Description of Firms
The paper will use the generic strategy model to analyze the success of three retail firms namely, Walmart.com, Target and Kroger based on their strategies. The three firms are American based firms whose performances have been exemplary probably because of their superb implementation of the three strategy models.
Walmart is a retail store comprising of an online sales platform and neighborhood stores. Its famous subsidiary, Walmart.com was founded in 2000. The headquarters is based near the Silicon Valley at the city of San Francisco Peninsula. It is a company that promotes it products majorly through her online platform. Its strategic plan is based on the philosophy of making the customer be the number one. They believe at serving the interests of the customer first, a belief that was installed and incorporated in the cultural values by the founder of the firm, Sam Walton (1918-1992).
Kroger is a worldwide retail firm based in the USA and it was founded by Barney Kroger in 1883, in a street at Cincinnati. The founding philosophy of the company was never to sell anything that you would not wish to have yourself. The company believes in embracing values such as respect, inclusion, safety, honesty integrity and diversity in the process of fulfilling’s their commitments to their customers. The grocery retail firm has since grown to become one of the largest and the top earning firms worldwide.
Target is a Canadian based retail firm that focuses in the design and sale of households. It has got a rich history that dates back top 1881 when it was founded by George Dayton. It was founded on the philosophy of stewardship and proper management and has revolutionized her plans to settle on a stronger and more relevant premise of achieving great designs at a low cost. Its low cost policy has seen it to a successful progress over time.
Strategies Used
Target uses the low-cost production strategy. Just as their slogan goes, “Our Promise is Simple: Expect More. Pay Less,” they are committed to increasing their sales and penetrating the markets through lowering their prices and making good designs. Kroger is a niche supplier. Although they have branches worldwide, they target a specific group of customers in a specific geographic location with personalized demands. Finally, Walmart uses the differentiation strategy. It has a lot of products that are unique and that aim to satisfy the unique needs of each customer worldwide.
Tactics Used by the Retailers
Walmart strategy of differentiation can be evidenced by the uniqueness and the number of her products. The firm stores over 1,000,000 unique products in her stores. The firm eases the access to the products through implementing e-commerce where the customers with unique demands can be able to choose their desired products before picking them up at the local stores. The company has strong marketing skills and efficient customer support. It also lays emphasis on the innovation of her products as opposed to the process innovation. This ensures that the products are well customized to differentiate them from any other products around.
Target’s cost leadership strategy can be evidenced by her emphasis on low costs as it is stipulated by her slogan of “pay less, expect more.” The firm invests a lot in new technology that can enable them to produce products in large scale at a lower cost. They have also invested a lot in developing their processes as evidenced by their partnership with great designers. They, therefore, enjoy economies of scale due to their continuous investment in process innovation and new technology.
Kroger’s implementation of the Focus or Niche strategy is evidenced by their mode of creating their departments. The firm offers different store formats that conveniently satisfy the demands of her customers. It has supermarkets, market stores, multidepartment stores and fine jewelry stores. Focus can therefore be directed to a specific niche of customers across the world. Their major products are the groceries, the floral products and the jewelry. The niche strategy is also evidenced by the idea of them being in only 31 countries worldwide. Their focus is therefore narrowed to the supply of goods to their niches instead of supplying to other locations.
Evidence of Success of the Tactics
The successes of the firms discussed above are based on their implementation of the respective strategies. The strategies seem to be working well, because the companies ranked top according to the store’s magazine of July 2013 (Schulz, 2013). Walmart topped the list with annual earnings of $467,896,000, representing a sales growth of 4% from the previous year. Kroger followed closely with an increased sales of 6.6% and a record of sales of $92,165,000 across the world. Target came third with an increase of 5.1% in sales and $71,960,000 worth of sales worldwide. The performances of these top ranking retail firms are clear evidence that their strategies are fit for their operations.
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