Michael Porter's 5 Forces for Target Research Paper

Michael Porter's 5 Forces for Target - Research Paper Example As Labrador states, â€Å"the lower the barriers are, the easier it will be for competitors to come in†. Future competitors of Target include both local and international retailing companies. Therefore, to remain on the top positions in the country, the company continuously monitors its business strategy of providing best quality products to customers in the lowest prices. The bargaining power of suppliers is neither very strong nor very weak. Although Target provides good support to suppliers’ businesses, suppliers have been able to retain the power to control products’ prices because of increased competition between the discount stores operating in the United States. Along with increased competition, lowering of import barriers and low cost international labor are some of those factors, which have directly affected the bargaining power of suppliers. â€Å"The ability of consumers to buy substitute goods leads to the buyer power force† (Vitez). Buyers have a strong bargaining power in the United States. Although Target is operating a number of discount stores all over the United States, but the ever increasing number of other discount companies has strengthened the bargaining power of buyers. Customers can move to some other store if they find that store offering low prices as compared to Target. Target needs to keep the prices low and competitive in order to maintain its market share. Target has low threat of substitute products. The reason is that discount stores of Target and all other companies offer low prices to the customers as compared to general stores. Customers always want to buy products from the stores, which offer low prices. Although used products’ stores also offer low prices, but customers prefer to buy new products with the same prices that used products’ stores offer. Therefore, Target is far away from the threat of