FOREIGN TRADE UNIVERSITY HCMC CAMPUS

DEPARTMENT OF ECONOMICS AND LAW

---------o0o---------

GROUP 5
REPORT ON THE COMPARISON BETWEEN THE MARKETING
STRATEGIES OF WALMART VS. TARGET
Mid-term Assignment – Principles of Marketing
Academic year: 2023 – 2024

Grade (in number) Grade (in words)

Examiner 1’s signature Examiner 2’s signature

Invigilator 1’s signature Invigilator 2’s signature

Course code: MKTE302

Class code: ML146
Lecturer: Ms. Nguyen Thi Thu Thao
Student 1: Nguyen Tran Lien Nhi – 2212255033
Student 2: Ngo Le Hao Nhien – 2212255036
Student 3: Ho Xuan Nguyen – 2213255061
Student 4: Cao Minh Anh – 2215255072
Student 5: Nguyen Le Thao Phuong – 2212255040
Student 6: Vo Kieu My – 2215255073
Student 7: Pham Vu Minh – 2212255026

HO CHI MINH CITY, MARCH 21, 2024

 Table of Contents

1. Executive Summary 6
1.1. Background 6
1.1.1. About the Industry 6
1.1.2. About the Competitors 6
1.2. Content Coverage 11
1.2.1. Report Objectives and Main Parts 11
1.2.2. Tools to Use for Analysis 11
1.2.3. Findings 12
1.3. Conclusion 12
2. Situation Analysis 12
2.1. Market Summary 12
2.2. Market Growth 13
2.3. Market Trend 15
2.4. Some Macro-Environmental Factors That Have Impacts on the Business 16
2.4.1. Walmart 16
2.4.2. Target 18
2.5. Competition (Market Share) 21
3. Company Introduction 22
3.1. Walmart 22
3.2. Target 24
4. Marketing Strategy 26
4.1. Target Market 26
4.1.1. Customer Portrait (Demographics) 26
4.1.1.1. Walmart 27
4.1.1.2. Target 28
4.1.2. Pain points 29

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 4.1.2.1. Walmart 29
4.1.2.2. Target 30
4.1.3. Critical Success Factors 31
4.1.3.1. Walmart 31
4.1.3.2. Target 32
4.2. Value Chain Comparison Among Competitors 33
4.2.1. Value Chain 33
4.2.1.1. Primary Activities 34
a) Inbound Logistics 34
b) Operations 37
c) Outbound Logistics 40
d) Sales and Marketing 42
e) Service 45
4.2.1.2. Support Activities 47
a) Firm Infrastructure 47
b) Human Resources 49
c) Technological Development 52
d) Procurement 54
4.2.2. Core Competences 56
4.2.2.1. Walmart 56
4.2.2.2. Target 57
4.2.3. Competitive Advantages 58
4.3. Positioning 61
4.3.1. Points of Parity (POP) 61
4.3.2. Points of Differences (POD) 62
4.3.3. Value Proposition 62
4.3.4. Perceptual Map 64

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 4.3.5. Brand Mantra 64
4.4. Marketing Mix 64
4.4.1. Product 65
4.4.1.1. Walmart 65
4.4.1.2. Target 66
4.4.2. Price 69
4.4.2.1. Walmart 69
4.4.2.2. Target 70
4.4.3. Place 73
4.4.3.1. Walmart 73
4.4.3.2. Target 75
4.4.4. Promotion 76
4.4.4.1. Walmart 77
4.4.4.2. Target 78
5. Conclusion 78
5.1. Walmart 79
5.2. Target 79
References 80

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 List of Figures

Figure 1. Leading retailers worldwide in 2021, by retail revenue 7

Figure 2. Number of Walmart stores worldwide from fiscal year 2008 to 2023 8

Figure 3. Number of Target stores in the United States from financial year 2006 to 2022 9

Figure 4. Quarterly Target Gross Profit Margin 10

Figure 5. Quarterly Walmart Gross Profit Margin 10

Figure 6. Total retail sales in the United States from 1992 to 2023 14

Figure 7. Total retail sales worldwide from 2021 to 2026 15

Figure 8. Market share of leading retail e-commerce companies in the United States in 2023 22

Figure 9. Who is shopping at Walmart and what are they like? 27

Figure 10. Who is shopping at Target and what are they like? 28

Figure 11. The generic value chain 34

Figure 12. Top online stores in the Personal Care segment in the U.S. in 2022, by e-commerce
net sales (in million U.S. dollar) 67

Figure 13. Retailers on top of the E-commerce sales in the Furniture and Appliances Segment,
2022 68

Figure 14. Target vs Walmart Grocery Price Comparison on over 30 Common Groceries 71

Figure 15. Price comparison of LEGO Star Wars The Mandalorian Helmet Model 75328 at
Walmart and Target 72

Figure 16. E-Commerce net sales of target.com from 2014 to 2022 75

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 List of Tables

Table 1. Revenue, cost and profit of Walmart 2021-2023 24

Table 2. Revenue, cost and profit of Target 2021-2023 26

Table 3. The VRIO framework 58

Table 4. Walmart’s and Target’s competitive advantages 59

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1. Executive Summary

1.1. Background

1.1.1. About the Industry

According to the Australian Bureau of Statistics (2019), the retail trade industry is
defined as any business unit mainly engaged in the process of providing goods to final
consumers through the actions of purchasing and on-selling items in shops, online, and
by commission to the general public without significant transformation. Retailers are
business-to-consumer (B2C) companies. This article also includes the definition of the
wholesale trade industry, which best describes business entities mainly engaged in
purchasing goods from suppliers and then on-selling them to other businesses, such as
retailers, without significant transformation. In other words, they are business-to-business
(B2B) organizations. The two together are indispensable because they represent the
distribution sector of the economy.

The global retail industry is in a state of flux, marked by explosive growth and market
evolution driven by innovative strategies, emerging technological advances, and shifting
dynamics. The Russia-Ukraine conflict has hampered the rate of intercontinental
recovery from the COVID-19 pandemic and triggered further inflation across goods and
services, detrimentally affecting many markets worldwide. Suffering from economic
sanctions, several national policies have brought out regulations on supply chain changes
as well as a surge in commodity prices (Rashad et al., 2023). However, the retail and
wholesale business have witnessed continuous escalation in recent years. Based on the
compound annual growth rate (CAGR) of 7.7%, the retail and wholesale market is
expected to grow from $78,335.27 billion in 2023 to $84,328.43 billion in 2024. It is
forecasted to reach $110,851.77 billion by 2028 at a CAGR of 7.1% (The Business
Research Company, 2024).

1.1.2. About the Competitors

In today's economic landscape, competition is inevitable and is also a way to help

corporations survive and develop in the fierce marketplace. Setting up a correct and

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reasonable competitive strategy is a vital roadmap for businesses to win in competing
with rivals. As for the retail industry, brand image and customer loyalty always play a
pivotal role in the economy. However, competition on brand identity and positive
feedback should not be and cannot be separated but should be combined to bring the best
results to the business in terms of both reputation and revenue (Ene & Ozkaya, 2014).

Figure 1 (Sabanoglu, 2023) represents the brands knocking on the door of the budding
retail risers within global portfolios.

Figure 1.

Leading retailers worldwide in 2021, by retail revenue

Note. From Leading retailers worldwide in 2021, by retail revenue, by T. Sabanoglu,

2023
(https://www.statista.com/statistics/266595/leading-retailers-worldwide-based-on-revenu
e/).

Walmart was founded in 1962 by Sam Walton and headquartered in Bentonville,

Arkansas, has been considered as one of the most well-known and valuable retailers in
the world.

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Figure 2.

Number of Walmart stores worldwide from fiscal year 2008 to 2023

Note. From Number of Walmart stores worldwide from fiscal year 2008 to 2023, by T.
Ozbun, 2023.
(https://www.statista.com/statistics/256172/total-number-of-walmart-stores-worldwide/).

Walmart’s eCommerce empire, which it has heavily invested in over the last five years to
compete with Amazon, was just starting to pick up steam before the pandemic began.
Walmart CFO Brett Briggs said: “It is a big advantage being an omnichannel retailer and
I think that is showing right now. We were able to quickly use stores to fill online orders.”

Attracting the customers by offering daily essentials at low prices is one of Walmart’s
main strategies (Pant, 2022). On the way to being a low-cost leader in the retail industry,
they provide a broad assortment of quality merchandise and services at everyday low
prices (EDLP). EDLP is the company's pricing philosophy under which it prices items at
a consistently low price over a long-time horizon. The company's dedication to keeping
costs under control so that cost savings can be transferred to customers is known as
Everyday Low Cost (EDLC). Those two strategies together help Walmart earn a
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competitive advantage and the trust of its customers throughout the time since it was
founded (Walmart, 2013).

One of Walmart’s formidable competitors is Target Corporation when it comes to

low-cost retail stores with gigantic revenues. First established in 1902 and finally
changed its name in the year 2000, Target Corporation is an American retailer and it
ranks just a few places behind Wal-Mart, the brick-and-mortar chain of retail companies.

The company operates primarily in the United States, as it opened many stores in the
Canadian market but then had to close all in 2015.

Figure 3.

Number of Target stores in the United States from financial year 2006 to 2022

Note. From Number of Target stores in the United States from financial year 2006 to
2022, by P. Smith, 2023
(https://www.statista.com/statistics/255965/total-number-of-target-stores-in-north-americ
a/).

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Walmart is a lot bigger than Target; however, Target runs large stores as well. What they
focus more on are profit margins through the supply chain, which is why they are able to
post lower revenues but higher gross profit margins and operating margins. According to
Target (TGT) - Operating Margin (2024) and Walmart (WMT) - Operating Margin
(2024), Walmart’s Operating Margin as of February 2024 is 2.78%, while that of Target is
3.08%.

Figure 4.

Quarterly Target Gross Profit Margin

Note. From Target Gross Profit Margin (Quarterly), YCharts, 2023

(https://ycharts.com/companies/TGT/gross_profit_margin).

Figure 5.

Quarterly Walmart Gross Profit Margin

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 Note. From Walmart Gross Profit Margin (Quarterly), YCharts, 2023
(https://ycharts.com/companies/WMT/gross_profit_margin).

1.2. Content Coverage

1.2.1. Report Objectives and Main Parts

- Identify the two famous competitors in the retail industry - Walmart Inc. and Target
Corporation.

- Analyze business strategies related to the report topic through some specific operating
and marketing models (4Ps).

- Compare those of the companies, comment on the optimality and the link in their system;
and make recommendations (if any).

The report will go through 4 main parts:

Part 1: Situation analysis.

Part 2: Company introduction.

Part 3: Market strategy and comparison.

Part 4: Conclusion and recommendations.

1.2.2. Tools to Use for Analysis

Based primarily on the conceptual model, this paper explores the main features of the
general market as well as the tendency of the retail and wholesale industry. After
collecting information following the above measures through reliable sources such as
Statista, company periodical reports and websites, the group will apply a contrastive
competitor analysis of some certain parts in operating systems between Walmart and
Target where mix and match between each other will be presented for a meaningful and
concise conclusion. The 4Ps marketing model will also be dug deeper in order to clarify
brand success of the two companies.

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 1.2.3. Findings

As for the competitive advantages, this report first evaluates the competitors’ resources
and capability through the VRIO model, then compares their competitive advantages
based on supply chain, buying power, technology, product portfolio, global and local
presence whether each of the V, R, I, O is founded. Finally, we decide which competitive
implications they have.

On the other hand, regarding value proposition, as a retailing company, Walmart and
Target have shown their effort to develop a customer-centric value strategy, which is
delivered by the statement and responsibility they give to the community. Walmart
promises to satisfy consumers around the demand for affordability, accessibility, and
convenience. Target's value proposition is characterized by a one-stop destination,
quality, also affordability, and convenience. All of those, together help Walmart and
Target successfully stand a position in buyers’ preferences.

1.3. Conclusion

In fact, both brands have their own operating strategies that make them possess the
potential to become ‘king’ of the retail industry. However, as mentioned above,
competition between businesses is indispensable in the modern market economy in
general and the retail industry in particular. Without a reasonable roadmap, it will not be
possible to survive, and the brand will slowly wither away at the hands of competitors.
Therefore, this report will analyze aspects of the business strategy of Walmart compared
to Target, which is one of their most potential competitors. Afterward, we consider
whether it is adapted for modern times and the increasing demand of consumers.
Moreover, there is a recommendation if there is a better plan they can launch to overtake
the counterpart.

2. Situation Analysis

2.1. Market Summary

According to Deloitte (2024), half of retail executives anticipate consumers prioritizing

price over loyalty, a sentiment supported by the popularity of the new e-commerce

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discount app, Temu, which became the most downloaded iPhone app in the United States.
Additionally, two-thirds of retail executives predict that inflation-weary consumers will
reduce their purchases, a concern shared by consumer packaged goods (CPG) companies
as they shift focus to profitable volume amidst pricing pressures. While many CPG
companies have managed to raise prices in recent years, this strategy may have reached
its limit.

The most recent retail industry report also highlights strong investment activity,
indicating a dynamic financial environment within the sector (Retail Industry Report:
2024 Industry Data & Insights, 2024). With an average investment value of USD 48
million per round, the industry is flourishing, showcasing considerable investor
confidence. This level of investment is distributed among a large number of stakeholders,
with over 18,000 investors participating in the retail space, as mentioned by Retail
Industry Report: 2024 Industry Data & Insights (2024).

Additionally, the sector's vitality is highlighted by the closure of more than 62,000
funding rounds, which reflects a vibrant environment for securing crucial capital among
both startups and established companies (Insights, 2024). These rounds have supported a
diverse array of over 23,000 companies, showcasing a healthy distribution of funds and a
willingness to back various retail enterprises (Retail Industry Report: 2024 Industry Data
& Insights, 2024).

