1. Target Corporation Current Strategies

1.  Target Corporation Current Strategies

Strategy / Definition / Example(s)
Forward integration / Gaining ownership or increased control over distributors or retailers / ·  Target and the GILT GROUPE collaborate on virtual pop-up store to sell Target designer clothes before it hits Target chain stores (Billard, 2010).
·  Owns its 4 food distribution centers, 29 distributions centers and 3 import warehouses (Target, 2010, History).
·  Brokers more agreements with local farmers (2010).
Market Penetration / Seeks increased market-share for current products/services via greater marketing efforts / ·  Target Collector Bears and the Giving partnership (Target Corp., 2010).
·  ’12 Days of Kickmas’ walk in and win sweepstakes mobile app (Newswire, 2010).
·  Free Holiday Soundtrack Giveaway (Newswire, 2010).
·  Target rewards Credit Card offers 5% off every purchase (Clifford, 2010, p. 2)
·  Free shipping Nov. 21-Dec. 11
·  Daily Deals up to half off one day only this holiday season (Target Corp., 2010, Seasonal).
Market Development / Introducing Target products into new regions / Opened several new Super Target and Target stores including new entry in Manhattan (Kaminer, 2010)
Ten new Target stores 10/10/10 (NYT, 2010)
Target in India (Target India, 2010)
Product Development / Improving goods/services and/or developing new ones to increase sales / ·  Adding to its Market Brand food products
·  Adding fresh produce to many of its stores to encourage one-stop shopping
·  Adding Famous Designers’ exclusive discount collections; i.e., Eugenia Kim’s hats and Steven Burrows
Unrelated diversification / The addition of new, unrelated products and/or services / 2005 & 2008 Target Commercial Interiors (9 locations, 4 Office Stores in 3 states and Online presence)
Divestiture / In 2004, Target has sold off Marshall Field’s and Mervyn’s

Target Corporation like its retail competitors have experienced significant challenges due to steady U.S. unemployment, rising fuel and energy costs, and the economic downturn itself. However, Target Corporation in recent years has divested itself of Mervyn’s and Marshall Field’s in order to refocus its gaze upon national and international expansion. Vis-à-vis Wal-Mart its primary competitor, Target pales in the international arena. However, Target Corporation has reflected inward and assumed many more coasts and responsibilities; i.e., Target Corporation has bought four food distribution centers, thirteen distribution centers, three distribution centers for Target.com and even established three import warehouses (Target Corporation, 2010, Corporate). By doing so despite national Target store and Super Target store expansion, it has enable Target Corporation to poise itself for more intense competition. For economic reasons, customer demands for good quality merchandise and services with low price guarantees, more one-stop shopping and the like Target had already aimed toward fulfilling these desires and realities. Moreover, its attention to the customer, to the shifting economic constraints that drive purchases, merchandise and quantity, has certainly made it a more viable retail competitor.

While it has recently expanded into India, limited data is available. Although it has also established Target Commercial Interiors in the last decade with nine locations, four stores, online and international presence in India, financial and corporate data about these pursuits are currently unavailable. Therefore, it is impossible to ascertain how much investment these ventures attract and/or assess their returns. Nevertheless, they demonstrate diversification and international expansion targeting Wal-Mart more directly.

Because most of the ground work and cost-containment has already been engaged, Target stores geographically located in 49 states and India, in most US neighborhoods, Target could realize the benefit of higher gas prices and the need for more one-stop shopping. Moreover, Target Corp. could also reap the benefits of more people requiring or desiring more designer merchandise without the designer price. For all these reasons, Target should carefully monitor the customer trends and the economics that drive them. However, Target Corporation has largely assessed the market with fairly accurate certainty.

2.  Target SWOT ANALYSIS

Strengths / Weaknesses / Opportunities / Threats
Presence in 49 States and India / Only recently integrating fresh foods in its Target stores / Economic downturn
Inspiring more downturn choices and budget buys / Economic downturn limiting available shopping funds
More than 1700 US stores, so Target stores are close by / Few SuperTarget stores / Higher gas prices
Mean people use more one stop shopping and closer to home / Wal-Mart has more dominance as one-stop shopping
Highly adaptable to shifting economics and distribution problems; i.e., tough economic times saw Target move to lesser quantity items / Low price High quality demand / Dollar Stores where people can buy food and cleaning supplies for less
Some exclusive designer names
and merchandise / Trader Joe’s offering organics for less
Recent diversification-
Commercial Interiors / Farmer’s markets
Solid Financial base / Rising costs
Exclusive shopper services and discounts for loyal customers
Owns a food distribution center in Florida / Price Wars
Additional online store presence through partnership for exclusive pop-up deals

Based upon the chart below, Target and Wal-Mart are each others’ main competitors in the retail division. While certain statistics are available for Wal-Mart specifically detailing its Wal-Mart stores and its Sam’s Club outlets and budgets, Target lacks such data. Therefore, I used the chart below to assess the BCG positions among the competitors. More importantly, perhaps, due to the lack of information available through Target Corporation financial and retail reports, I used the 2009 annual reports and contrasted growth with that of industry. Additionally, I also analyzed the decline in its credit card position and included it on the second BCG matrix.

