Mission and Vision of TJX Essay

Introduction

The TJX Corporation was incepted in the 1970s when its founder, Ben Camaratta, took up an opportunity to set up an off-price retail chain. The concepts succeeded since it was attractive to other retailers. Today, TJX is an off-price retailer of home fashions and off-price clothes. Its operating structure is divided into four parts; Marmaxx, TJX Canada, TJX International, and HomeGoods. The four segments of TJX deal with goods such as family apparels with examples of accessories and footwear. Its stock of home fashions includes lamps, rugs, giftware, house decor, cookware, soft home, and accent furniture. The company has expanded into the pets' food industry and jewelry industry in more recent times.

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The mission of the company is aligned towards boosting customer sales. It is "delivering rapidly changing assortments of high-quality brand name merchandise at prices between twenty percent and sixty percent lower than other departments' and specialty stores' regular prices each day." The corporation's vision statement is "to grow globally as an off-price value company". It even has a tagline, which is "Get the maximum for a minimum." As a leading company in the home fashions and apparels retail sector, the statements above are suitable as they are short and memorable taglines, which it uses to identify its products and identity in commercials and adverts, thereby focusing on attaining profitable sales.

Internal assessment

Over the years, the leading off-price retailer of home fashions and apparel in America, Europe, and Australia has experienced a steady financial growth trend. At the end of the 2013 financial year, it had a revenue of $2.7 billion and a net income of $2.9 billion, which increased to a $2.9 billion revenue and $2.2 billion profit the following year. In 2015, the revenue trajectory continued to grow as the company garnered a $30 billion revenue and a drastic increase in profits to $2.7 billion. In 2016, the revenue continues to soar to a recorded $33 billion and a record profit of $4.4 billion at the end of the year.

The internal audit of TJX's performance reveals that it has numerous strengths. For one, it is a tremendous conglomerate that includes four different sectors, with at least 50 stores across all states in the USA, 10 Canadian provinces, and a couple more stores situated across Europe. Its huge size enables the company to tap revenue from a wide customer base and it has even secured a slot in the Fortune 500 list. The list captures and describes financially stable companies with the best management and financial performance annually. As such, TJX is in a position to influence its stakeholders, say its suppliers and partners, and even take advantages of opportunities such as expansion or acquisition of new assets, since it has adequate capital to implement such decisions.

Also, TJX has an exceptionally good relationship with its vendors and customers. It is constantly evaluating strategies that enable it to take advantage of opportunistic chances. For example, TJX's management and logistics team take advantage of manufacture over-runs, order cancellations, and closeout sales. It follows then, that TJX buys merchandise on an ongoing basis and manages to keep track of seasonal needs, trends, and preferences. As far as customers are concerned, TJX's pricing is ideal since it slashes twenty to sixty percent of the prices offered in regular stores. It passes this message to customers via multiple advertising platforms and as a result, it has a large market share.

TJX has some weaknesses that suggest a need for improvement. First, it lacks stores in the Middle East, Africa, and Asia. The three continents offer a lucrative market that would be receptive to its products. The entity's management has introduced some weakness to the company as well. For instance, it has failed to remodel its existing stores, which could prove to be challenging in the future. It has also failed to control operating expenses, which have risen steadily and peaked in 2017. The lack of diverse variety of male clothing and apparel with an athletic appeal in the store limits its revenue channels.

TJX's 4P's of marketing enhance its image among consumers and increase its ability to convert potential sales into actual sales. The price range of its goods is 20% to 60% lower than the one offered in conventional stores, which makes customers eager to spend and even more so due to the ever-changing assortment of bargains and sales deals (Burns, Mullet, & Bryant, 2016). In terms of product, the variety offered by the store enables consumers to buy multiple goods under one roof, which offers customer convenience. Moreover, the wide assortment of products which include family apparel and home appliances is ever changing to capture the preferences and tastes of consumers. The promotion strategies used by TJX's stores are primarily digital media such as television and radio. The company reportedly spends an average of $100 million in advertising annually and intends to increase that budget following the success of its promotions. The company is fond of using catchy taglines such as "Bring Back the Holidays", "Shopportunity", and "Spending Intervention" in its adverts to promote self-confidence, self-acceptance, and shopping discovery as a selling point. The aspect of place for TJX refers to its 3,700 plus stores located in Europe, America, and Australia. The location of these stores is strategic to enable the entity to compete aggressively with mall outlets and other stores. Moreover, the launching of an online platform improves its distribution channel since it caters for online shoppers who are unwilling or unable to engage in physical shopping.