2.2. Market Growth

As of the end of 2023, total retail sales have reached approximately 7.24 trillion U.S.
dollars, marking a notable increase of around 1.5 billion U.S. dollars compared to the
previous year, as shown in Figure 6 (Sabanoglu, 2024a). This upward trend in retail sales
has been consistent since 2009, signifying the economic recovery from the recession
following the 2007-2008 financial crisis. Moreover, the retail sector has demonstrated
resilience and growth, overcoming challenges such as the recent impact of the
coronavirus (COVID-19) crisis (Sabanoglu, 2024a).

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Figure 6.

Total retail sales in the United States from 1992 to 2023

Note. From Total retail sales in the United States from 1992 to 2023, by T. Sabanoglu,
2024a
(https://www.statista.com/statistics/197576/annual-retail-sales-in-the-us-since-1992/).

In 2024, the global retail sales are projected to continuously rise up to the point of 30.57
trillion U.S. dollars (Sabanoglu, 2024b). Anticipated to reach approximately 32.8 trillion
U.S. dollars by 2026, global retail sales are expected to show growth from around 26.4
trillion U.S. dollars in 2021. The retail industry spans the entire lifecycle of a product or
service, starting with manufacturing and concluding with consumer purchase from a
retailer. Retail establishments take diverse forms, including grocery stores, restaurants,
and bookstores (Sabanoglu, 2024b).

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Figure 7.

Total retail sales worldwide from 2021 to 2026

Note. From Total retail sales worldwide from 2021 to 2026, by T. Sabanoglu, 2024b
(https://www.statista.com/statistics/443522/global-retail-sales/).

2.3. Market Trend

In the ever-evolving retail sector, businesses are navigating shifts influenced by emerging

trends that greatly affect the utilization of location intelligence in decision-making (“10

Must-Know Retail Industry Trends for 2023,” 2023). The proliferation of e-commerce, a

growing focus on environmental sustainability, and the widespread adoption of buy

online pick up in-store (BOPIS) options are pivotal factors reshaping considerations for

store locations, inventory management, and marketing strategies within the retail

industry.

Experiential retail has emerged as a direct response to evolving consumer preferences,

shifting away from a purely transactional shopping experience (“10 Must-Know Retail
Industry Trends for 2023,” 2023). Modern consumers are now actively seeking more
engaging, entertaining, and emotionally connected interactions with brands. The essence

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 of experiential retail lies in crafting immersive and memorable experiences that foster a
deeper connection between customers and a brand, ultimately encouraging prolonged
in-store engagement.

Moreover, the retail landscape is witnessing a rising integration of artificial intelligence

(AI) and machine learning (ML) into its operations, as mentioned by Mapsted (2023).
Examples such as chatbots, personalized experiences, and predictive analytics showcase
how these technologies enhance the overall shopping experience. By analyzing extensive
data sets and predicting consumer behavior, retailers can provide personalized
recommendations and promotions, thereby enhancing customer engagement and fostering
loyalty. The ongoing evolution of AI and ML promises an exciting future with profound
implications for the retail industry (Mapsted, 2023).

Plus, according to Angus (2024), customers are demanding more accountability from
organizations regarding their environmental commitments. Similarly, a recent white paper
on influencer trends from Ogilvy highlighted that fans are becoming increasingly
discerning, scrutinizing both brands and influencers for greenwashing practices (Erdly,
2024). Essentially, consumers in 2024 are experiencing "green fatigue," feeling
overwhelmed by the urgency of climate issues while questioning the impact of their
purchasing decisions. There's a growing awareness of the need for genuine sustainability
efforts rather than superficial green marketing tactics (Angus, 2024).

2.4. Some Macro-Environmental Factors That Have Impacts on the Business

2.4.1. Walmart

About political factors, Walmart, operating in the United States and globally, is impacted
by various political and legal factors. Marcilla and Gordon (2014) stated that in the U.S.,
the unique political system, characterized by strong presidential influence, a divided
legislature, and a dominant two-party system, shapes the regulatory environment.
According to Pestle Analysis of Walmart (2023), compliance with diverse government
regulations is crucial for Walmart's success across different countries. Political stability is
vital for fostering a favorable business climate. Tax policies, including rates and
regulations, can significantly affect Walmart's profitability and expansion plans. Changes
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in trade policies influence the global supply chain and sourcing strategies. Additionally,
compliance with labor laws is essential for effective workforce management.
Understanding and navigating these political factors is imperative for Walmart to ensure
regulatory compliance and operational success in its diverse markets.

Walmart's operations are also significantly influenced by economic factors, particularly in

a volatile economy (Frue, 2020). The retailer, known for its low prices, faces challenges
if economic instability necessitates an increase in production costs, potentially leading to
higher prices for goods. Striking a balance is crucial, as raising prices may impact
customer satisfaction and competitiveness. According to the research, in the face of
economic downturns, consumers often prioritize necessities over discretionary spending,
affecting the demand for Walmart's diverse product range. Additionally, economic
conditions can vary across locations, requiring Walmart to adapt to diverse landscapes
with differing interest rates and taxes, influencing overall revenue potential, as mentioned
by Frue (2020). Navigating these economic facets is essential for Walmart to sustain its
competitive pricing strategy and operational success amid economic fluctuations.

Walmart's operations are shaped by key social factors, with the U.S. consumer
characterized as powerful and demanding, requiring continuous engagement (Marcilla
and Gordon, 2014). Stated by Rowland (2023), social media trends promoting a healthier
lifestyle underscore the need for Walmart to expand health-friendly product options. The
emphasis on cultural diversity as a societal value requires Walmart to celebrate and
embrace this spectrum in its offerings (Rowland, 2023). The research also makes a
statement that ongoing migration from rural to urban areas impacts consumer demand
patterns, prompting Walmart to adapt business strategies accordingly. Navigating these
social dynamics ensures Walmart remains agile, resonates with evolving consumer
preferences, and stays relevant in the dynamic retail market.

Additionally, it is emphasized by Walmart PESTLE Analysis (2020) that the recent

initiatives by Walmart highlight its strategic focus on technological advancements. The
introduction of a mobile application enhances the customer shopping experience,
allowing them to track nearby Walmart stores, peruse available goods, and compile
shopping lists. Demonstrating a commitment to technological innovation, Walmart has
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 deployed robots in 50 stores to efficiently manage tasks like stock control and pricing.
Moreover, the implementation of the "Fast Unloader" automated system for unloading
goods and managing inventory contributes to heightened operational efficiency (Walmart
PESTLE Analysis, 2020). These initiatives showcase Walmart's proactive approach,
leveraging technology to streamline operations, elevate customer engagement, and ensure
competitiveness in the ever-evolving retail landscape.

The evolving consumer profile, with a growing awareness of ecological issues, has led to
a shift in consumer behavior towards making more conscientious decisions based on
lifestyle preferences and a sense of environmental responsibility (Marcilla and Gordon,
2014). Concerns about conservation, deforestation, energy usage, waste management,
pesticide use, and pollution are increasingly influencing consumer preferences. In the
context of Walmart's Analysis from Walmart PESTLE Analysis (2020), environmental
factors play a significant role. The company has undertaken substantial sustainability
measures, aiming to derive 50% of its energy from renewable sources by 2025 and
redirecting 78% of its waste away from landfills. However, there are conflicting reports
suggesting that only 4% of Walmart's energy is currently generated from renewable
sources (Walmart PESTLE Analysis, 2020). As customers increasingly prioritize
eco-friendly practices, it becomes crucial for Walmart to align its actions with its
sustainability goals to maintain consumer trust and enhance its business performance in
the ever-changing market landscape.

2.4.2. Target

According to Target Corporation PESTEL / PEST and Environment Analysis (2019),

political factors are pivotal in shaping Target Corporation's long-term profitability, given
its operations in the Discount and Variety Stores industry across diverse countries.
Target's commitment to becoming America's favored destination for a valuable customer
experience is evident in its global expansion strategy, including the launch of an
international website reaching shoppers in 200 countries (PESTEL Analysis of Target,
2019). However, the company's strong political ties with China, a key supplier, have
become vital. The ongoing U.S.-China trade war has introduced uncertainty and
complexity, affecting Target's business. Navigating these political challenges is crucial for
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Target to adapt and maintain its business interests and long-term viability. In addition,
Target faces the potential challenge of product recalls and associated liabilities, given the
safety concerns for consumers. It is crucial for the company to maintain a stringent
approach in minimizing food and drug contamination risks, especially within their
produce and pharmacy sections (Frue, 2017). Maintaining a proactive stance in
addressing these issues is essential to uphold consumer safety and trust.

Regarding economic factors, Target Corporation's financial health has shown resilience,
with a steady growth trajectory despite a 2016 decline linked to the sale of its pharmacy
and clinic business (PESTEL Analysis of Target, 2019). Notably, 2018 revenue reached
$75,356 million, growing by 3.6%, with discrete tax benefits contributing $36 million
and $343 million in 2018 and 2017, respectively. The strategic investment in short-term
securities aligns with the management of long-term debt obligations. Facing robust
competition, especially from Walmart and dollar stores, Target's pricing analysis becomes
pivotal for market positioning and profitability. Simultaneously, as resulting from the
research of Frue (2017), the company's performance is intertwined with the American
economy, where it stands as a significant shopping choice. Despite challenges in its
Canadian expansion leading to store closures and a $5.4 billion loss in 2015, Target's
strategic exit from the Canadian market showcases prudent decision-making in response
to economic difficulties, emphasizing the importance of adaptive strategies in navigating
the dynamic retail landscape.

Target Corporation's social factors significantly contribute to its positive company culture
and consumer support. The emphasis on fostering a positive work environment and
community engagement sets Target apart, resonating well with consumers who appreciate
the company's treatment of employees and community contributions (Frue, 2017).
Target's diverse product offerings, including a wide selection of hair styling products for
African American hair, showcase an inclusive approach that caters to various ethnicities.
Mentioned by PESTEL Analysis of Target (2019), the company's commitment to creating
a positive shopping experience is evident through its 40 distribution centers serving 1862
stores across the U.S., emphasizing a corporate culture that prioritizes employee
satisfaction and teamwork. Target's dedication to high expectations and global

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responsibility reinforces its reputation as a respected firm worldwide. By engaging
employees in creating memorable customer experiences, Target ensures a friendly and
enjoyable shopping atmosphere, further reflecting the company's values of inclusivity and
respect for diversity (PESTEL Analysis of Target, 2019).

Furthermore, Target Corporation places a significant emphasis on technological

advancements, as evident in substantial investments totaling $7 billion in capital and an
additional $1 billion annually for operating expenses to modernize operations and
remodel stores, as indicated by Team (2019). The focus is on integrating current
technologies to optimize supply chain efficiency, ensuring scalability and increased
speed. The commitment extends to the development of enterprise data and analytics for
targeted marketing and personalized customer experiences. In the realm of social media,
Target actively engages with consumers on various platforms like Twitter, Facebook,
Instagram, Linkedin, and Tumblr, showcasing its commitment to technological and social
media savvy strategies (Frue, 2017). Leveraging user-generated content and offering
exclusive deals through multiple channels, including print, website, and email, Target
adeptly employs technology to connect with users online, enhance customer engagement,
and uphold its commitment to a fulfilling customer experience (Frue, 2017).

As reported by PESTEL Analysis of Target (2019), this corporation is actively committed

to environmental sustainability, striving to source all its energy from renewable sources
by 2030 for stores, distribution centers, and corporate offices. Investments in solar and
wind energy projects like the Lone Tree Wind Project in Illinois and Sand Fork Solar in
Texas demonstrate the company's dedication to green initiatives. The installation of LED
lights in 1800 stores contributes to a 10% reduction in energy usage (PESTEL Analysis of
Target, 2019). In catering to health-conscious consumers, Target offers organic and fresh
produce while enforcing specific manufacturing standards to prevent contamination
(Frue, 2017). Environmental stewardship extends to waste reduction, with a goal of
cutting operating waste by 15%, a commitment that includes installing 500 solar panels
on buildings by 2020 (Frue, 2017). Currently, as the research states, 15-20% of Target's
energy usage is solar-powered. The company has also significantly reduced water usage
by up to 30%, surpassing the initial goal of a 10% reduction by the end of 2015 (Frue,

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2017). Target's comprehensive environmental initiatives showcase its dedication to
sustainable practices and align with its broader goal of responsible corporate citizenship.

2.5. Competition (Market Share)

As of 2023, the global retail market is experiencing robust growth, with a value of $28.3
billion, reflecting a significant Compound Annual Growth Rate (CAGR) of 8.3% (Retail
Global Market Report 2023, 2023). Projections suggest further expansion, reaching $37.7
billion by 2027. This growth indicates a thriving market with ample opportunities for
retailers to capture a larger share.

In the United States, the ecommerce sector is a key battleground for major retail players.
Walmart currently holds a substantial 6.4% market share in the retail ecommerce
industry, according to Chevalier (2023). While this positions Walmart as a significant
player, it's important to note that the market is heavily dominated by Amazon, which
commands an imposing 37.6% market share (Chevalier, 2023). This data underscores the
duopoly between Amazon and Walmart, with Amazon holding a commanding lead.

Target, on the other hand, holds a more modest 1.9% share in the same retail ecommerce
market, as stated by Chevalier (2023). While Target's market share is considerably
smaller than both Walmart and Amazon, it still represents a notable presence in the
competitive landscape. Target's focus on a diverse range of products, coupled with a
strong physical store presence, contributes to its position in the ecommerce market.

Walmart's second-place position in the market is indicative of its substantial online retail
presence, but it also highlights the challenges of competing with Amazon, a company
renowned for its dominance in ecommerce. Both Walmart and Target face the ongoing
task of enhancing their online offerings, customer experiences, and supply chain
efficiency to remain competitive and potentially gain market share.

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 Figure 8.

Market share of leading retail e-commerce companies in the United States in 2023

Note. From Market share of leading retail e-commerce companies in the United States in
2023, by S. Chevalier, 2023
(https://www.statista.com/statistics/274255/market-share-of-the-leading-retailers-in-us-e-
commerce/).

