The TJX Companies, Inc. is a global off-price retailer. There are many strengths to their strategy. First off, their major commitment is value. Their goal is to provide customers with brand name products for 20 to 60 percent less in price. They have created this model by developing strong relationships with suppliers and distributors. In fact, they currently work with 18,000 vendors in over 100 counties. They have created a shopping experience that continuously makes shoppers feel like they are getting an amazing deal. Other discount retailers have honed in on value, but not the way TJX does it. The TJX Companies, Inc. has secured lasting relationships with so many vendors due to the flexibility of their supply chain and the number of markets that vendors have the opportunity to work in. TJX will agree to purchase less than full assortments, or mix-match merchandise, which gives vendors an incentive to work with them. In fact, TJX has developed such a flexible network that they are able to make much faster changes to merchandise than competitors. Their fast-reaction process allows them to consistently maintain a trendy selection, while also allowing vendors to choose how they contribute to current inventory. The TJX Companies, Inc. constantly receives new merchandise from vendors, and sometimes they only offer one of a specific item in the store. Shoppers continuously feel like the merchandise they find is unique because there aren’t a lot in stock, and it’s nearly impossible to find that one item anywhere else. On top of that, they are given a “treasure hunt” experience with the layout of the store. Everywhere you turn there are opportunities to find high-fashion apparel, trendy home décor, or highly reputable beauty products. The TJX Companies, Inc. are dedicated to fashion, price, and quality, which is an amazing combination to offer. Customers feel that the extra money they may be spending at TJX stores compared to Target stores is worth it because of the name brand label and the unique feel. But what supports the overall TJX model is their knowledgeable and fast-acting employees. TJX has made it a top priority to invest in the training of their employees. They also move talent around to the countries or brand that are in need. This network of shared resources have kept employees experienced and open to new innovation. One final aspect of TJX’s business strategy that has kept their profits high is how their business model has turned into a competitive advantage. TJX does not have to slash prices to drive traffic. Their biggest commitment is to keeping their foot traffic high, but that is done by promoting their “treasure hunt” experience. They have invested in highly-interactive marketing campaigns around the globe, which keeps customers engaged and curious about what’s in stock today. TJX has an average merchandise turnover of 55 days, while competitors have an 85-day turnover. Therefore, people come in because the value and unique, quality products are a guarantee.
International Strategy
TJX operates a global phenomenon. In a world of constant lost sales, TJX is consistently bringing higher sales and profits. One of the reasons TJX has seen so much success internationally is because they operate several brands and integrate them into the countries and continents that they believe they are best suited for. For example, TJX just completed their expansion into Australia with the acquisition of the Trade Secret chain. With the purchase of these 35 stores, TJX has begun understanding the Australian market, supply chain, and fashion trends. They are looking into which of their other brands would compete best in that market. Their constant dedication to innovation and expansion has kept their business growing, but their slow and steady actions have kept them profitable. Other attributes that have aided the TJX Companies, Inc. international strategy is their flexible and widespread supply chain. They create long-term relationships with vendors all throughout the globe. This keeps their inventory assortment very unique since customers can literally find merchandise that may be sent from halfway across the globe. The TJX Companies, Inc. also use a lot of innovation in their international strategy. The company have invested so much into creating integrated and synergized retail chain that allows all great ideas to be integrated in other brands or chains within their operations. They never shy away from testing new ideas or new ways of doing things in hopes to always make room for growth. TJX may test an idea in one market, and then based on its success, move that idea into multiple markets. They have created a widespread capacity for acquisitions, expansions, and the integration of new brands. They are always one step ahead of the competition, but make these moves on a slow and steady scale. Finally, TJX has been bestowed with the first mover advantage in the global market. They have created a sustainable business model by this time, and it has been nearly impossible for other companies to compete. For one, they are the number one off-price retailer in the United States and around the world. Second, they have such a dynamic array of brands to fit the needs of diverse customers in other countries. Third, they have mastered their supply chain and price structure by now that allows them to offer low prices and a great in-store experience. They have mastered their trade while other retailers are just trying to stand on their own two feet.
