Target's Rivalry: The Department Store Industry

There is limited growth potential in this industry. If a company has the resources and the capabilities they may be able to grow and sustain competitive advantage. It is highly competitive industry . The industry revenue has declined 4% in the past five years and is projected to decline 2.6% in the next five years (Cohen). In this industry competitive forces are already high. They can strengthen if more firms who have the capabilities and the resources to enter the market. Driving forces can either increase or decrease the profitability of the market. If competitive rivalry, threats of entrants, power of buyers and the substitute of products/services decline then there will have an increase of profitability. If they rise and the power of the suppliers rise as well, then there

This market need to understand that the future consumer behaviors are towards a faster, convenient and on the go shopping. Department stores may start offering its customers not only a get and pay transaction, but offer them an experience of an ideal purchase environment and creating a new way to see its brand loyalty to differentiate from its greatest rival, the e-commerce. For instance, Target is offering its REDcard for clients to see more value and more benefits when they purchase at their stores. By doing this, they are increasing its customers witch of cost. Others are offering price comparison apps, so customers can access to the store prices and their competitors to show them the best deals. Stores need to focus on meet customer’s expectation and to win back their trust and create a strong brand loyalty. Also, because competition is already high, incumbents can use more of its financial resources to create stronger barriers for new competitors or to merge with companies that help to create more value to the overall company