Target v. Wal-Mart (US), 2009
Target / Wal-Mart
Total Sales (millions) / $63,435 / $404,046
Growth from 2008 / 0.9% / 1.0%
Same Store Sales Increase / -2.5% / -0.8%
Sales per Store (mm) / $36.4 / $48.0
Sales per Square Foot (thousands) / $274 / $424
Retrieved from: http://www.wikinvest.com/stock/Target_(TGT)

Total market $ 832334.76

Wal-Mart =47%

Target Corp.7.62

7.62/ 47= 16.21 %

Market-Share

Target growth versus industry and credit card sector

(Limitations due to aforementioned factors including lack of data.)

Note: Industry over Target is 4:3

Corporate Culture Revisions

Although the Target Corporation’s corporate culture has served it well, as have its mission and values, Target Corporation lacks many essential cultural qualities and characteristics. While it cultivates diversity, its growth patterns, its store remodels and the like have more accurately mirrored cookie-cutter retailer presentations. Growth has yielded many benefits including but not limited to more geographical locations and a bigger market share than previously realized, but the new redesign lacks the spirit of diversity, the big quality low price feel and most especially innovation and/or cultural appeal. These deficiencies speak tomes in terms of corporate culture and/or its stagnant nature.

Understandably, more professional people have been recruited through Target Corporation including but not limited to strategists, food scientists, pharmacists, and MBAs, but Target has really failed to include diversity at its most primary and fundamental corporate cultural level. Moreover, it has delimited creativity and innovation through its focus on team culture. For these reasons, diversity, innovation and strategies not only engaging the diverse work force Target currently employs but the one traditionally beyond its interest might serve it well.

Moreover, its corporate culture should include more community involvement. This should not solely be correlative to its giving program but also to its stake in the community and vice versa. Not only would this help Target Corporations Stores become a neighborhood one-stop shop but also more importantly part of the local culture and community.

Describe the core values you would use to create the desired culture in your organization. Evaluate your organization’s current structure and, if needed, recommend changes to the structure, processes, or rewards.

References

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http://query.nytimes.com/gst/fullpage.html?res=9402E3D61E39F936A25757C0A9669D8B63&ref=target_corporation

(2010 Aug. 18). Virtual Target previews this fall. The New York Times. Retrieved from

http://www.nytimes.com/2010/08/19/fashion/19tucker.html?_r=1&ref=target_corporation

Clifford, S. (2010 July 4). Retailers devise novel ways to revise sales. The New York Times. Retrieved

from http://www.nytimes.com/2010/07/05/business/05loan.html?pagewanted

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Kaminer, A. (2010 July 30). One-stop shopping at Manhattan’s first Target. The New York Times.

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target_corporation/index.html

Newswire (2010 Nov. 23). Simply walk in and win-shopkick is your true love with ’12 days of kickmas’

sweepstakes. The New York Times. Retrieved from

http://markets.on.nytimes.com/research/stocks/news/press_release.asp?docTag=201011230900PR_NEWS_USPRX____SF06698&feedID=600&press_symbol=267875

Newswire (2010 Nov. 16). Target releases free holiday soundtrack. The New York Times. Retrieved from

http://markets.on.nytimes.com/research/stocks/news/press_release.asp?docTag=201011160900PR_NEWS_USPRX____NY02193&feedID=600&press_symbol=267875

Newswire. (2010 Nov 17). Target announces third quarter earnings. The New York Times. Retrieved

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MSN. (2010). Target. Retrieved from http://moneycentral.msn.com/detail/stock_quote?Symbol=tgt

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Target Commercial Interiors. (2010). Home Page. Retrieved from http://targetcommercialinteriors.com/

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phoenix.zhtml?c=65828&p=irol-homeProfile

(2010). Seasonal. Retrieved from http://pressroom.target.com/pr/news/

target-announces-new-online-holiday.aspx

(2010). Remodel program. Retrieved from http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDc1NzZ8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

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Target India. (2010). Home page. Retrieved from http://india.target.com/site/en/corporate/

page.jsp?contentId=PRD03-004534

Wikinvest. (2010) Stock: Target. Retrieved from http://www.wikinvest.com/stock/Target_(TGT)