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The Competitive Advantage

Fab Five

College of Integrative Sciences and Arts, Arizona State University

OGL 355: Leading Organizational Innovation and Change

Dr. B

April 7, 2021
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The Competitive Advantage

Target’s competitive advantage includes their ability to create a diversified and inclusive

culture. This paper will take a deeper dive into how Target dominates their competitors with the

creation of a welcoming environment that includes a wide range of products at a competitive

price and an overall amazing customer experience (Kuang, 2020).

Competitive Advantage Is…

Competitive advantage is a specific factor or business operation that puts an organization

in a favorable or superior position. Competitive advantage is being able to provide value that is

difficult for a competitor to imitate which helps the company narrow down exactly what their

competitive edge will be. Culture and the environment created by an organization can set the

tone as well as create a comfortable and welcoming environment where the guests want to return

continuously.

Discovering the competitive advantage gives the organization primacy over their

competition to produce sustainable profits at a continuous rate. This dominance is one of the

things that an individual thinks about when they hear the name of the company. Being able to

identify the aspects of a company that considers themselves valuable, rare, and hard to imitate, is

just the beginning. The organization must be able to recognize and assemble the aspects in order

to make the most of their possibilities. Without the capability of exploiting that aspect of the

organization, or making the aspect hard to imitate, the company can struggle to maintain that

competitive edge.

Competitive Advantage and POV

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Target’s main competitive advantage is creating a culture and environment that

customers easily recognize and remember. With competitors offering similar products for low

prices, Target stands out by being a trusted brand that creates a culture which provides a sense of

comfort for customers knowing that they will be welcomed into the store to find specific items

and brands that they enjoy. Target discovered, through its vast knowledge of department stores,

that strengthening relationships and putting the needs of the people and communities is at the

heart of their business (Target Corporation, 2020). Target combines some of the best department

store features - fashion, quality, and service, with the low prices of a discounter (Target

Corporation, 2020). Creating more than just a shopping visit, the culture at Target is amusing and

welcoming for the entire family.

Target’s competitive advantage view is that of the industrial organization view (I/O).

This approach explores the external factors for Target, how they position themselves

competitively, how they expand resources to stay updated with the external environment, and

they differentiate themselves among competitors. An external focus is on Target’s positive

culture and inclusive experiences. Characteristics of the discount retail industry include

providing customers with a wide range of products at competitive prices and relying on offering

essential goods to consumers (Kuang, 2020). Target holds a strong position within its industry

with these offerings along with a welcoming environment. Target differentiates themselves in

that they are an established brand which has been operating for over a century, the culture they

create, and their inclusivity value (Nolen, 2010).

Rationale

Target starts to build their culture the moment an individual walks into the door. The

customer gets greeted by an individual who welcomes them into the store and appears to be
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genuinely happy that the customer is there. The individual who greets every customer is ready to

help in any way they can. This initial greeting can help set the tone for an individual as they go

through their shopping experience by leaving a lasting impression on the shopper. This

experience does not stop at the door, the customer also gets the welcoming experience as they

walk through the store, easily catching a glimpse of a noticeable employee walking around with

a smile. “We tend to mimic the smiles or frowns of others because it helps us better understand

what other people are feeling, allowing us to respond appropriately” (Howard, 2016). This

atmosphere helps create a welcoming and accepting environment for everyone.

Even though Target’s competitors all offer similar products at a discounted rate, creating

that environment helps the shopper feel like they are at home and helps to differentiate Target’s

stores from their competitors. A customer can walk into any local store, purchase the products

and leave without the store making an impression on them; however, when the customer gets that

experience, like the one created while shopping at Target, it becomes a lasting impression and

helps to build a loyal customer base. With 75% of the U.S. population living within 10 miles of a

Target store, the creation of the positive environment allows Target to become capable of

building that loyal customer base, which helps Target to achieve higher profit margins (Target

Corporation, 2018). Part of that atmosphere that the customer enjoys also comes with knowing

that the customer will be purchasing a high-quality product at an affordable price.

Another aspect that helps to differentiate Target from their competitors is by embracing

and encouraging diversity among its employees and customers. CEO of Target Corporation,

Brian Cornell, stated “...everyone is welcome at Target. Diversity and inclusion are at the heart

of what we do — not only because we believe in doing what’s right, but also because we believe

it’s good for our business, our team and the communities we serve.” (Cornell, 2018, para. 1). By
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preserving this attitude for inclusion, customers feel more welcomed and accepted as they enter

the stores. This acceptance increases the likelihood of the customer being more inclined to

return. In addition to encouraging inclusion for customers and employees, Target also strives for

diversity among its suppliers to encourage local business. According to the Target Corporation

website, “...we spent almost $1.5 billion with diverse suppliers in 2020 and are on track to meet

our goal” (2020, para. 14). By actively embracing diversity and striving for equality, the Target

Corporation can remain relevant, adaptive, and motivated to make progress.

Conclusion

Throughout this paper, Target’s competitive advantage was dissected and discussed

through an industrial organization view. In this strategic view, Target puts great emphasis on

maintaining a positive culture and experience. This paper also discussed the rationale of Target

and how important the workers and diversity are for Target. By influencing the shopper in a

tremendously useful and beneficial way, Target’s employees and culture help to construct the

lasting impression that helps to build the loyal customer base.

Each team member must update the name to those on the team and provide initials,

confirming and agreeing to “Competitive Advantage” stated above.

APPROVAL: (sign off with initials by 12pm AZ time 3/24/2020) - plan to submit by 1-
2pm 3/24/2020

Shelby Loftin Lamar Valentina April Miles Justin Hall Ajane Davis
SL LV AM JH AD
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References

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Howard, J. (2016, February 16). Smiling really is contagious, and here's why. Retrieved from

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competitors.asp#:~:text=Target's%20main%20competitors%20are%20Walmart,price

%20than%20Walmart%20and%20Costco.
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