Competitive Motives
To this day, the TJX Companies’ business model and strategy has been nearly impossible to replicate. They have secured so many vendors in order to offer a wide assortment of fashionable products. But most importantly, their company mission is based on value. Customers know that they are always getting a deal when they shop with TJX. Brand name products are always 20 to 60 percent cheaper than they are in department stores. Because of this, the TJX Companies, Inc. has landed a recession-proof business model. Customers feel good about spending money at TJX because they know they’re getting quality for a low price. One of TJX’s major competitive advantages at this moment is the downfall of department stores. For example, Macy’s is currently closing many stores as they lose foot-traffic. However, as Macy’s customers lose a place to shop for those brand name labels, they can quickly turn to TJX stores, like TJ Maxx, to fill that void-and for a cheaper price! As more and more department stores lose profit, TJX has an opportunity to gain profit. While on the note of department stores, many large chains haven’t seen the success that the TJX Companies, Inc. has in the off-price retail market because they are cannibalizing themselves. By a store like Kohl’s for example opening up an off-price retailer, they are giving their customers a Kohl’s replacement. Since there is a smaller profit margin on items purchased at the Kohl’s Off-Aisle store, they are actually eating into their own profit. Customers now understand that if they just wait a little while, they can probably get an item that they want from Kohl’s a little further down the line from Off-Aisle for a cheaper price. Thankfully, TJX has complimentary brands, and all of them are dedicated to name brand products for a high-value price. Another great competitive advantage that the TJX Companies, Inc. has over competitors is their speed. They have created such a strong supply chain system that they actually have the capacity of a fast-fashion retailer. Once they notice fashion trends within their stores, they can contact vendors and ask for highly requested merchandise. TJX has achieved this by always focusing on innovation and improvements. They open new distribution plants when possible and keep an integrated and synchronized system that allows their distribution network to be as efficient as possible. This keeps their product assortment one step ahead of the competitions’ at all times. TJX’s great distribution network keeps merchandise assortments fresh and trendy. Since customers can always expect uniqueness and value, they keep coming back on a consistent basis. There is a constant feeling of urgency to buy from TJX stores because you never know when it will sell out and if you’ll ever see it again. This urgency has brought them to a great turnover rate of 55 days, compared to the competitors’ 85 days in inventory. The TJX Companies, Inc. also combats global competitors with their marketing campaigns. They have invested a lot of resources into marketing slogans and advertisements that resonate with their customers. For example, they like to portray the importance of self-confidence, and how you can achieve that feeling with quality products from TJX stores. Not only will you have name-brand products, but you will feel better about yourself for being financially responsible and saving money on high-end products. They have carried similar campaigns across all media outlets, through all current markets. On top of all of the great strategies discussed above, the TJX Companies, Inc. had the first mover advantage which has continued to give them a huge leg-up on the competition. They recognized the value of their business model decades ago, while department stores are just trying to reproduce their successful structure now. Other off-price retailers have not been able to reach the scale of TJX rose to the leading retailer so quickly before any competition emerged.
Market Share
The TJX Companies, Inc. has gained a fair and competitive amount of market share through their consistent acquisitions and overall company growth. They have even been deemed Amazon-proof due to their product uniqueness, which is a huge compliment in our e-commerce driven world. They keep their relevance high by staying true to their quality/value balance within their company. In fact, many analysists have deemed them untouchable for at least the next decade in the off-price retail industry. They have extended themselves in the apparel, beauty, accessory, home goods, and outdoor markets. TJX does not need to waste time making a name for their brand-name merchandise, so they have used that time to make a name for innovative network.
The chart below shows the most profitable brand within the TJX company. It also compares the top global markets to eachother.
The TJX Companies. (n.d.). Retrieved December 17, 2016, from http://www.tjx.com/investor/investor_factors_growth.html
The table below compares TJX's current market share to some of their top compeitiors-Sears, Penny's, Macy's, Kohl's, and Ross.
TJX's Competition by Segment and its Market Share. (n.d.). Retrieved December 17, 2016, from http://csimarket.com/stocks/competitionSEG2.php?code=TJX
Below is a chart that compares revenue growth among TJX, Macy's, and the GAP. The data is from November 2015.
Cardenal, A. (2015). Here's Why TJX Is Crushing the Competition. Retrieved December 17, 2016, from http://www.fool.com/investing/general/2015/11/23/heres-why-tjx-is-crushing-the-competition.aspx
Below is a chart comparing TJX's market value to the market value of stock's within the industry. One of their closest competitors listed is ROSS.
Stock Comparison: Compare TJX Companies, Inc. (The) (TJX) to Other Stocks. (n.d.). Retrieved December 17, 2016, from http://www.nasdaq.com/symbol/tjx/stock-comparison