External Assessment

Compared to its competitors, TJX's average sales growth was at 15.5% in 2017 versus an average revenue growth of 7.5% from its competitors (Westerink, 2016). The company has been producing impressive financial performance over time despite existing in a challenging landscape with aggressive competitors. TJX faces the fiercest competition from companies like Gap and Macy's, even though the differences in financial performance varies remarkably. In the last 27 quarters, TJX has experienced steady revenue growth whereas Gap is facing a revenue decline. Gap's total sales have been shrinking by an annual average of 2% globally and 3% in America since 2015 (Holtrop, 2017). Similarly, Macy's has been reporting a decline in sales. The company is one of the best-run entities yet it has been experiencing an annual sales decline of around 4%. The most logical explanation for TJX's competitive advantage is its scale advantages coupled with the reliance on a smart business model. The entity engenders a competitive advantage from its tendency to source goods from over 17,000 vendors dispersed across the globe, meaning that it has a unique product mix and undercuts competitors its pricing.

Competitive Profile Matrix

The external audit for TJX reveals that it has some opportunities to utilize. First, the women's clothing accounts for 62% of the entire industry and as such, the company can introduce athletic wear, one of the fastest growing apparel categories. Also, the industry's trend is that off-price retailers will continue to experience market expansion, part of which will come from traditional sores. Despite having immense opportunities, TJX faces some threats. First, the American market is highly fragmented and has over two hundred thousand retailers in the industry. The low barriers to entry in this industry put TJX at risk of competition from new entrants. At the same time, retailers are developing a preference for selling their poor-selling attire in-house rather than selling to off-price stores, which is a threat to TJX's supply chain.

Strategic Options

Following its strengths, TJX should take advantage of its technology to create strong communication methods and create a straight organizational chart and this combination will give it a professional look. In terms of weaknesses, TJX should stop being over-dependent on the USA since a slight change in the economy can result in huge revenue losses. In terms of opportunities, TJX should explore emerging markets such as China and India. It should also diversify its interior designing goods and stock electronics. Also, expanding its online presence can secure its future as a top-selling retailer. In matters of threats, TJX should find ways to cut is operational costs and transfer the cuts to customers in terms of lower prices. Most of its competitors now offer lower prices and if they expand, they could affect TJX's market share and revenue.

Recommendations

TJX should revise its stocking policy across all stores so that 10% of the apparel will be athletic. Following the expansion, the retailer should inject $100 million into advertising the athletic appeal merchandise. It should further invest $500 million into setting up new stores in China and Nigeria, and $1 billion in remodeling existing stores. Another recommendation is to acquire Macy's, one of its competitor's stores that are performing poorly before another company makes the deal and steepens the existing competitive rivalry.

Heading Update

TJX reported its sales revenue and profit in the fourth trading quarter ending on 3rd February, 2018. In the fourteen weeks for that fiscal year, the entity's net sales had increased to $11.00 billion, an increase of 16% from the previous quarter. The net income reported at the end of the fourth quarter was $877 million and the reported earnings per share stood at $1.03. The financial performance of the entity at the end of the fiscal year, ended February 2018, indicated the net sales value at $35.9 billion, which is an 8% increase compared to last year's performance of a 7% increase. The net profit for the same period was $2.6 billion whereas the diluted earnings per share stood at $4.04, an increase from $3.53 in the previous year. After adjustments, the fiscal year's diluted earnings per share stood at $3.85 following the exclusion of a combined $0.7 negative impact engendered by debt extinguishment charges combined with pension settlements.

References

Burns, L. D., Mullet, K. K., & Bryant, N. O. (2016). The business of fashion: Designing, manufacturing, and marketing. Bloomsbury Publishing USA.

Holtrop, N. (2017). Leveraging data rich environments using marketing analytics. Rijksuniversiteit Groningen.

Westerink, G. (2016). Social Media Strategy for Winners (Subsidiary of TJX Companies Ltd.).