Target’s Value-creating Diversification
It should be argued that Target could increase its level of value-creating diversification for all stakeholders when the benefits of diversifications exceed its costs. The famous retail chain enjoys its reputation as an innovator in offering value-creating diversification and differentiation strategies such as ‘design partnerships’ and ‘Target owned and exclusive brands’ to establish enhance its niche market and effective customer relationships. The researcher would like to suggest Target Corporation to extend the launch of ‘owned brands’ in all major sectors, especially household essentials, food, apparel & fashion accessories, home furnishings and décor. The reason behind this suggestion is the fact that the aforementioned product categories have approximately 80% share in nearly $70 billion sales across USA (out of total $73 billion). Although, the top ten Target owned brands (for example Simply Balanced and Threshold) attract more than $10 billion sale; however, an extension in exclusive brands range (for existing and new products) will further increase Target’s value-creating diversification for customers who could enjoy high quality products at highly discounted prices in challenging market conditions. It should be emphasized that US customers now look for higher discounts for optimal quality products due to declining real incomes and spending power. Hence, the launch of privately owned brands is an effective strategy in reducing competitors’ share as well as creating a value-creating niche in fiercely competitive US market. Finally, the owned brands will have relatively higher profit margins unlike selling products offered by other companies; therefore, it may generate a reasonably positive impact on Target’s bottom-line (Corporte Target, 2014).
Evaluation of Victoria Motorcycles’ Business Strategy and Recommendation
Polaris Industries launched Victory Motorcycles across USA in 1998 as an attempt to compete with top motor vehicle giant Harley Davidson. Since its very inception, the Victory Motorcycles has substantially underperformed due to weak new product innovation (motorcycle designs and features), lack of using sophisticated engineering techniques for premium quality, differentiation marketing, brand recognition and value-addition. Although the company offers a wide range of brands under three core categories such as Baggers, Vision Touring and Cruisers to meet unique tastes and preferences of bike riders for long drives, sports and touring. However, the company is still findings its ground to successfully tempt youth segment (young adults) to carve out its own strong niche and market presence by producing good quality efficient vehicles at reasonable prices. Nonetheless, the company is facing stiff competition with Harley-Davidson (sales above $5 billion) to grab some additional market share and increase sales level to $400 million. Victory Motorcycles is, indeed, a loss-making unit for Polaris so far; therefore, the company has extending its product base and building an aggressive marketing strategy to enhance awareness among existing riders and attract new ones. For example, Polaris has introduced Slingshot and Indian Motorcycles more recently, which successfully attracted several dealers across USA and Canada to push sales volume (Stock, 2014). Overall, the researcher believes that the aforementioned new business strategy is appropriate to offset forces in the industry and may develop a niche market for Polaris. The recommendation for improving above strategy is to build a strong dealership network and use an aggressive promotional strategy to convert Harley-Davidson dealers and riders. The company should focus on Push strategy in short term rather Pull strategy because it can’t afford increase in mass media advertising and overall costs of doing business that may otherwise escalate existing losses (Hagerty, 2014).
Corporate Target (2014). Our Owned Brands. Target.com [Online] Available at https://corporate.target.com/annual-reports/2013/business/expect-more-pay-less
Hagerty, James R. (2014). Polaris Throws Down Against Mighty Harley-Davidson. Wall Street Journal [Online] Available at http://online.wsj.com/articles/polaris-throws-down-against-mighty-harley-davidson-1407185344
Stock, K. (2014). Indian Motorcycles Finally Rev Up to Speed for Polaris. Business Week [Online] Available at http://www.businessweek.com/articles/2014-01-28/indian-motorcycles-finally-rev-up-to-speed-for-polaris