in U.S. history. Most industry analysts attributed the immediate cause of the company's bankruptcy filing to a dull holiday season and stiff competition from WalMart and Target as the chain's more fundamental problem. But competition wasn't the root cause of Kmart's consistently poor performance. The real reason for Kmart's poor performance is that Kmart never had a marketing strategy. Kmart completely misunderstood its market and was positioning itself in the wrong direction. Also, on the strategic side, there are issues of where stores were located. On the whole, Kmart stores did not seem to be sited as well as the stores of the competition. Then there was the issue of technology. While Wal-Mart was becoming the relentless efficiency engine that we know today by investing in technology and streamlining the supply chain, Kmart held back. As Wal-Mart developed an infrastructure that enabled it to lower prices, Kmart slipped into a price disadvantage. This paper discusses these strategic problems that led to Kmart's poor performance.
Over the years Target has retailed a large variety of products but has differentiated itself by marketing itself as “cheap chic”. This communications strategy targeted an up-market cachet with quality merchandise at affordable prices. They bring new trends to shelves faster than other discount retailers and integrated “fast fashion” to result in more frequent shopper visits. Advertising campaigns such as “Expect More, Pay Less” work to communicate their target audience of younger, more affluent, and educated market. They have appealed to their markets “category need, brand awareness, brand attitude, and brand purchase intention” with its IMC strategies [482]. Walmart has conveyed a brand as a discount superstore, which consumers perceive
In a classroom where Jack Welch has appeared more than 250 times in the past seventeen years to engage some 15,000 GE managers and executives, something extraordinary happens. The legendary chairman of GE, the take-no-prisoners tough guy who gets results at any cost, becomes human. His slight stutter, a handicap that has bedeviled him since childhood, makes him oddly vulnerable. The students see all of Jack here: the management theorist, strategic thinker, business teacher, and corporate icon who made it to the top despite his working-class background. The fact is no one leaves the room untouched. If leadership is an art, then surely Mr. Welch has proved himself a master painter. Few have personified corporate leadership more dramatically. Fewer still have so consistently delivered on the results of that leadership. For 17 years, while big companies and their chieftains have come and gone, Welch has led GE to one revenue and earnings record after another. What can be inferred from this case study is the fact that Jack Welch does it through sheer force of personality, coupled with an unbridled passion for winning the game of business and a keen attention to details many chieftains would simply overlook. He does it because he encourages near-brutal candor in the meetings he holds to guide the company through each work year. And he does it because, above all else, he’s a fierce believer in the power of his people.
The first factor is level 5 leadership. A leader is the soul of the company. Base on the research, every good-to-great company had level 5 leaders during the pivotal transition years. In the book, level 5 leaders embody a paradoxical blend of personal humility and professional will (Collins, 2001, p.13). Darwin E. Smith is an example of lever 5 leasers. Smith transforms Kimberly-Clark into the leading paper-based consumer products company in the world within twenty years. Generated cumulative stocks return 4.1 times the general market, furthermore beating its direct rivals Procter & Gamble and Scott Paper. Level 5 leaderships’ ambition i...
The interpersonal role of management within Target lacked leadership and they did not work will with those outside of their company. Target was given information that they did not use in a timely manner (Plachkinova & Maurer, 2018). Target’s CEO went to his various stores across the country
Retrieved from Walmart: http://corporate.walmart.com/our-story/history/sam-walton.
There is a wise saying in a business world that, ‘Competence is a factor for entry into good office, but inspiration to others is the success measure.’ Executive leaders should note that the super trait sought for by the Board of Directors and organizations, in senior executives, is the ability to lead and motivate others. This is according to a market survey of 1200 business leaders globally by IIC Partners, a leading worldwide executive search. This trait enables the leaders to coalesce organization practices into a single command. The action draws teamwork in service rendering. This is an important product that fuels maximization of service output by employees. An executive also needs to inspire employees by recruiting from within. The strategy inspires employees to work hard with optimism that their services would be recognized. For executives, although entry point is merited, work sustainability is pegged on the ability to inspire others.