3. Company Introduction

3.1. Walmart

The business mission of Walmart Inc. is “to save people money so they can live better”
(Walmart, 2023c).

Walmart’s vision statement is to be the destination for customers to save money, no

matter how they want to shop.

In order to achieve its vision and fulfill its mission, Walmart has recently set the
following specific goals:

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 + Sustaining a low-priced strategy to serve busy families and save money for them
while being presented anytime and anywhere across the US and leveraging
knowledgeable employees to help customers.

+ Ensuring that prices of its products are affordable and of good quality.

+ Creating opportunity, enhancing sustainability and strengthening community,

upholding the highest standards of ethics and integrity (Walmart, 2023a).

+ Transforming its financial profile, centering on three key building blocks: sales
growth from its omni-channel business model; diversifying earnings streams
through improved category and business mix; and scaling proven, high-return
investments that drive operating leverage and improve incremental operating
margins (Walmart, 2023a).

+ Approximately 4% sales growth, and growing operating income at a faster rate

over the next 3-5 years (Walmart, 2023e).

+ A People-Led, Tech-Powered Omnichannel Retailer: Reengineering supply chain

with a more intelligent and connected omnichannel network that is enabled by
greater use of data, more intelligent software and automation. Moreover, by the
end of Fiscal Year 2026, Walmart believes roughly 65% of stores will be serviced
by automation, approximately 55% of the fulfillment center volume will move
through automated facilities, and unit cost averages could improve by
approximately 20%. In general, they require less physical labor but have a higher
rate of pay.

Some financial information of Walmart in the past three years is as follows:

23
Table 1.

Revenue, cost and profit of Walmart 2021-2023

Total revenue Cost of goods Gross profit Net income

sold

2021 $559,151 $420,315 $138,836 $13,510

2022 $572,754 $429,000 $143,754 $13,673

2023 $611,289 $463,721 $147,568 $11,680

Note. From Walmart Revenue 2010-2023 | WMT, 2023, Macrotrends, 2023

(https://www.macrotrends.net/stocks/charts/WMT/walmart/revenue).

3.2. Target

The business mission of Target is “to help all families discover the joy of everyday life.”
(Target, 2023a)

Target defines its mission statement as the “purpose” of the company and uses it as
promises to offer convenience, affordability, fun, and ease for shoppers.

Target’s vision is “to make Target the preferred shopping destination for our guests by
delivering outstanding value, continuous innovation and exceptional guest experience by
consistently fulfilling our Expect More. Pay Less. Brand Promise.” To support their
mission, they are guided by their commitments to great value, the community, diversity
and the environment.

Target’s vision statement establishes a link between the company’s success and its
positive impact on the people. This connection drives motivation to do business.

24
In order to achieve its vision and fulfill its mission, Target has recently set the following
specific goals:

+ Differentiating from competition with assortment of unique owned brands and

curated leading national brands (Target, 2022a).

+ Investing to create an engaging, convenient, safe, and differentiated shopping

experience for guests. Specifically, the company plans to invest $4 billion to $5
billion this year to expand its guest-centric services, operations network of stores
and supply chain facilities, digital experiences and other capabilities (Target,
2023c).

+ Leveraging stores as fulfillment hubs to efficiently meet guests' needs, whether

they purchase online or in-store (Target, 2023c).

+ Engaging with guests through programs like Target Circle and RedCard to
maintain and enhance relevancy (Target, 2023c).

+ Delivering affordability to guests.

+ Driving efficiencies to fuel growth (Target's goal is to achieve $2 billion to $3

billion in cost savings over the next few years) (Target, 2023c).

+ Expanding sortation center network.

+ Opening more new stores and updating existing locations

+ Leveraging size and scale to benefit people, the planet, and business, primarily
through Target Forward, enterprise sustainability strategy (Target, 2023c).

Some financial information of Target in the past three years is as follows:

25
 Table 2.

Revenue, cost and profit of Target 2021-2023

Total revenue Cost of goods Gross profit Net income

sold

2021 $93,561 $66,177 $27,384 $4,368

2022 $106,005 $74,963 $31,042 $6,946

2023 $109,120 $82,229 $26,891 $2,780

Note. From Target Revenue 2010-2023 | WMT, 2023, Macrotrends, 2023

(https://www.macrotrends.net/stocks/charts/TGT/target/revenue).

4. Marketing Strategy

4.1. Target Market

4.1.1. Customer Portrait (Demographics)

Customer portrait refers to the process of identifying the characteristics, preferences, and
behavior of a business's target customers. It is crucial for businesses because it helps
them understand their customers better. Businesses can create products and services that
meet their customers' needs if they know who their customers are, what they need, and
what they want. This can increase customer satisfaction, loyalty, and retention.
Additionally, understanding customers can help tailor businesses’s marketing and sales
strategies to reach them more effectively. By identifying customer portraits, businesses
can gain a competitive advantage by providing better customer experiences and building
stronger customer relationships (Rose, 2023).

26
4.1.1.1. Walmart

According to statistics acquired by Numerator, a Chicago-based market intelligence

business, Walmart's target market consists of people with consistent earnings who
routinely shop for groceries, whereas their target audience consists specifically of
middle-aged suburban women who earn significant middle-class wages.

Figure 9.

Who is shopping at Walmart and what are they like?

Note. From Walmart Retailer Snapshot, Numerator, 2024

(https://www.numerator.com/snapshots/walmart/).

Walmart customers are typically aged 55 to 64, with an average age of around 59.
Overall, the majority of Walmart’s customers are women. According to Eira (2020), 70%
of Walmart shoppers are white, with only 12% are black and 11% are Latino. Walmart
shoppers typically tend to visit at least once per week, if not twice or more. Throughout
the year, the average shopper visits a Walmart retail location about 63 times. The average
consumer spends approximately $54 per visit, for a total of more than $3000 per year.
Groceries account for the vast bulk of Walmart purchases.

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 Although the statistics shown above represents the typical Walmart buyer, Walmart is
targeting a broad demographic of both genders and age groups (Walmart Target Market
Analysis - Demographics & Insights, 2022), as evidenced by the universal message of its
"Live Better Now" ad campaign, which debuted during the Winter Olympics Opening
Ceremony in 2022.

4.1.1.2. Target

Walmart and Target have quite a few things in common when it comes to their target
audience, but there are also some important differences. Like Walmart, Target’s average
consumer is also white and female. However, Target’s average customer tends to earn
around $65,000 per year, ranging up to $80,000. Target also markets itself to a somewhat
younger audience, primarily succeeding with consumers between the ages of 18 and 44
and living in suburban areas (Reuter, 2023a).

Figure 10.

Who is shopping at Target and what are they like?

Note. From Target Retailer Snapshot, Numerator, 2024

(https://www.numerator.com/snapshots/target/).

28
 The shopping habits of Target’s customers tend to take advantage of Target as a one-stop
shop. Customers often visit Target on a regular basis and for a variety of consumer needs,
from household goods to groceries to clothing to electronics. Target customers tend to
rely and appreciate the fact that Target supplies a wide variety of goods and services to
meet a long list of everyday needs. The typical Target customer visits Target once every 2
to 3 weeks. They also tend to spend slightly less per visit and visit fewer times
throughout the year, spending about $1000 a year on average (Eubanks, 2022). The
following content will discuss the key pain point of Walmart and Target as well as how
these two businesses solve that problem.

4.1.2. Pain points

Identifying your target audience's pain points is critical for generating leads. Pain points
are issues, disappointments, or challenges that your potential clients face and that your
product or service can address. Understanding their pain point allows you to generate
more relevant and appealing messaging, offers, and content that attracts and converts
prospects into leads (How do you identify your target audience’s pain points for lead
generation?, 2024). Customer pain points for Walmart and Target may vary, and
individuals' experiences can differ. However, there are some common themes that
customers might identify as pain points with these retailers.

4.1.2.1. Walmart

- Crowded stores: Walmart stores can be large and crowded, leading to a potentially
overwhelming shopping experience, especially during peak hours.

- Customer service: Some customers have reported concerns about the level of customer
service in certain Walmart locations, citing issues such as long wait times and difficulty
finding assistance.

- Perception of low-quality products: While Walmart offers a wide range of products at low
prices, some customers may perceive the quality of certain items to be lower than those
found in specialty stores.

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- Limited product variety: Despite offering a wide array of products, Walmart may not
have the same depth of selection in specific categories as specialty retailers, potentially
limiting choices for some customers.

- Checkout lines: Long checkout lines, especially during busy periods, can be a frustration
for customers looking for a quick and efficient shopping experience.

Walmart, one of the largest retailers, achieved success by constantly lowering costs,
credited with pulling millions out of poverty. However, this strategy resulted in
underinvestment in employee wages and training, producing operational issues and
consumer unhappiness. That has led to one of the most serious customer pain points that
need attention such as customer service mentioned above. As Walmart expanded into
e-commerce distribution centers, its demanding work climate contributed to low
customer service ratings. The American Customer Satisfaction Index ranked Walmart
lowest among 20 general merchandisers with a score of 70, while even dollar retailers
outperformed it. To address these concerns, Walmart launched the Manager Academy, as
part of a $1 billion employee development effort over five years. Over 2,000 managers
will take part, concentrating on strengthening oversight and store operations (Lee, 2023).

4.1.2.2. Target

- Higher prices: Compared to Walmart, Target is often perceived as having slightly higher
prices, which could be a pain point for budget-conscious shoppers.

- Limited store availability: Target stores may not be as widespread as Walmart, leading to
inconvenience for customers who may need to travel farther to access a Target location.

- Smaller grocery selection: While Target does offer grocery items, its grocery section may
be smaller than that of Walmart, which could be a limitation for customers looking for a
one-stop-shop for groceries and other goods.

- Perceived as less affordable: Some customers may view Target as less budget-friendly
compared to Walmart, affecting purchasing decisions for price-sensitive consumers.

30
- Brand perception: Target is positioned as a slightly more upscale retailer, and this could
be a pain point for customers who prefer the everyday low prices associated with
Walmart.

During the epidemic season, the pain point of limited store availability with objective
factors from the epidemic have affected customers' shopping experience at Target. And
this is how Target solved its major customer pain point in a smart way. With
back-to-school season underway and parents facing time constraints, Target anticipates
increased foot traffic for classroom supplies. Pre-pandemic, Target experienced
significant foot traffic spikes during this season, peaking at a weekly visit increase of
27.5% in August 2019. The pandemic disrupted this trend, prompting Target to adapt and
recover over three years. Learning from shifts in consumer behavior, Target introduced
Circle Week, a counterpart to Amazon's Prime Day, and enhanced convenience with
order ahead, in-store pickup, and drive-up options. To offset the impact of virtual
shopping on impulse buys, Target cleverly included Starbucks in its drive-up service,
recognizing the joy customers find in leisurely wandering aisles with a beverage. The
Starbucks drive-up service, available in 24 states starting October, aligns with Target's
commitment to convenience and customer satisfaction during the bustling holiday
shopping season. Customers can order Starbucks via the Target app, combining the joy of
a coffee run with the practicality of completing their shopping list (Warburton, 2023).

4.1.3. Critical Success Factors

4.1.3.1. Walmart

Walmart's critical success factors include its low-price strategy, strong customer service,
global supply chain, and efficient technology solutions (Rickerby, 2020).

- Global supply chain: Walmart's efficient global supply chain is a critical success factor.
The company's vast network allows it to source products globally, negotiate favorable
terms with suppliers, and maintain consistent inventory levels. This agility is essential for
responding to market demands and trends.

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- Low-price strategy: Walmart's commitment to an Everyday Low Prices (EDLP) strategy
has been a fundamental driver of its success. By consistently offering lower prices than
competitors, Walmart attracts price-sensitive consumers and builds a reputation as a
cost-effective shopping destination.

- Strong customer service: Walmart places a strong emphasis on customer service,

recognizing the importance of a positive shopping experience. Friendly and helpful staff,
efficient checkout processes, and efforts to enhance in-store satisfaction contribute to
customer loyalty.

- Efficient technology solutions: Walmart invests heavily in technology to enhance

operational efficiency and improve the overall shopping experience. Technologies such as
inventory management systems, data analytics, and e-commerce platforms contribute to
streamlined operations.

4.1.3.2. Target

According to Davis (2023), Target’s success is the result of a deep understanding of its
consumer base and a commitment to delivering value through strategic product
assortment, an engaging shopping experience, and a strong brand presence both online
and offline. And these following factors leads to its success:

- Product diversity and quality: Target provides a diverse choice of products that meet a
variety of client demands, from groceries to electronics, all under one roof. Target's
appeal stems from the high quality of its private-label brands, which offer luxury
products at competitive rates.

- Marketing and brand collaborations: Target's marketing methods are imaginative and
inclusive, frequently incorporating varied models and storylines that appeal to a wide
audience. Target's collaborations with designers and celebrities also create unique
products, which generate excitement and drive foot traffic.

- Digital presence and omnichannel retailing: Target has successfully bridged the gap
between online and in-store purchasing by providing a robust e-commerce platform and

32
 an app that enables discounts and convenient shopping. This seamless connection makes
buying easier, whether customers are in-store, online, or on their mobile devices.

- Customer experience: Target's shopping experience is simple and entertaining, with

clean, well-organized stores and a strong customer service focus. Target's focus on
customer happiness has earned them a reputation for ease and dependability.

4.2. Value Chain Comparison Among Competitors

4.2.1. Value Chain

The initial phase of market mapping typically necessitates the delineation of the value
chain (Hellin & Meijer, 2006). Although little consensus regarding the definitions of
concepts related to the value chain has been established (Donovan et al., 2015), some
compendious interpretations have been suggested so far. According to Brown (1997), the
value chain functions as a tool to dissect a business into strategically significant activities.
This facilitates the identification of competitive advantage sources through the execution
of the discerned activities more economically or proficiently than rivals. The business's
value chain constitutes a segment of a larger series of activities conducted by other
channel members, such as suppliers, distributors, and customers. In other words, it is a
business system developed to deliver end-user satisfaction, known as value, while also
fulfilling the objectives of other stakeholders involved (Walters & Lancaster, 2000).

