Businesses use geographic diversification to expand their market share, and increase their income. To ensure a company’s longevity, it is important to fully understand its market. Porters Diamond Theory of National Advantage describes how feasible and competitive a company can gain from expanding its operations in an international market. Porters Five Forces analyzes industrial competition in new markets to identify potential threats and opportunities to improve a company’s market position. Target Corporation will see an increase in revenue due to its expansion into France.
Krogerus (2016) and Tschappell (2018) say Porter’s Diamond theory can help businesses assess various economic components that could be investigated to ensure sustainability. Factors condition evaluates the availability and quality production components like capital, land, and human resources. France has a skilled labor force and the target company may want to consider expansion. France boasts a 99 percent literacy rate, and approximately half of its population holds advanced degrees. Skilled labor may help increase creativity and innovation. France has a stable economic environment with an average annual interest rate at 0.31 per cent. France’s high per capita GDP means that there is a lot of demand. This indicates that French consumers have high purchasing power. The country’s average per-capita income in 2020 was $37,000. This allowed the vast majority of French people to shop at department stores. Target may have support from many affiliated businesses. Target could enter into agreements with logistic companies such as Vanguard and Daque to deliver their goods. There is a lot of industry competition because many large chains and international firms offer comparable services.
A low bargaining power will be a key factor in the company’s success. The business can attract clients more easily and have a higher turnover rate by utilizing the high level of digital connectivity and the telecommunications infrastructure. Statista Research Section reports that in 2022, social media will be used by more than 37 million people and 70% of France’s population. To increase sales and revenue, the organization must use digital marketing strategies to establish brand equity and customer loyalty. The firm might also use low supplier bargaining power to reduce operating costs. This strategy could be combined with a cost leadership strategy to gain a wider market. To ensure quality supply chains, value chain operations and a reliable supply chain, the company may also enter into strategic agreements with suppliers. The risk of getting in is low since the creation of a chain store for departmental stores takes substantial financial resources.