Response 1:
For my project, I have chose Target. As one of the top retailers, they offer products they call "cheap chic", which means quality products at a lower price.
I actually work for their warehouse division in their Regional Distribution Center or RDC. As an RDC, we take the products directly from the manufacturer and distribute the freight to the other distribution centers, who then distribute to the stores. Within the last two year, this warehouse has grown exponentially. They have added a new department, aptly named Dotcom. This segment deals directly with online purchases.
Within the last year, this department has grown to the point of needing its own building. However, there is no room for that on the premesis. From what I understand, they are taking half the building, roughly 1 million square feet, solely for this department to flourish and using lean practices to move all the other departments in to a smaller space.
The plans, as I understand, are for the building to be overtaken by this new department and for the RDC to be incorporated with another branch 30 minutes down the road. It will be interesting to see what will happen in the next few years as online sales become more prominent.
Challenges and Opportunities
As of last year, Targets biggest challenge is competing with Wal-Mart and Amazon in online sales. Even though Target competes in a relatively stable market, they are losing market share to these two monster companies. Sales last year declined just slightly over 1%, which is a vast improvement over the 5.8% of FY2016. While they are working toward building their online presence, it may not be enough to overtake or even catch up to the sales we see from these other businesses. Amazon is laughably out in front of anyone in that regard.
Changes in the sector
Retail has always been very good at going with the flow of the changes in customer preferences. The biggest challenge, therefore, is that people change so fast its hard to keep up with them. Companies are moving toward technologies to not only aggregate the information so the store can organize better to satisfy the customer but it will also collect the individual tastes of the customers to better predict what it is they want. Basically, they're looking to technology to help create a better experience in the stores.
Exploring the Issues
The biggest issue I'd like to explore is the gap in online sales and how to close that gap to gain the market share back. As so many companies move to the internet, I'd like to explore ways of boosting those sales to get our customers thinking of us with more of an online presence.
Response 2:
I have selected Frontier Airlines because they are a newcomer to the transportation industry, more specifically the airline industry. They are a breakthrough company that has to cause a major disruption amongst their competitors. Established in February 1994, Frontier had seen its share of challenges, however, one thing has remained consistent, they have retained their position as Americans top low-cost Airline.
Serving over 86 destination across the United States and internationally, there is nowhere for Frontier to go but up. Although Frontier is not currently a public trade company they are positioning themselves to become an IPO in the very near future. To date, this Denver based airline is considered the 8th largest airline in the US.
What challenges or opportunities is it facing right now?
To date Frontier is facing challenges in the following areas:
Fleet expansion
Staffing numbers
Pilots & Flight Attendants
Competitive wages & Benefits
If Frontier can meet these challenges they can increase their daily number of flights and destinations.
What important changes are going on in the sector?
The notable changes or disruptions that are occurring the in the Airline industry are the low-cost airline companies such as Frontier, Elegant, and Spirit who are give industry giants such as Delta and United a run for their money. With Frontier leading the charge.
What issues are you most excited about exploring?