Value activities are categorized into two main types: primary activities and support
activities (Porter, 1985). According to Porter (2001), primary activities include the work
related to the physical creation of the product, its sale, transfer to the buyer, and
post-sales assistance. Within any firm, primary activities can be further classified into the
five generic categories as depicted in Figure 11 (Porter, 2001). Support activities, on the
other hand, complement the primary activities and each other by offering purchased
inputs, technology, human resources, and various firmwide functions. Dotted lines signify
that procurement, technology development, and human resource management can be
associated with specific primary activities as well as supporting the entire value chain.
Firm infrastructure, while not linked to particular primary activities, provides support
across the value chain.
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 Figure 11.

The generic value chain

Note. From The Value Chain and Competitive Advantage (p. 52), by M. E. Porter, 2001,
Psychology Press.

4.2.1.1. Primary Activities

a) Inbound Logistics

i) Similarities

Walmart and Target both make a forceful move in establishing close-knit supplier
relationships and partnerships. Walmart maintains strong relationships with suppliers
globally to ensure a steady supply of goods. Walmart's efficient supplier relationship
management demonstrates strategic partnerships with both local and international
suppliers. Operating under its "Supplier Alliance Program'' and “Supplier Inclusion
Program” (Maestri & Baertlein, 2009; Walmart, 2023g), Walmart implements rigorous
quality assessments and price regulations. This cooperative strategy not only sustains

34
Walmart's inventory levels but also minimizes lead times for product availability.
According to Best (2022), five main suppliers of Walmart include Plug Power Inc.,
Procter & Gamble, HP Inc., Green Dot Corporation, Primo Water Corporation. As for
Target, by establishing strategic partnerships with suppliers, it secures timely deliveries
and focuses on efficient inventory management practices to optimize stock levels.
According to Target Corp’s (TGT) Suppliers by Company, Division and Industry (2023),
top five suppliers of Target are Cisco Systems Inc., 3M, AB InBev, Altria Group Inc., and
Apple. As stated by (Berman, 2023), with strategic investments totaling $7 billion, Target
optimizes inbound logistics to reduce lead times and enhance efficiency.

Another resemblance between these companies in their inbound logistics is the inventory
systems. Walmart uses sophisticated inventory management systems to optimize stock
levels and reduce holding costs. It operates an extensive infrastructure of distribution
centers and cross-docking facilities, enabling efficient product receipt and dispatch
(Unlocking Success: Exploring Walmart Supply Chain Strategies, 2023). Mavi et al.
(2020) held that cross-docking is a logistics procedure involving the transshipment of
inventory at a central hub - Walmart’s Central Point, which means unloading shipments
directly from inbound trucks onto outbound trucks, aiming to decline shipment time and
costs by eliminating storage and order picking tasks, thus ultimately expediting the
shipping cycle's flow. Thereby, by adopting this approach, the elimination of preservation
and storage activities of Walmart significantly reduces costs. Moreover, shipping
expenses decrease due to shorter shipping times, as each distribution warehouse is within
130 miles of any Walmart store, enabling Walmart to negotiate better price margins with
suppliers (Nguyen et al., 2023). Target’s inbound logistics also involve sophisticated
inventory tracking systems and streamlined transportation strategies, enabling the
company to maintain adequate inventory levels while minimizing holding costs. For
smaller shipments below truckload volumes, Target has established a network of seven
domestic consolidation points managed by third-party firms. This is a key strategy to
reduce inbound freight costs, especially in large geographic markets. This setup bears a
resemblance of Walmart's Center Point network, where these domestic consolidation
facilities function as cross-dock terminals (Target Distribution Center Network, n.d.).

35
Technology in inbound logistics is also a similarity for them. Walmart leverages AI and
machine learning as a conducive approach to inventory management systems, connecting
to its 4,700 stores, fulfillment centers, distribution centers and suppliers (Musani, 2023).
Likewise, by leveraging advanced technologies and efficient transportation networks,
such as the $100 million investment into sortation centers, Target ensures timely and
cost-effective inbound logistics processes. Like Walmart, Target also makes great use of
Radio Frequency Identification (RFID) to strengthen its inventory precision and
visibility, as well as better supply chain infrastructure (Target and RFID Technology:
Achieving High Customer Experience, 2020).

ii) Differences

Regarding distribution network structure, there are some disparities between the two. As
stated by McShane (2010), during its annual meeting for the investment community in
October 2009, Walmart unveiled its newly established consolidated global sourcing
structure via the introduction of Global Merchandising Centers (GMCs). This innovation
was anticipated to capitalize on the company's expansive global reach across various
general merchandise categories and global food sourcing. It aims at direct sourcing from
manufacturers while bypassing intermediaries, estimating that transitioning to direct
purchasing could yield cost reductions of around 5% to 15% throughout the supply chain
within a five-year period (Birchall, 2010). In contrast, Target employs regional
distribution centers, as when products are purchased in full truckload volumes from
domestic vendors, they are directly shipped to its regional distribution centers.

Apart from that, the DSD (Direct-Store-Delivery) approach is implemented in the hope
for cost savings across the distribution channel (Williams, 1999) as Walmart necessitates
the role of suppliers in the supply chain and inventory management mix (Walmart Value
Chain Analysis, n.d.). Furthermore, in addition to Radio Frequency Identification (RFID)
for better product tracking and warehouse space optimization, Walmart also mandates
Vendor-Managed Inventory (VMI) to support just-in-time inventory replenishment while
markedly reducing inventory holding expenses (Walmart Value Chain Analysis, n.d.;
Jenns, 2023).

36
 iii) Strategies

Upon difference analysis, it can be concluded that the leverage of GMCs as well as the
superiority in groundbreaking approaches of Walmart has been upholding one of its
aforementioned critical success factors, namely global supply chain. Therefore, to sustain
this factor in maintaining its position in the retail industry, Walmart ought to seek for
conducive strategies aligning its resources with how they want to thrive in the
marketplace. It opts for ethical sourcing and keeping suppliers in check by implementing
stringent standards and guidelines to ensure that its suppliers adhere to social and
environmental responsibilities. Through its Supplier Standards and Responsible Sourcing
practices, Walmart guarantees suppliers comply with labor and human rights standards,
such as fair wages, safe working conditions, and the prohibition of child labor (Reinblatt,
2023). Also, aware of the significant influence wielded by its demanding supply chain,
Walmart took its initial steps to engage suppliers in 2009 through a preliminary version of
the Index by introducing the Walmart Supplier Sustainability Assessment (SSA)
Scorecard to showcase its dedication to instigating advancements within its supply chain
(Walmart: Embedding Sustainability in a Vast Supply Chain Case Study, n.d.).

As for Target, while the global supply chain is not one of its critical success factors, it
still employs various methods to offer guidance on implementing Target's policies and
practices for responsible business conduct. These include Target's Standards of Vendor
Engagement (SOVE), Applying Target's SOVE manual, vendor training sessions, and
Responsible Sourcing and Sustainability inbox, according to Target (2024b).

b) Operations

i) Similarities

Since 2016, Walmart’s operations have been classified into three representative segments,
namely Walmart U.S., Walmart International, and Sam's Club (Walmart, 2016). In the
fiscal year 2023, Walmart U.S. held a share of 69%, earning the leading position among
the three segments. This figure was followed by that for Walmart International and Sam’s
Club, with 17% and 14%, correspondingly (Ozbun, 2023c). Each segment operates with

37
its own unique variety of activities. Likewise, in the beginning, Target comprised a total
of three operating segments, namely Target, Mervyn's and Marshall Field's.

One fundamental facet of Walmart’s operations is its store design, or more specifically,
layout optimization. In-store, bold, three-dimensional typeface guides customers directly
to their desired section, while aisles are labeled with alphanumeric combinations to lead
customers from aisle to product (Walmart, 2020); hence, central placement of
high-demand products may potentially boost sales. Also, another mainstay to take into
account is the enforcement of forecasts, which exploit historical data, seasonal patterns,
promotional activities, and special events to predict forthcoming business trends.
Walmart and Sam’s Club hinge on the Global Replenishment Solutions System (GRS) to
facilitate this predictive modeling (Walmart Order and Demand Forecasting, 2023).
Notably, Walmart, with a view to bettering operations management, actively leverages
technology by implementing a system called Customer First Scheduling in an effort to
analyze foot traffic and sales in each store’s departments, and allocate staff accordingly to
the shifts in order of importance (Bose, 2016). Target’s scope shares a strikingly similar
goal with Walmart’s, as it highly focuses on store designs as its underlying aspect. From
2022, according to Target Unveils Larger-Format Store Design (2022), Target's latest
bigger-sized stores are painstakingly designed to optimize additional space while
integrating new design elements. Notably, these stores boast increased light and natural
elements, creating an enticing and refreshing atmosphere for shoppers. Furthermore, they
incorporate localized design features that resonate with the surrounding community,
fostering a sense of connection and belonging. This design also proves Target's
commitment to sustainability, with built-in sustainability features aimed at reducing
environmental impact and promoting eco-friendly practices.

Especially, by optimizing shelf stocking and replenishment processes, Target enables its
employees to focus on higher-priority responsibilities. Target has excelled in minimizing
manual labor hours, proven by the fact that the retailer reclaimed between 40,000 to
45,000 productivity hours in 2018 by implementing Grease, an open-source intelligent
tool designed for tasks such as execution recovery (Schwartz, 2019).

ii) Differences
38
In the middle of 2004, two of the three segments of Target, specifically Mervyn’s and
Marshall Field’s were sold to May Department Stores Co (Tamaki, 2004), making
Target’s sales stream hinge on only two channels, physical stores and online platforms,
from then on. As of the end of the fiscal year 2022, Target has an entire number of 1,956
stores across all the U.S. (Target, 2024a), which drives a sales share of 81.4% for Target
(Smith, 2023). This means the remaining 18.6% is from its online purchases in the form
of either its eCommerce site or mobile application.

As of October 2023, the total number of Walmart stores in the United States, including
both Walmart US and Sam's Club, is 5,215. Walmart U.S. operates 4,616 units, with
3,560 Supercenters, 675 Neighborhood Markets, 361 Discount stores, and 20 Small
Formats. Sam's Club contributes 599 units to the total count (Walmart, 2023d). Sam's
Clubs operate as membership-only warehouse clubs analogous to Costco (Hughes, 2022)
and plan to launch 30 stores in the next five years (Repko, 2023a). This expansion
portrays Walmart’s prevalence in the U.S., contributing to the dominant net sales share as
outlined above. Besides, the first segment also counts the contribution of Walmart’s U.S.
eCommerce website: walmart.com (Ozbun, 2023c). Regarding Walmart International,
other than the U.S., Walmart operates 5,294 total units in 24 countries (Walmart, 2022;
Walmart, 2023d).

iii) Strategies

Like aforementioned, Target outperforms Walmart in Omnichannel Integration and Store

optimization, therefore one strategy that Walmart could use to potentially outperform
Target is to further leverage its extensive store network and omnichannel capabilities to
enhance customer convenience and drive sales growth.

Building upon its store design and layout optimization efforts, Walmart could invest in
advanced technologies and data analytics to optimize its physical stores for a seamless
omnichannel shopping experience. For example, Walmart could utilize predictive
modeling and analytics tools similar to its Global Replenishment Solutions System
(GRS) (Pesaru, 2020) to analyze customer behavior and preferences, thereby optimizing
product placement and assortment in-store to drive sales. Additionally, Walmart could

39
 expand its use of technologies like Customer First Scheduling to allocate staff resources
more efficiently based on real-time data on foot traffic and sales trends.

c) Outbound Logistics

i) Similarities

As an indispensable component of their value chains, outbound logistics guarantee

timeliness and efficiency in transporting goods from warehouses to its numerous retail
units, as well as home-delivery packing and shipping, loading items into customers’
vehicles in the parking lot, and managing the cash registries and bagging areas within the
stores (Hughes, 2022).

One noteworthy similarity in terms of outbound logistics is the extensive distribution

center networks of these retail behemoths. Both of them operate broad networks of
distribution centers strategically located across the U.S., allowing them to capture vast
opportunities. Walmart is currently running a total of 210 distribution centers, each of
which is over 1 million square feet in size and hires a human resource of roughly 600
people unloading and shipping over 200 trailers daily (Walmart, 2024). Similarly, Target
ensures the efficient movement of goods from distribution centers to stores and customers
through its distribution center network. With 75% of Americans living within 10 miles of
a Target store (Target, 2023a), the retailer leverages its expansive store network to
facilitate last-mile delivery. Target, as of 2022, operates a total number of 49 distribution
centers within 23 states across the U.S. (O’Neal, 2022). Each of its regional merchandise
distribution centers covers an average area of 1.5 million square feet and typically
employs around 800 to 1,000 associates (Target Distribution Center Network, n.d.).

