Forgotten Freedom:Birthday

Targets suppliers are wark giving Target the majority of the power in their relationship. Target demonstrates their power by enforcing quality stadards back onto suppliers for the goods that they place in the store. This includes some suppliers that are in exclusive contracts with Target so that their goods are sold in only Target stores. Should Target decide to pull the items from the shelves it would seriously damage the supplier in the short term, although they may be able to recover after finding a new merchant for their goods. Another type of supplier for Target is the employees who work in the stores. Due to the low level of skill that the many entry level employees must have they are in no position to bargin and must accept what Target is willing to pay them. Substitutions are not very likely for Target because they are in the service industry. Although there is minor substitutions through the internet that provide lower prices and trhough catalogs that may provide better quality or exclusive brands they are a minor part of the industry. Both substitutes are weak because of the fact that they are located further away. Even with next day shipping it takes longer to get the items a person wants and that is at a high cost to ship so fast. Also these alternatives do not allow for a tangible view of the good until after they are orderd and recieved by the customer. This means that the customer must hope the item is correct and that there are no problems or defects with it. This problem is further compounded by the fact that customer service is at a distance and must be conducted over the phone or the internet. This can lead to problems with getting a replacement or refund and even when one is recieved there is more time for shipping in both directions before the situation is fully resloved. The barriers to entry are extrememly high in the retail market due to the amount of work that must be done and money that must be spent before even opening the store to the first customers. From the building that is used to the goods that must stock the shelves to the training of employees and the negotiations with suppliers to ensure that merchandise continues to flow into the store to be sold. Then once the store is ready it must be advertised so that there are customers to purchase the goods and possibly promotions to initially draw them into the store. This is difficult for a single store and applified for the chain of stores that would be needed to to be price competative with Target while still generating profit. Targets customers are the most important of the five forces when it comes to the industries competativness. The customers are very strong in this relationship because of the market conditions. The high level of saturation in the market with so many stores that each carry many of the same products allow customers to choose based on price and service. These two factors are inversely related and a store that offers better more complete service to customers may be able to charge slightly higher prices without losing many of its customers. Although in poor economies the price is a primary factor, customers still expect a minimum level of service when they go shopping. The high power of consumers leads to a high level of competition despite the high barriers to entry and the weakness of the suppliers. The small number of large competitors means that they must each maintain an advantage in some aspect in order to retain their customers or possibly to grow. This force from the buyers drives low margins up the supply chain as each level must reduce costs to remain competative.