Question

what are the threat of new entrants for target corporation?

Answer 1

Target corporation is a prominent player in the discounted retail segment and shares the pie with likes of WalMart, Costco and K Mart. The segment is characterised by intense rivalry between the players, highly efficient supply chains and economies of scale that enable these players to provide the highest value to their customers at very competitive prices and an ability to retain the customers and remain competitive.

The nature of industry requires any new player to invest heavily, build a network of suppliers and distributors to achieve efficiency and cost effectiveness and reach the economies of scale, the service level and brand value to the level of established players like Target to be competitive in this heavily contested industry. The task can only be taken successfully by an overseas retail giant that has experience, expertise, local knowledge and financial muscle to put a substantial challenge, which makes the threat of new entrants moderate.