Additionally, Walmart and Target both make use of a wide range of methods to have their
goods delivered to customers. With the “Direct-to-Fridge” InHome delivery service,
Walmart’s employees are allowed to enter customers’ homes to deliver groceries and
other sorts of purchases while wearing a camera (Holland & Repko, 2022). It also
establishes partnerships with some shipping carriers such as USPS and FedEx for home
delivery (Obando, 2023). Likewise, Target applies a variety of delivery options to make it
flexible for customers to receive their purchases. Every option of delivery services is
40
executed through Target’s TLMD (Target Last Mile Delivery) method, which facilitates
the packaging of online orders, which are then shipped to its expanding network of
sortation centers for next-day delivery by Shipt to its valued customers (Target, 2023d).

ii) Differences

According to Cortes (2022), Walmart has one of the largest fleets in the U.S., with 12,000
drivers, 10,000 tractors, and 80,000 trailers, covering a distance of 1.1 billion miles every
year. This marks one distinct difference, as unlike Walmart, Target does not own a group
of trucks; instead, it only operates with containers and contracts with workers of Shipt, a
delivery startup acquired by Target in 2017, to deliver packages in each batch headed to
the same town or nearby neighborhoods. Moreover, national carrier partners like FedEx
handle the sorting and delivery of packages to more distant locations, such as other metro
areas or states (Repko, 2022). She affirmed that more than 2,000 Shipt drivers and carrier
partners handle the delivery of packages from the hub. Initially capable of delivering 600
packages per day, the center has significantly expanded its capacity and can now handle
up to 50,000 deliveries daily.

Besides, even though both companies have developed a great deal of distribution centers,
Target operates fewer distribution centers, yet covers a larger area and typically employs
more associates. This difference in distribution network size and scope reflects each
company's unique market positioning, operational priorities, and geographic coverage.

Alongside that, a strategy that Target have not adopted like Walmart yet is the “hub and
spoke” system, which allows goods to be centrally ordered and compiled at a
purpose-built warehouse referred to as the distribution center (hub). From there, products
are delivered to the individual stores (spokes) based on the orders received by each store
(Wal-Mart’s Supply Chain Management Practices (B): Using IT/Internet to Manage the
Supply Chain, 2004). By means of this approach, Walmart can gain substantial cost
advantages thanks to large-volume goods procurement and their distribution via its
internal logistics network to retail units. Also, the cross-docking tactic is executed in
accordance with its inbound logistics activities as aforementioned with the aim of
warehousing space eradication and cost reduction.

41
 iii) Strategies

Although these discrepancies are not essentially associated with each company’s current
critical success factors, they might as well take some vigorous practices to exploit the
resources available for use to expand their success factors. For example, in 2022, Target
planned to construct four additional regional distribution centers, complementing the two
established the previous summer in addition to expanding its network of sortation sites to
expedite the flow of goods throughout its supply chains. Target's strategic approach forms
part of an ambitious capital expenditure initiative aimed at enhancing delivery
capabilities, primarily by optimizing its warehouse network, while leveraging its nearly
2,000 stores to meet the rising demands of e-commerce (O’Neal, 2022). Plus, in response
to Walmart’s “hub and spoke” system, Target has implemented one thing called “stores as
hubs” strategy, allowing it to turn its stores into mini warehouses, where its employees
pick and pack the major part of online orders before proceeding to delivery to customers
via many delivery options (Repko, 2023b).

To seize the many opportunities in the sphere of outbound logistics, Walmart also
initiated some strategies, one of which is Walmart GoLocal, a delivery service launched
in 2021 that facilitates business growth using Walmart’s delivery capabilities and
countrywide coverage at competitive pricing. This incorporates delivery on a range of
assortment, including those with size and complex requirements, along with its
adaptability to meet different timelines (Walmart, 2021b).

d) Sales and Marketing

i) Similarities

Both Walmart and Target have their own pricing policies with the same purpose of
lowering prices to adapt their customers’ demands. The year 2007 marked Walmart’s first
time ever to change its slogan to “Save Money. Live Better”, replacing the antecedent
tagline “Always Low Prices” (Maestri, 2007). Both of these underscore its persistent
focus on commitment to lowly priced goods and groceries. This also closely corresponds
to its marketing strategies through the EDLP (Everyday Low Price) standard, with a
holistic and data-driven approach, that establishes itself as one of its unrivaled value
42
propositions. Although setting a higher price compared to Walmart, Target still prices
name brand items at the low end. Moreover, Target has recently declared that its physical
stores will now match prices offered by prominent online retailers, including Amazon,
Walmart, and Best Buy (Mohammed, 2013). There is Target's price matching policy
which aims at budget-conscious customers by referring to customers browsing items at
brick-and-mortar stores and subsequently purchasing them at a lower price from online
retailers, as mentioned by Mohammed (2013).

What’s more, both Walmart and Target utilize omni channel platforms and technology to
enhance their retail operations and customer experiences. In terms of digital marketing,
Walmart’s online presence is robust, with a set of eCommerce sites, websites, social
media profiles on multiple platforms. Much of the company's earnings are boosted by its
eCommerce operations, with a 15% global growth rate. The U.S. market alone saw a
remarkable 24% increase, greatly driven by pickup and delivery services (Reiff, 2023).
For Target, it deploys resources to implement beacon technology, an innovative approach
to enhance the shopping experience. These compact devices are strategically placed
throughout each store, sending push notifications to shoppers who have downloaded the
Target app and informing customers about sales, product recommendations, and
exclusive offers.

ii) Differences

Walmart makes use of big data analytics in its targeted marketing and promotions. By
deriving and analyzing customer insights through purchase patterns and inclinations from
sales data mining, Walmart can provide customized product recommendations, offers and
emails (Cook, 2016). It can also provide personalized pricing and discounts upon the
analysis of purchase history, locale, and browsing demeanors. As of 2013 alone, Walmart
had customer data of up to 145 million Americans, or more than 60% of U.S. adults
(Center for Media Justice et al., 2013).

Target’s marketing strategies center in mass marketing, which means it opts for a broad
approach to messaging, eschewing individual segment targeting in favor of reaching a
wider audience (Ridge, 2023). It employs a consistent messaging strategy across multiple

43
channels such as television, digital platforms, print media, and in-store promotions,
guaranteeing that the brand's message resonates with consumers across different facets of
their daily lives. This underlines Target’s endeavor in omnichannel marketing strategies,
proven by a rise of 24.3% in revenues and digital sales surging by 195%, enabling it to
gain market share against its rivals.

As a part of its comprehensive marketing approach, Target executes several emotional

advertising campaigns to foster lasting relationships with customers. This form of
advertising arouses strong emotions and associations between Target and existing as well
as potential customers, often resulting in increased brand awareness, preference, and
loyalty (Retail Reinvention: Marketing Strategies of Target Corporation, 2023). It also
takes advantage of its seasonal and holiday-based marketing to maximize its profitability
throughout the year.

iii) Strategies

To conclude, based on the policies of Target and Walmart in reducing price, Walmart has
achieved efficiency with their strategy and the brand mantra “Everyday Low Price” while
Target can not compare. For instance, Target is stated to be excessively generous when it
comes to their price matching strategy (Mohammed, 2013). According to Mohammed
(2013), this approach is comparable to providing full-service gas at the cost of
self-service. By matching online prices, Target risks devaluing the traditional
brick-and-mortar shopping experience. Additionally, it incentivizes customers to initially
search for lower prices online, allowing them to enjoy the benefits of discounted online
prices while also capitalizing on the conveniences of in-person shopping (Mohammed,
2013). That’s also the reason why Walmart solely considers low pricing strategy and
efficient technology as its critical success factors whilst Target does not.

Regarding Target’s beacon technology as mentioned above, the company gains valuable
insights into customer purchasing behaviors, refining its ability to collect in-store
customer data through this strategy (Aubagna, 2015). It can be claimed that Target has
effectively developed various data mining programs to enhance its marketing strategies
and enhance overall performance, through which it crafts comprehensive profiles of

44
 individual customers, accessing information that is considered highly personal (Corrigan
et al., 2014). Simultaneously, to upgrade buying experience, improve brand visibility,
engage with consumers, and boost sales, Target also expands its network with a couple of
influencers and celebrities through product endorsements, limited collections, exclusive
content, etc. Some notable examples are Chrissy Teigen, Victoria Beckham, Lilly
Pulitzer, demonstrating the company’s ability to adapt to fickle customer desires in
multiple fields (Retail Reinvention: Marketing Strategies of Target Corporation, 2023).
This also complements Target’s digital marketing strategies, which allows its in-house
marketing team to experiment emerging digital trends, including the sponsorship for
Gwen Stefani’s performance at the Grammy Awards. It is underscored that every program
is required to predetermined revenue targets, meaning that the digital marketing team is
regarded as a strategically vital part of business growth (Wong, 2016). Hence, Target
considers customer experience as its critical success factors in comparison with Walmart
by optimizing this strategy.

e) Service

i) Similarities

According to Wei and Wei (2011), purchase experience and post-sales assistance are the
two primary components that make up Walmart’s customer service. The role of customer
service in the first component aims at better customers’ shopping journeys by performing
Total Quality Management (TQM) practices to guide purchase decisions. Mujtaba and
Maxwell (2007) claimed that for Walmart, Total Quality Management (TQM) principles
have been actively implemented across the organization, notably reflected in the
outstanding hospitality towards customers upon entering their stores. Also, by leveraging
the advantage of electronic shelf labels for instant price updates, it can optimize human
resources by shifting the effort in manual labeling tasks to enhancing overall customer
satisfaction (Souza, 2019). Similarly, Target’s customer service highlights staff’s
friendliness and helpfulness.

On the other hand, in the post-sales service, Walmart guarantees satisfaction in the long
run, facilitating free returns for both online and in-store purchases upon proof of

45
purchase. Customers who are dissatisfied with their purchases can opt to return or
exchange items within a 90-day period through one of these three channels: in-store,
mail, or pickup delivery from their own home. It is remarkable that none of these may
incur any additional costs throughout the process (Walmart, 2021a).

Besides, just like Walmart, Target also implements a return policy for customers, stating
that Target's return policy provides customers with flexibility, allowing for a full refund
within 90 days for most items. Those who used RedCard for payment have an extended
window of an extra 30 days for returns. This is a kind of Target credit card that can be
used in both retail stores and online purchases to receive a 5% discount (Parker, 2023).
Additionally, customers have up to a year to reconsider their purchase for Target-owned
brands or registry items (Target, 2022b). Noteworthily, returns can be made in various
forms, ranging from in-store pickup, drive-up to mail returns, facilitating convenience for
customers.

ii) Differences

Aside from customer service in its retail operations, Walmart also offers a wide range of
many-sided services outside, all of which together strengthen customer experience and
better its global performance. Some of those services are Walmart MoneyCenter, which
offers various financial products such as prepaid debit cards, money transfers, bill
payments, and check cashing, etc., or Walmart Health, providing a broad variety of
healthcare and wellness facilities. Other significant services which can also be listed are
Walmart Auto Care Centers and Walmart's Online Grocery Pickup and Delivery. Most
specially, Walmart also broadens its service portfolio by entering into the on-demand
video streaming market with its subscription-free streaming service, marking its effort to
diversify its offerings. Regrettably, it is reported that Vudu was later acquired by a movie
ticketing service named Fandango due to a lag behind its rivals (Spangler, 2020).

Not offering as many services as mentioned for Walmart, it is still widely held that Target
performs one of the most top-notch customer service. It places a strong emphasis on
employee training to ensure they are well-prepared to assist customers effectively. To
achieve this goal, Target makes certain of a wide and timely presence of in-store

46
 employees to help customers in-need and smoothen customer journeys. In addition, an
in-store customer desk care is also executed with a view to ensuring every predicament
customers face is well-resolved. Aside from offline assistance, customer relationship
management of Target is also witnessed through online chat services or over the phone,
underpinning its attempt in improving customer service.

iii) Strategies

With Walmart dominating in demand and customer service policies, Target is more likely
to succeed by strengthening its commitment to community engagement and sustainability
initiatives to differentiate itself from Walmart and other competitors. This could involve
supporting local communities through charitable donations, volunteer programs, and
partnerships with local organizations. Additionally, Target can continue to invest in
sustainable practices such as energy-efficient store designs, waste reduction efforts, and
environmentally friendly product sourcing to appeal to environmentally conscious
consumers and promote long-term sustainability.

In the year 2020, Target donated a total of $328 million dollars into numerous
philanthropist programs, such as disaster and crisis victim support programs, clothing and
holiday gifts to families in need and many more greater causes (Target, nd). Target also
implements a voting program called the Target Circle, which allows their customers to
dictate where funds go in support of nonprofits in their community and across the nation.

4.2.1.2. Support Activities

Walmart Target

a) Firm Walmart depends on its As a retail corporation, Target’s

Infrastructure infrastructure as the infrastructure, which is leased in
cornerstone of its retail form of retail stores,
operations, consisting of an warehouses, office spaces,
extensive network of retail distribution centers, land, and
units, warehouses, distribution equipment, is deemed as the
centers worldwide, which is bedrock backing its operations.

47
 under its vigilant surveillance. Target (2024) stated that it has
Walmart’s first-rate 1,956 stores totally open across
infrastructure can be the U.S., with additional 59
recognized through its supply chain facilities in the U.S.
expansion of more than and almost 20 sourcing offices
10,500 stores and clubs worldwide. Currently, its
globally (Walmart, 2024). It is properties cover an area of about
reported by Ozbun (2023b) 135,000 square feet.
that, in 2023, Walmart
International's sales area totals
approximately 273 million
square feet while those of
Walmart U.S. and Sam’s Club
each exceed 702 million and
80 million square feet,
respectively. Given Walmart’s
business strategy, its
infrastructure plays a pivotal
role, supporting its inbound
and outbound logistics
forthwith.

