7/28/2019 Target 11.00 Section

1/24

Target Corporation

By: Leigh Blackmon, JustinNapier, Sara Ratliff, and Brian

Roundtree

7/28/2019 Target 11.00 Section

2/24

Executive Summary

The Firm

Upscale discount chain that offers trendymerchandise at affordable prices

The Industry

Dominant Firms Wal-Mart, Costco, K-Mart

Keys to Success- Marketing, Promotion, Brand

Loyalty, Differentiation

7/28/2019 Target 11.00 Section

3/24

Mission Statement

At Target, our mission is to create a loyalcustomer base by selling a trendy, yet affordablerange of merchandise. We are also interested in

being socially responsible and do not define thesuccess of our company simply by the bottomline. We are committed to the social, economic,and environmental welfare of all communities.

Finally, it is our mission to encompass quality,style, and trend into all aspects of ourcorporation to ensure customer satisfaction.

7/28/2019 Target 11.00 Section

4/24

External Environment

EconomicCustomers amount of disposable income

Customers propensity to spend

SocialAge of customers

Beliefs of customers

TechnologicalTechnological forecastingGiving customers the ability to shop from the comfort of

their own home

7/28/2019 Target 11.00 Section

5/24

Ranking of Porters Five Forces

Present-

1) Substitutes

2) Rivalry3) Powerful Buyers

4) Powerful Suppliers

5) Threat of Entry

1= Most Important, 5= Least Important

7/28/2019 Target 11.00 Section

6/24

Suppliers

No similar companies

Ex. 1-Includingpurchase volume

Ex. 2-Includingdifferentiation ofinputs

Wal-Mart, K-Mart, andCostco

Need more product

differentiation Increase buyer

volume

Establish brandidentity

Providing quality andperformance in each

store

Buyers

7/28/2019 Target 11.00 Section

7/24

Threat of Entry

Difficult to establish large companies

Hard to imitate brand identity

Large capital requirements

7/28/2019 Target 11.00 Section

8/24

Substitutes

None- Due to qualityand fashion

Results in customer

loyaltyResults in brand

identity

Wal-Mart

K-Mart

Costco

Differentiation is keyfactor= Fashion

Push Targets brand

identity

Rivalry

7/28/2019 Target 11.00 Section

9/24

Company Profile

Primary Activities

Customer Service

Marketing and Sales

Advertising, promotions, market research, planning

Operations

Production and Quality Assurance

7/28/2019 Target 11.00 Section

10/24

Company Profile

Secondary Activities

Human Resources

Recruitment, hiring, training, and development

TechnologyConduct research

New trends and interests

7/28/2019 Target 11.00 Section

11/24

Company Profile

Strengths

Loyal customer base

Readily available products

Constantly produces new ideas and exclusiveproducts

7/28/2019 Target 11.00 Section

12/24

Company Profile

Weaknesses

Higher prices than Wal-Mart

Population response to the economy

Not a global retailerOther companies, such as Wal-Mart, are gaining a

competitive advantage

Not all stores are SuperTargets

Customers want a one-stop store

7/28/2019 Target 11.00 Section

13/24

Financial Analysis - Revenue

Target

2001: $32.5 billion 2005: $51.2 billion

Costco2001: $34.1 billion 2005: $51.8 billion

Wal-Mart

2001: $180.7 billion 2005: $285.2billion

7/28/2019 Target 11.00 Section

14/24

Revenue

Revenue

$0 $50 $100 $150 $200 $250 $300

2001

2002

2003

2004

2005

Year

Amount (in billions)

Wal-mart

Costco

Target

7/28/2019 Target 11.00 Section

15/24

Financial Analysis Net Income

Target

2001: $1.1 billion 2005: $2.4 billion

Costco

2001: $0.6 billion 2005: $1.06 billion

Wal-Mart

2001: $6.2 billion 2005: $10.2 billion

7/28/2019 Target 11.00 Section

16/24

Net Income

Net Income

$0 $2 $4 $6 $8 $10 $12

2001

2002

2003

2004

2005

Year

Amount (in billions)

Wal-mart

Costco

Target

7/28/2019 Target 11.00 Section

17/24

Profitability

0%1%

1%

2%

2%

3%3%

4%

4%

5%

5%

2001 2002 2003 2004 2005

Year

ProfitMar

gin

TargetCostco

Wal-mart

7/28/2019 Target 11.00 Section

18/24

Asset Turnover

01

2

3

4

5

6

7

8

9

2001 2002 2003 2004 2005

Year

Turnove

r

TargetCostco

Wal-Mart

7/28/2019 Target 11.00 Section

19/24

Firms Position / Core Issue

Core Issue

Competition with Wal-Mart

Target has one-fifth the sales of Wal-Mart

Firms Position

Based on more than just pricing

Strive to encompass style, quality, and trend

7/28/2019 Target 11.00 Section

20/24

Long Term Objectives

Increasing Market Share

Achievable and Measurable

Scenarios

Best Case: Wal-Mart going out of business andTarget having a significant share of market

Worst Case: Target going out of business

Most Likely: Wal-Mart maintains market shareand Targets profit margin, sales, and net

income will continually increase

7/28/2019 Target 11.00 Section

21/24

Corporate Level Strategy

Growth

International Expansion

Create more competitive advantage

Increase market share

7/28/2019 Target 11.00 Section

22/24

Business Level Strategy

Strategic Business Unit

Target Food Centers, Target Pharmacy, TargetRetail Merchandise

Generic StrategiesDifferentiation

Focus

Grand Strategies

Innovation

Product Development

7/28/2019 Target 11.00 Section

23/24

Strategic Choice

Differentiation

Higher quality, more trendy clothing, better style

Drive-through Pharmacies

Expansion into SuperTargets

7/28/2019 Target 11.00 Section

24/24

Any Questions?