Strategies In Walmart’s business Effective infrastructure

strategy, their infrastructure is management can allow Target
intended to directly support its Corporation to optimize the
outbound and inbound value of the whole value chain.
logistics, as well as their Target Corporation can control
procurement operations, with the infrastructure activities (or
distribution centers specially commonly called overhead
created to supply shops costs) to strengthen the

48
 (Pratap, 2017). competitive positioning in the
Subscription models offering market (Byrne, 2018). Target can
consistently lower prices, or gain a significant edge by
dynamic pricing that adjusts effectively managing its
in real-time to local infrastructure. Streamlining
competition. In-store, smart these activities, often considered
shelves with automatic overhead costs, unlocks the
restocking and personalized potential to optimize the entire
navigation apps could value chain. This translates to
improve the shopping cost savings across the board,
experience. Finally, ultimately strengthening Target's
leveraging their infrastructure competitive position in the
for last-mile delivery, Walmart market and allowing them to
could explore designated deliver greater value to their
delivery hubs within stores or customers.
partnerships with local
services for hyper-fast
deliveries.

b) Human As of the end of 2023, As reported for the fiscal year

Resources Walmart has the world’s ending in 2022 by Statista
largest workforce of (2023c), a total number of
approximately 2.1 million roughly 440,000 employees are
employees globally, with working for Target, indicating a
about 1.6 million associates in decline of 2.22% compared to
the U.S (Dyvik, 2024; the previous year. Besides, the
Walmart, 2024). This is headcount of its headquarter in
undoubtedly one of the most Minneapolis alo shrinked to
irreplaceable assets of 7,100 in 2022 in comparison to
Walmart. Therefore, it puts 8,500 in 2021 (Owusu, 2023).
great emphasis on This phenomenon might

49
comprehensive training, allegedly stem from the
educational programs, argument about employees’
innovative procedures, responsibilities exceeding those
pathways for progression, and typically associated with a
competitive compensation standard retail job though its
packages and benefits for its pay, averagely $17 per hour,
employees, realizing its surpasses the pay of many
purpose of improving the U.S. hourly jobs in various markets
frontline workforce (Reuter, 2023b).
development system within
Notwithstanding some notoriety,
the retail and related
Target is still known for its
industries (Walmart, 2023b).
endeavor in taking great care of
Nevertheless, Walmart is still employees’ well-being, offering
decried for underpaying its an extension in health benefits as
staff (Dokoupil, 2023) and well as paid time off for
sued for its alleged gender and individuals at greater risk
race discrimination (Segal, (Kohan, 2020). People working
2022). It is on the way to for Target are also offered an
strenuously enhance its human employee discount, which is
resource strategies. As an 10% off all goods and an extra
illustration, Walmart has 20% off private-label brands and
recently raised its minimum groceries (Reuter, 2023b).
wages for 425,000 employees,
making their average rates
vary between $13 and $19
(Nassauer, 2023). Plus,
according to “2023 Culture,
Diversity, Equity and
Inclusion Annual Report”
(2023), women account for

50
 over a half in Walmart’s
workforce, indicated by
53.18%, proving its effort in
striking a balance between
two genders in the human
capital.

Strategies In recent years, Walmart has Target Corporation can analyze

been criticized for poor human resource management by
Human Resources practices, evaluating different HR aspects,
so they started a massive including- recruiting, selecting,
investment, mainly improving training, rewarding, performance
minimum wages, promoting management and other personnel
employees, and the rest went management activities. The
to education and training. effective HR management can
They are focusing on human allow Target Corporation to
resources improvements to reduce competitive pressure
help to sustain its low costs based on motivation,
strategy (Dudovskiy, 2016). commitment and skills of its
They've implemented a workforce. The company can
significant investment to also achieve its cost
improve the employee minimisation objectives by
experience. This includes analyzing hiring and training
raising minimum wages, costs with their relative return.
increasing promotion The heavy dependence of Target
opportunities, and devoting Corporation on employees' talent
resources to education and will increase the importance of
training programs. This this value chain support activity
seemingly contradictory (Byrne, 2018).
approach actually strengthens

51
 their low-cost strategy in the
long run.

c) Technological Walmart takes advantage of Investments in hybrid

Development information technology in multi-cloud architecture,
almost all of its multifaceted powered by Google Cloud
aspects of the value chain, Platform and Microsoft Azure,
ranging from supply chain, enable Target to optimize
inventory management, logistics management processes.
predictive modeling to By leveraging data analytics and
marketing, sales, and optimization tools, Target
customer service. Apart from minimizes costs and maximizes
the aforementioned systems, efficiency in its operations,
namely Radio Frequency ensuring timely and reliable
Identification (RFID), Global order fulfillment for its
Replenishment Solutions customers.
System (GRS), Customer First
Apart from such advantageous
Scheduling, Walmart also
technological implementations
implements Retail Link, an
as Radio Frequency
internet-based portal that
Identification (RFID), beacon
grants suppliers the access to
technology, and Grease, Target
inventory tracking, sales
also acquires Six Sigma as a
statistics as well as key
data-driven approach aiming at
metrics (Walmart, n.d.). As
gauging performance and
reported by Malone (2021),
enhancing processes. Since
Kumar - Walmart’s EVP,
2004, it has leveraged this
global CTO and chief
method to drive sales, attain cost
development officer - reported
savings, boost productivity, and
that Walmart's machine
enhance overall customer
learning model effectively
satisfaction (Marx, 2005).
optimizes the timing and

52
 pricing of markdowns, being In 2021, Target made history by
the reason for a cost-saving of becoming the first major U.S.
$30 million for the company. retailer to join the Open
Besides, for the sake of Compute Project, which was
improving eCommerce sites initiated by Facebook and aimed
and its own app, technology to develop data center products
advances have to be invested that are energy-efficient,
in more and paid ardent cost-effective, and embrace the
attention to as a way of advantages of open-source
maintaining its competitive collaboration in hardware
edge. development (Wilkinson, 2022).

Strategies They have been using Today's tech-driven world means

technology on several nearly every step in the value
activities like helping their chain relies on some level of
supply chain management, technology. From making
create improved apps, better products and getting them to
e-commerce sites, keep stores (production &
managers updated and stores distribution) to advertising and
well provided. They are staffing (marketing & HR),
relying on technology to Target needs to recognize the
improve efficiency (Walmart importance of staying ahead of
Innovation Strategy Uses the technology curve. This can
Emerging Tech and involve two main areas:
Acquisitions, 2022). developing new products with
the latest tech in mind and
improving existing processes
through things like automation
software, data-driven customer
service, and research into better

53
 product design. Target's R&D
department plays a key role in
this ongoing process.(Taylor
Byrne,2018)

d) Procurement Walmart's procurement Target’s motto is “Expect more.

department takes charge of Pay less”, which accentuates the
sourcing merchandise need for an efficient
stockpiled in its stores. The procurement process in
company employs a team of bargaining discounts. Of the 35
buyers who negotiate prices different origins from which
with a variety of suppliers and Target sources its products,
ensure inventory availability. China holds the supreme
Moreover, according to significance, contributing to
Walmart (2023f), its 80.6% of goods sourced
merchants and procurement internationally in 2013 only. To
teams proactively mitigate effectively manage Chinese
risks by enumerating its imports, Target operates inland
expectations to suppliers, as consolidation centers and
well as providing adequate maintains a specialized team
resources and information on based in China (Banker, 2013).
what practices should be According to him, its
involved, and by enforcing procurement is a collaborative,
compliance responsibility as cross-functional process
needed. Leveraging its spearheaded by the merchants,
substantial buying power, who make exhaustive efforts to
Walmart obtains advantageous mitigate risks by seeking to
terms from suppliers, or may comprehend the nuances of any
negotiate purchases in bulk in market it intends to source goods
return for discounted pricing. from. That justifies its label as a
However, as the number of

54
 suppliers swiftly surpasses “competitive differentiator” in
100,000 ones, Walmart now sourcing.
has to adopt an AI-powered
Also, Target's success in
software as a means of
private-label products could be
automated negotiation (Hoek
attributed partially to the
et al., 2022).
establishment of direct sourcing
networks, particularly from
suppliers located in China (How
Target Leveraged Its Direct
Sourcing Strategy as a
Competitive Differentiator,
2019).

Strategies One of the key focus areas at Target needs to be strategic

Walmart is procurement. It about how they acquire the
has managed strategic things they need to run their
relationships with its suppliers business. This includes
to keep costs of material everything from raw materials
lower. These suppliers provide and equipment to office supplies.
standard products and services Because procurement touches so
as mentioned in the suppliers’ many parts of their value chain,
code (Pratap, 2017). Walmart from getting goods to stores
prioritizes efficiency in its (inbound) to running stores
procurement process. They've efficiently (operational) to
cultivated strong relationships getting products to customers
with suppliers who can (outbound), Target can make a
provide standard goods and big impact by optimizing their
services at competitive prices. purchasing practices. This aligns
These reliable suppliers with Porter's Value Chain
adhere to a set of guidelines Model, which emphasizes

55
 outlined in a suppliers' code, understanding all parts of your
ensuring consistent quality business to find opportunities to
and cost-effectiveness for add value, cut costs, differentiate
Walmart. This focus on yourself, or streamline processes
strategic procurement allows (Byrne, 2018).
Walmart to offer their
customers everyday products
at low prices.

4.2.2. Core Competences

4.2.2.1. Walmart

- Low pricing: Walmart's capability of keeping its prices at a low level is the groundwork
of its success. By optimizing operations management and negotiating advantageous terms
with suppliers, Walmart maintains cost leadership in the retail industry (Wood, 2023). It
also takes advantage of efficient supply chain management as well as streamlined
processes as a step to offer competitive prices in the marketplace. If not so, Walmart
could lose its market share to such internet-based shopping platforms as Amazon or eBay.
For instance, even though Amazon provides competitive pricing on certain items, such as
groceries available through AmazonFresh, a study reported by Thimou (2018) reveals
that Walmart's products are approximately 34% lower priced than those offered by
Amazon.

- Buying power: Well-established as the world’s largest retailer, with its tremendous scale
and global reach, Walmart certainly has significant buying power against its suppliers,
allowing the company to negotiate favorable terms and secure the best possible prices for
merchandise. Many brands heavily rely on Walmart's sales for their survival, proven by a
proportion of roughly 20% out of many manufacturers’ and suppliers’ revenue (Keller,
2012); as a result, this influence allows it to secure lower wholesale rates than virtually
any other retailers globally. This undeniable bargaining power not only enhances
Walmart's profitability but also fortifies its competitive position in the industry.

56
- Logistics systems: Walmart's logistics systems are evidently a key secret to its overall
success. The company operates a huge number of distribution centers, warehouses, and
transportation fleets worldwide as illustrated above, facilitating efficient inventory
management as well as practices aiming at customer satisfaction and systematic product
delivery. Thanks to its effectuation of technological advancements, data analytics, and
state-of-the-art logistics solutions, Walmart ameliorates its supply chain and
transportation costs in addition to ensuring timeliness for delivery of goods. This robust
logistics infrastructure bolsters its ability to meet customer demands and maintain its
leading position in the marketplace.

4.2.2.2. Target

- Mass marketing strategies: Target has honed its expertise in mass marketing strategies,
leveraging a thorough understanding of consumer behavior and market trends to craft
effective campaigns that resonate with its diverse customer base. Through targeted
advertising, social media engagement, and strategic promotions, Target effectively
reaches diverse consumer profiles, driving both foot traffic and online engagement. By
continuously analyzing consumer data and market dynamics, Target remains at the
forefront of innovative marketing initiatives, ensuring its brand remains top-of-mind for
shoppers across various demographics.

- Strong brand image and loyalty: Target successfully cultivates a strong brand image
and fosters unwavering customer loyalty over the years. With its iconic red bullseye logo
and reputation for offering quality products, stylish designs, and exceptional customer
service, Target has become a household name synonymous with affordability and
reliability. This brand equity not only attracts new customers but also fosters deep-seated
loyalty among its existing customer base, driving repeated purchases and solidifying
Target's position as a trustworthy retailer in the marketplace.

- Optimal internal processes: Target prides itself on maintaining optimal internal

processes that are characterized by streamlined operations and efficient supply chain
management. Through investments in cutting-edge technology, automation, and data
analytics, Target enhances its inventory management, distribution centers, and logistics

57
 capabilities, ensuring the seamless flow of products from suppliers to shelves to
customers. By continually optimizing its internal processes, Target reduces operational
costs, enhances productivity, and upholds high standards of service delivery, thereby
maximizing efficiency across its entire value chain.

4.2.3. Competitive Advantages

Upon identifying the core competencies of Walmart and Target, a VRIO analysis (Value,
Rarity, Imitability, and Organization) (Barney, 1991) is conducted to probe their
competitive advantages. Table 3 (Barney & Clark, 2007) illustrates the original VRIO
framework.

Table 3.

The VRIO framework

Is a resource or capability…

Valuable? Yes Yes Yes No

Rare? Yes Yes No

Costly to imitate? Yes No

Exploited by
Yes ←→ No
organization?

Competitive Sustained Temporary Parity Disadvantage

implications advantage advantage

Economic Above Above Normal Below

performance normal normal normal

58
Note. From Resource-based theory : creating and sustaining competitive advantage, by J.
Barney and D. N. Clark, 2007, Oxford University Press.

These retail corporations’ expansive distribution network and expertise in operations

management are the authentic testament for their competitive edge in the global retail
market. Leveraging these advantages enhances their overall effectiveness. Nonetheless,
the presence of formidable and innovative competitors poses a significant threat to both
Walmart and Target, necessitating the development of additional capabilities. A
comparative analysis of Walmart’s and Target’s competitive advantages is visualized by
the following Table 4.

Table 4.

Walmart’s and Target’s competitive advantages

Competitive
Criteria V R I O
implications

Sustained
Walmart ✓ ✓ ✓ ✓ competitive

Supply advantage

chain Sustained
Target ✓ ✓ ✓ ✓ competitive
advantage

Sustained
Walmart ✓ ✓ ✓ ✓ competitive
Buying advantage
power
Comparative
Target ✓ ✓
parity

Temporary
Technology Walmart ✓ ✓ ✓
competitive

59
 advantage

Temporary
Target ✓ ✓ ✓ competitive
advantage

Comparative
Walmart ✓ ✓
Product parity

portfolio Comparative
Target ✓ ✓
parity

Comparative
Walmart ✓ ✓
Customer parity

service Comparative
Target ✓ ✓
parity

Temporary

Global and Walmart ✓ ✓ competitive

local advantage

presence Comparative
Target ✓
parity

Walmart attracts customers by focusing on convenience, affordability, and engagement.

Customers love the convenience of returning things to local Walmart shops, which
reduces concerns about shopping online. Walmart increases brand visibility and
influences purchasing decisions, particularly among younger customers, by collaborating
with social media influencers and actively participating on platforms like Facebook,
YouTube, and Instagram. Most importantly, Walmart's dedication to "Everyday Low
Price" competitive prices appeals powerfully to budget-conscious buyers, with reduced
prices driving customer loyalty. Walmart effectively cultivates trust and loyalty by

60
 understanding its customers' wants and preferences, promoting itself as the go-to place
for value-conscious buyers looking for quality products (Walmart, 2021c).

Otherwise, Target's attractiveness originates from providing customers with a

comprehensive shopping experience that extends beyond mere retail transactions. Target
stresses consumer convenience by implementing strategic marketing campaigns and new
services like as professional sales advisers and same-day delivery alternatives, lowering
purchasing barriers and improving the in-store shopping experience. Furthermore,
seasonal displays and private label collections provide a sense of excitement and
exclusivity, increasing foot traffic and motivating impulse purchases. Target builds
customer loyalty through smart partnerships and social media participation. Meanwhile,
strategically placing impulse shopping products at the checkout will increase sales and
strengthen the company's reputation as a one-stop shopping destination. Target's success
is based on its ability to provide customers with a rich and selective shopping experience
that keeps them coming back. (Hanbury, 2019)

4.3. Positioning

4.3.1. Points of Parity (POP)

POP are basically the standards that validate a company's legitimacy in its sector. These
are the qualities that all companies should have in order to be equal and competitive.
Stated differently, points of parity are shared industry-specific characteristics that
numerous organizations have in common.

Both Walmart and Target cater to a broad demographic spectrum, offering a wide array of
products ranging from groceries to electronics, apparel, and household essentials. Both
retailers own extensive physical presence across the US, which ensure accessibility and
exposure to the public (Schuetz, 2015).

Despite some similarities in their offerings and market positions, there are some notable
distinctions between the two’s POP. Wal-Mart is famous for its wide range of products,
covering daily needs, and aiming to satisfy people who look for a great price (Jin et al.,

61
 2018). On the other hand, Target may focus more on curated assortments, including
exclusive partnerships with designers and niche brands that differentiate its offerings.

4.3.2. Points of Differences (POD)

POD, also known as points of differentiation, is what a company needs to determine once
the points of parity have been covered. These are the things that are truly unique to a
business and that provides a competitive edge. When creating marketing pieces,
campaigns and landing pages of the points of difference are what you want to highlight in
your messaging.

While sharing similarities, Walmart and Target diverge in various aspects, notably in their
branding strategies and store atmospheres. Walmart emphasizes its commitment to
offering everyday low prices, positioning itself as the ultimate destination for
budget-conscious shoppers. In contrast, Target adopts a more upscale, design-focused
approach, curating an inviting shopping experience with stylish displays and exclusive
partnerships with renowned designers and brands (Schuetz, 2015).

4.3.3. Value Proposition

Walmart's value proposition revolves around the core elements of affordability,

accessibility, and convenience.

+ Lowest possible prices is also a core part of their value proposition, achieved by a
foundation: Every Day Low Prices and Every Day Low Costs (EDLP/EDLC).
This model focuses on obtaining economies of scale, where Walmart leverages its
size to offer customers discounted prices by purchasing goods in bulk from
suppliers, negotiating lower prices and passing these savings on to customers
(Walmart, 2013). Therefore, it can create a “productivity loop” by operating for
less, Walmart can lower prices. Having low prices drives traffic to its stores and
increases sales, allowing it to again lower expenses and further lower prices
(Walmart 2013).

+ Walmart provides customers with a wide range of products, encompassing almost

every aspect of consumer goods. This assortment reinforces Walmart’s position as

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 a one-stop shop, making customers’ experience seem convenient and seamless
(Bachrach et al., 2015).

+ Besides numerous physical stores across the United States, Walmart also has
e-commerce stores with a broad range of payment and delivery options to
customers. This e-commerce site offers click-and-collect service, allowing
customers to order online and pick up their purchases at the store; thereby
facilitating a seamless experience that lets customers shop anywhere and anytime
(Walmart 2013).

Target's value proposition is characterized by a blend of style, quality, affordability, and

convenience (The Brand Hopper, 2023) , tailored to meet the needs and preferences of its
diverse customer base.

+ Similar to Walmart, Target positions itself as a one-stop shopping destination for

everyday essentials and stylish finds at affordable prices (Retail Reinvention:
Marketing Strategies of Target Corporation, 2023). Its brand identity emphasizes
convenience, style, and affordability, making it stand out in the retail industry.

+ Target's iconic slogan - “Expect more. Pay less” - succinctly captures its value
proposition, promising customers a shopping experience where they can expect
more in terms of style, quality, and service, while paying less for their purchases.
This value proposition emphasizes Target's commitment to providing customers
with both value and affordability, appealing to those who seek a balance between
quality and price.

+ Exclusive influencer and celebrity partnership also plays a major part in Target’s
value proposition. Beside countless collaborations with fashion brands like Lily
Pulitzer or TOMS, food bloggers, fashion designers, and notably, athletic-fashion
brands like Adidas and Nike, Target takes it to another level by forming alliance
with pop stars like Lady Gaga and Taylor Swift, selling exclusively their ‘Target
Version’ of albums, including unique tracks impossible to find anywhere else
(Talbot, 2020).

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4.3.4. Perceptual Map

In consumers' minds, Walmart and Target occupy distinct positions on the perceptual map
of retail. Walmart is often associated with unbeatable bargains and one-stop shopping
convenience, resonating strongly with budget-minded individuals and families. Target,
meanwhile, is perceived as a more curated and stylish alternative, attracting shoppers
seeking a blend of fashion-forward offerings and affordability.

4.3.5. Brand Mantra

The essence of Walmart's brand mantra lies in the promise of "Everyday Low Prices,"
encapsulating its unwavering commitment to offering value to customers. This mantra
underscores Walmart's mission to make essential goods accessible to all, aligning with its
reputation as a cost leader in the retail industry. In contrast, Target's brand mantra,
"Expect More. Pay Less.," embodies its commitment to delivering quality, style, and
value, encapsulating the aspirational shopping experience it strives to provide.

4.4. Marketing Mix

Walmart’s marketing mix or 4P revolves around the nature of the retail business, its
strategic goals, and industry situation. This situation presents opportunities for adopting
marketing strategies that address local, regional, and international retail industry
conditions. Walmart’s cost leadership generic strategy for competitive strategy, along
with the company’s intensive growth strategies, influences the definition of this
marketing mix.

The 4Ps are linked to the company’s strategic choices as one of the biggest retailers in the
world. This marketing mix is part of Walmart’s strategic plans to grow globally. The
strategies and tactics included in the marketing mix lead to considerable success, despite
major competitors, like Amazon and Whole Foods, as well as Costco and Home Depot
(Ferguson, 2015).

Also the same framework, Marketing Strategy of Target analyzes the brand with the
marketing mix framework which covers the 4Ps (Product, Price, Place, Promotion).

64
 These business strategies, based on Target marketing mix, help the brand succeed in the
market (Target Marketing Mix (4Ps) Strategy, n.d.).

4.4.1. Product

4.4.1.1. Walmart

Walmart's marketing strategy hinges on its comprehensive product portfolio,

encompassing a diverse range of categories such as groceries, household essentials,
electronics, and more (Marketing Strategies, Marketing Mix and STP of Walmart, 2023).

Spanning groceries, household essentials, electronics, apparel, and beyond, Walmart's

extensive product range caters to diverse customer needs and preferences, forming a key
element of its marketing approach.

Walmart prioritizes its own private label brands, such as Great Value for food and
household items and Equate for health and personal care products. These brands are
strategically positioned alongside national brands, offering a competitive combination of
quality and affordability.

Also, Walmart cultivates strategic partnerships with established brands, renowned

designers, and popular celebrities to develop exclusive product lines. These
collaborations generate significant buzz and excitement among customers, solidifying
Walmart's image as a retailer offering unique and fashionable products. By strategically
introducing limited-edition or exclusive items, Walmart successfully attracts foot traffic
to its stores, resulting in increased sales

Finally, Walmart Recognizes escalating consumer demands for environmental

sustainability, Walmart has proactively adopted the promotion of eco-friendly and
sustainable products. This commitment aligns strategically with evolving consumer
preferences, simultaneously reinforcing its image as a socially responsible retailer. This
forward-thinking approach positions Walmart to capitalize on the growing market for
sustainable products while enhancing its reputation as a responsible corporate citizen.

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4.4.1.2. Target

Standing out from the crowd is a key strategy for Target (Bhasin, 2024). They boast a
massive selection of products, encompassing everything from groceries to cutting-edge
electronics. Remarkably, a third of these items are exclusive to Target, meaning you won't
find them anywhere else. To keep things exciting for their customers, Target constantly
refreshes their collections, ensuring there's always something new to discover. This
commitment to customer satisfaction extends beyond product variety.

Target prioritizes a smooth and convenient shopping experience, whether you prefer
browsing online or visiting their stores. They go the extra mile by hand-picking products
they believe will delight customers and curate collections specifically tailored to
individual needs and preferences.

Target's dedication to well-being is another way they cater to their customers. They've
recently expanded their wellness section with over 1,000 new, affordable items
encompassing everything from skincare and fitness gear to vitamins and healthy
beverages. This focus on affordability and variety reflects Target's core mission:
providing a diverse range of products that cater to the specific needs and preferences of
their ever-evolving customer base. By offering unique brands, collaborating with popular
names, and prioritizing a delightful shopping experience, Target positions itself as a
one-stop shop for a wide range of customers.

The following categories are some among the product range in both Target and Walmart.

- Personal cares: The personal care section of Walmart offers a large selection of
goods for cleanliness, well-being, and personal grooming. Because of this, these
goods are consistently in Walmart's top-selling categories. Target also focuses on
oral care, skin care, hair care, bath & body, deodorant, etc. with products from
several brands such as Dove, Oral B, Colgate, Gillette. However, it seems that
Walmart performs better than Target when it comes to online shopping, according
to a Statista survey in 2022 (Yltävä, 2024).

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Figure 12.

Top online stores in the Personal Care segment in the U.S. in 2022, by e-commerce net
sales (in million U.S. dollar)

Note. From Top online stores in the Personal Care segment in the U.S. in 2022, by
e-commerce net sales (in million U.S. dollar) by Statista, 2023
(https://www.statista.com/forecasts/870365/top-online-stores-personal-care-united-states-
ecommercedb).

- Kids stuff: At Walmart, buyers can find various kinds of toys and books for
children. However, Target seems to have an even wider range of toys collections
compared to Walmart. They are also grouped in prices, ages, and types, coming
with hot deals. Toys for 14+ children could be found at Target, while Walmart’s
just for 12+ ones. Perhaps, Walmart is a more ideal destination for grocery and
home shopping.
- House & kitchen essentials: Walmart’s Kitchenware category offers a
wide-ranging selection of products to cater to the needs of both novice and
professional cooks, as well as those seeking essential kitchen tools and

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 appliances. This category holds a significant position among Walmart’s
top-selling items, with robust growth projected from 2022 to 2030. When putting
the terms “House & Kitchen essentials” on the Target’s search bar, almost 10,000
results could be shown. However, to compare with a top player in kitchenware
and home furnishings like Walmart, it is just a small proportion.

Figure 13.

Retailers on top of the E-commerce sales in the Furniture and Appliances Segment, 2022

Note. From Insights into the Online Home & Kitchen Industry in the US, by MetricsCart,
2023 (https://metricscart.com/insights/home-and-kitchen-market-overview/).

- Groceries: Both Walmart and Target started with small groceries, together with
the emerging demand in groceries (Repko, 2024), this field would always be one
of their mainly-focused in the product line. Known as offering the lowest price
possible, especially in groceries, Walmart seems to attract more consumers who
are having an intention to shop for food and vegetables. Of course, Target carries
those items as well, but customers who are already planning to buy at Walmart for

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 groceries might not want to stop there again. When the grocery sales of Walmart
and Sam's Club, a subsidiary warehouse club, are added together, the amount
comes close to accounting for one-third of all US grocery spending. According to
Numerator, Target, on the other hand, only makes up around 10% of Walmart Inc.
or 3% of grocery spending. With a 24% rise in sales while Target's 10.3% loss in
e-commerce, Walmart is trouncing Target in this area as well. Walmart is also
making substantial progress online (Reuter, 2023c). Therefore, there is no denying
this conviction that Walmart has a more impressive performance in grocery sales.

4.4.2. Price

4.4.2.1. Walmart

At Walmart, they consider the EDLP pricing strategy as a cornerstone in appealing to

budget-conscious consumers. Using buying power and direct sourcing, Walmart
succeeded in bargaining with the suppliers and sold almost all goods with a less
expensive price than others in the retailing industry (Why Walmart’s EDLP Strategy Is a
Game-Changer, 2023).

By understanding the psychology of urgency to incentivize immediate purchases and

constantly reinforce the perception of getting the best deals, Walmart frequently throws in
temporary price reductions or "rollbacks" on specific items. This helped Walmart a lot in
repositioning after COVID-19 pandemic and still maintains the term till now
(D’Innocenzio, 2022). These strategic promotions create a sense of "act now or miss out,"
further solidifying their reputation as a value leader.

Moreover, to completely remove any lingering doubts and build rock-solid customer
confidence, Walmart boasts a price-matching guarantee called Savings Catcher (Bjelobrk,
2023). This policy assures shoppers that they're getting the most competitive price
possible. If a customer finds the exact same product for less elsewhere, Walmart will
match it. This not only saves customers money but also fosters trust and loyalty, keeping
them coming back for more. In essence, Walmart's price-centric marketing strategy
revolves around offering consistently low prices, strategically timed promotions that
create a sense of urgency, and a guarantee that assures customers they're getting the best
69
 possible deal. By focusing on these three pillars, Walmart positions itself as the go-to
destination for value-conscious shoppers.

4.4.2.2. Target

Target also gained a positive brand image in reasonable price levels of goods. Target
always seeks ways to provide customers with an affordable and valuable experience even
if it does not perform itself as an extremely cheap retailer like Walmart. The company
aims to offer a carefully chosen assortment of high-quality products at fair rates. Thanks
to prioritizing customer experience and preferences, Target strives to maintain the same
price via online or offline shopping, together with seasonal retention campaigns. Target's
approach, which includes developing unique collaborations and collaborating with
well-known brands, may explain why its prices often seem a little more than Walmart's
(Bjelobrk, 2023).

To cater to this diverse range of budgets, Target has implemented a tiered pricing
structure. There is a significant portion of their products starting at attractive price points
like $3, $5, $10, and $15 (Repko, 2023c). This tiered system allows value-conscious
shoppers to find what they need without breaking the bank, while still maintaining
Target's reputation for quality. Eye-catching sales and special offers not only incentivize
purchases but also reinforce the perception of Target as a value leader. Target strives to
ensure their promotions are easy to understand and meet the specific needs of their
customers.

When making a grocery price comparison between Walmart and Target, Walmart’s items
seem to have a more affordable price. Although it would not be a huge gap, Walmart still
assures its value proposition of offering the lowest price possible.

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Figure 14.

Target vs Walmart Grocery Price Comparison on over 30 Common Groceries

Note. From Target vs Walmart Grocery Price Comparison on over 30 Common

Groceries, by N. Prom and S. Ed, 2024
(https://www.thewayitreallyis.com/target-vs-walmart-grocery-price/).

In general, Target's pricing is normally higher than Walmart's, however, it’s just a few
pennies. And when Target does beat Walmart's price, it's usually by a significant margin.
Ultimately, it appears that the best retailer may depend more on personal preference (and
experience) than on price.
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Figure 15.

Price comparison of LEGO Star Wars The Mandalorian Helmet Model 75328 at Walmart
and Target

Perhaps the way Target put the price down for some items is considered an “ait” for
consumer purchase. It is not ruled out that customers will go to Target to buy some kinds
of child toys, that is, the Lego items mentioned above, since the price here is much
cheaper than Walmart. Then, the other items sold on the shelves will encourage them to
purchase more than what they had planned when coming to Target. This will help
increase Target sales and profits.

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 4.4.3. Place

4.4.3.1. Walmart

As of October 31, 2022, Walmart has 10,586 stores and clubs in 19 countries such as
Mexico, Central America, Africa, Canada,.... operating under 46 different names
(Walmart, 2023d). That number for Target is 1956. This suggests that Walmart's
distribution strategy, encompassing both physical stores and online platforms, offers
substantial advantages that its competitors Target currently struggle to match.

Concerning Walmart, it isn't just about rock-bottom prices; it's also about unparalleled
convenience. One key element of this strategy is their store locations. Walmart
strategically places its stores in suburban areas, ensuring easy accessibility for a large
portion of the population. These locations typically boast ample parking lots and
convenient access from major roads, making it a breeze for customers to get in, grab what
they need, and get out. By strategically placing themselves where people live, work, and
commute, Walmart maximizes its potential customer base and ensures they're always
within reach (Marketing Strategies, Marketing Mix and STP of Walmart, 2023).

Additionally, Lim et al. (2019) opined that in a retail environment dominated by

pure-play e-commerce giants like Amazon, the landscape for brick-and-mortar retailers is
increasingly challenging. With an overabundance of retail stores and rapidly changing
consumer preferences, navigating this environment has become exceptionally tough for
traditional retailers. By recognizing that the retail landscape is evolving, Walmart has
recently made significant investments in their online presence. Instead of focusing on
integration, which may require significant time to achieve, the objective should be to
establish a seamless harmony among the various functions within the organization. This
concept could be termed as "synergization", as stated by Lim et al. (2019). According to
Holmes (2023), 79% of consumers express an expectation for brands to maintain a
consistent message and appearance across all digital platforms where they interact with
them. That is the reason why their website and mobile app offer a robust e-commerce
platform, allowing customers the flexibility to shop from the comfort of their couch
(Marketing Strategies, Marketing Mix and STP of Walmart, 2023).

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In fact, Walmart is leading the way in omni-channel retailing with them investing $1.2
billion in upgrading their e-commerce program to better serve shoppers who use multiple
channels (Waldron, n.d.). According to Waldron (n.d.), McMillon mentioned that as they
develop their e-commerce capabilities, they are reinforcing their digital connections with
customers. He noted an acceleration in the expansion of online grocery pickup and
highlighted that customers who start using online grocery shopping spend nearly 50%
more compared to those who only shop in stores. This group of customers, who access
Walmart through multiple channels, is the primary focus of their efforts.

Regarding Walmart’s application of omnichannel mindset to its strategies, ​as customers

started reducing their in-store shopping visits, Walmart responded by increasing the
availability of curbside-pickup slots for online grocery orders by almost 30%
(Howard-Sarin et al., n.d.). Currently, when a store associate delivers grocery bags to the
car parked in a pickup slot, it's often the same customer Walmart has served for years, as
mentioned by Howard-Sarin et al. (n.d.). Moreover, with the recent introduction of
Walmart+, the company anticipated that this might change the consumer habits once
more, possibly opting for home delivery (Howard-Sarin et al., n.d.). In 2023, Walmart
U.S. recorded eCommerce sales totaling $53.4 billion, marking a growth of
approximately 12% compared to the figure from 2022 (Ozbun, 2024). On February 20,
Walmart Inc. disclosed that its U.S. online sales experienced a 17% increase for the
fourth quarter of fiscal year 2024, which concluded on January 31 (Meisenzahl, 2023).

But convenience isn't just about how you shop; it's also about product availability. That's
where Walmart's efficient distribution network comes in. They operate a vast network of
strategically located distribution centers, ensuring a smooth flow of products from
supplier to store shelf. This minimizes delivery times and allows Walmart to quickly
restock shelves, keeping their customers happy and ensuring they never have to wait for
the essentials they need.

By strategically placing stores, investing in a robust online presence, and maintaining an

efficient distribution network, Walmart has created a winning formula for convenience,
solidifying its position as a retail powerhouse that caters to the ever-changing needs of its
customers.
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4.4.3.2. Target

Around the second half of 2020, Target decided to transform their network to improve the
commercial viability of the business (Target, 2020). Typically in Australia, approximately
52 Target Country stores concentrated in rural areas were transformed into smaller Kmart
stores, while the remaining 50 Target Country stores were closed. They focus more on
E-commerce such as developing their online business, which is available and accessible
across the country at www.target.com.au. Also, they restructured by replacing Target
stores with small-format officeworks or bunnings stores in appropriate locations. As a
result, concerning Target’s ecommerce sales, it witnessed an approximate increase of
35.63% from 2020 to 2022, which was a huge acceleration emphasizing the growth of
Target’s online presence compared to its brick-and-mortars (Peters, 2022).

Figure 16.

E-Commerce net sales of target.com from 2014 to 2022

Note. From E-Commerce net sales of target.com from 2014 to 2022, by Peters, 2022
(https://www.statista.com/forecasts/1218314/target-revenue-development-ecommercedb).

75
 Currently, Target is embarking on a two-pronged strategy to solidify its presence in the
retail landscape. The first prong focuses on transforming their physical footprint. This
ambitious plan involves both expansion and renovation. Roughly 20 new stores are on the
horizon, ranging in size to cater to diverse customer demographics (Bhasin, 2024). He
affirmed that mid-sized locations will cater to suburban areas, while smaller format stores
will bring the Target experience to urban centers. This expansion allows Target to tap into
new neighborhoods and attract a wider range of customers.

But they're not neglecting their existing stores. A revamp is underway for approximately
175 locations. These renovations will integrate modern design features and updated
facilities, aiming to create a more inviting and enriching in-store shopping experience.
The second prong of Target's strategy tackles the digital realm. They recognize the
importance of a seamless online experience, and are investing heavily in enhancing their
digital platforms. These advancements leverage technology to personalize the online
shopping journey and streamline the overall process for added efficiency (Bhasin, 2024).

However, Target acknowledges that the physical and digital worlds can (and should)
co-exist. They're introducing exciting brand collaborations and unique in-store offerings,
like the integration of Ulta Beauty at Target locations. This strategy creates a more
immersive shopping experience, allowing customers to discover new products and brands
seamlessly. Finally, Target understands that convenience is king. They're advancing their
fulfillment capabilities by expanding their same-day service options, including Drive Up
and Order Pickup. The introduction of Drive Up Returns takes convenience a step further,
allowing customers to effortlessly return unwanted items from the comfort of their
vehicles. By focusing on both physical and digital experiences, coupled with an emphasis
on convenience, Target is well-positioned to remain a leader in the retail industry.

4.4.4. Promotion

Walmart and Target have two different ideologies for marketing their products. While
Target wants a more youthful audience and catchier marketing campaigns, Walmart opts
to simply offer the lowest prices for consumers (Goldstein, 2021).

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4.4.4.1. Walmart

Walmart doesn't leave customer awareness to chance. They employ a multi-pronged

advertising attack to ensure their message reaches far and wide. This approach utilizes a
strategic mix of traditional and digital channels. Television, radio, print media, and online
platforms are all weapons in Walmart's advertising arsenal. This allows them to reach a
massive audience, effectively communicating their core value proposition of unbeatable
prices and vast product selection. Ultimately, these advertising efforts aim to drive traffic
to both Walmart's physical stores and their website, ensuring customers know exactly
where to find the best deals (Marketing Strategies, Marketing Mix and STP of Walmart,
2023).

But the advertising blitz doesn't stop once customers enter the store. Walmart understands
the power of in-store promotions. Eye-catching displays, strategically placed aisle-end
caps, and clear signage all work together to highlight special offers and limited-time
deals. This creates a sense of excitement and urgency, subtly encouraging customers to
explore further and potentially make impulsive purchases. The digital world isn't ignored
either. Walmart leverages social media platforms, email marketing, and targeted online
ads to engage with customers in their digital spaces. Personalized recommendations,
strategically placed Walmart ads, and exclusive online deals all work together to capture
customer attention and drive online sales.

Finally, Walmart recognizes the power of loyalty. Programs like "Walmart+" offer
members a variety of perks and benefits, including free shipping, exclusive discounts,
and even early access to sales events. These incentives encourage repeat purchases and
loyalty, giving customers a compelling reason to choose Walmart over the competition.
By strategically combining traditional and digital advertising with effective in-store
promotions and a loyalty program that rewards customers, Walmart has created a
comprehensive marketing strategy designed to keep them top-of-mind and ensure
customers consistently choose their stores for all their shopping needs.

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 4.4.4.2. Target

Target isn't shy about pulling out all the stops when it comes to attracting customers. It is
stated by Bhasin (2024) that they employ a diverse marketing strategy that seamlessly
blends traditional and digital approaches. On one hand, they utilize established channels
like television commercials, newspaper and magazine placements, and social media
platforms to build brand recognition and reach a wide audience. This "above the line"
strategy ensures their brand name stays at the forefront of consumers' minds.

On the other hand, Target delves deep into "below the line" tactics to engage specific
customer segments and drive them to stores or online platforms. This includes targeted
marketing through flyers, coupons, and in-store promotions. Additionally, they leverage
the power of the digital world through targeted online advertising and active social media
presence on platforms like Instagram, YouTube, Facebook, and Twitter.

Furthermore, Target understands the power of a good deal. They strategically employ
various promotional offers to incentivize purchases and entice new customers. These
offers encompass a range of tactics, including "buy one, get one free" deals, seasonal
discounts, free shipping for online orders, and ongoing discounts on specific products or
throughout their entire online store.

By thoughtfully analyzing and adapting its marketing mix, Walmart and Target can
continue to thrive in the dynamic retail landscape and maintain its position as a dominant
force in the global market.

5. Conclusion

Overall, both Walmart and Target have achieved unprecedented success through
well-thought-out marketing strategies. Elements including core competence, competitive
advantages, positioning and marketing mix were harmoniously combined to achieve their
goals.

However, in order to leverage existing strengths and seize opportunities, we would like to
put forward some recommendations that may help the company achieve those things.

78
5.1. Walmart

With prospects in the global retail market, Walmart has the business strengths to sustain
growth through foreign operations and e-commerce expansion. However, the company
needs to implement new strategies to overcome its weaknesses, such as the limited
international presence; and the threats to its retail business, like competition and supply
chain disruptions. Considering these key external and internal elements, an applicable
recommendation is for growing Walmart’s e-commerce operations. Furthermore, in order
to reach more consumers, it is advised that the corporation open additional sites outside
of its current retail marketplaces. This can entail setting up modest grocery stores in
regions with a high concentration of low-income people. This will grow its customer
base, improve productivity, and increase revenue and market presence. Last but not least,
the ultimate aim should be to make Walmart a market-leading retailer and online retailer
offering its products and services globally.

5.2. Target

As one of the largest department store chains in the United States, Target has been
successful in building a reputation as a retailer that offers high-quality goods at
reasonable costs, prioritizes client satisfaction, and is dedicated to addressing issues of
financial stability and inequality.. However, with only 5,6 % of market share in the
United States as of Q3 2023 (CSI Market, 2023), Target must improve in several areas in
order to stay in competition with its biggest rivals such as Walmart, Costco and Amazon
and to mitigate the risk of substitutes and new players in the industry. First and foremost,
Target needs to expand its presence in the United States and explore the international
market.Second, given the evolving nature of consumer purchasing habits, Target needs to
upgrade its e-Commerce offerings and make better use of advanced technologies. Thirdly,
Target should aim at lowering its prices by expanding its supplier network.Lastly, in order
to fulfill more of its consumers' everyday demands, Target needs to diversify its portfolio
of products.

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