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Target Corporation

Target Corporation. By: Leigh Blackmon, Justin Napier, Sara Ratliff, and Brian Roundtree. Executive Summary. The Firm Upscale discount chain that offers trendy merchandise at affordable prices The Industry Dominant Firms – Wal-Mart, Costco, K-Mart

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Target Corporation

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  1. Target Corporation By: Leigh Blackmon, Justin Napier, Sara Ratliff, and Brian Roundtree

  2. Executive Summary • The Firm • Upscale discount chain that offers trendy merchandise at affordable prices • The Industry • Dominant Firms – Wal-Mart, Costco, K-Mart • Keys to Success- Marketing, Promotion, Brand Loyalty, Differentiation

  3. Mission Statement • At Target, our mission is to create a loyal customer base by selling a trendy, yet affordable range of merchandise. We are also interested in being socially responsible and do not define the success of our company simply by the bottom line. 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 our corporation to ensure customer satisfaction.

  4. External Environment • Economic • Customer’s amount of disposable income • Customer’s propensity to spend • Social • Age of customers • Beliefs of customers • Technological • Technological forecasting • Giving customers the ability to shop from the comfort of their own home

  5. Ranking of Porter’s Five Forces Present- 1) Substitutes 2) Rivalry 3) Powerful Buyers 4) Powerful Suppliers 5) Threat of Entry 1= Most Important, 5= Least Important

  6. Suppliers Buyers • No similar companies • Ex. 1-Including purchase volume • Ex. 2-Including differentiation of inputs • Wal-Mart, K-Mart, and Costco • Need more product differentiation • Increase buyer volume • Establish brand identity • Providing quality and performance in each store

  7. Threat of Entry • Difficult to establish large companies • Hard to imitate brand identity • Large capital requirements

  8. Rivalry Substitutes • None- Due to quality and fashion • Results in customer loyalty • Results in brand identity • Wal-Mart • K-Mart • Costco • Differentiation is key factor= Fashion • Push Target’s brand identity

  9. Company Profile • Primary Activities • Customer Service • Marketing and Sales • Advertising, promotions, market research, planning • Operations • Production and Quality Assurance

  10. Company Profile • Secondary Activities • Human Resources • Recruitment, hiring, training, and development • Technology • Conduct research • New trends and interests

  11. Company Profile • Strengths • Loyal customer base • Readily available products • Constantly produces new ideas and exclusive products

  12. Company Profile • Weaknesses • Higher prices than Wal-Mart • Population response to the economy • Not a global retailer • Other companies, such as Wal-Mart, are gaining a competitive advantage • Not all stores are SuperTargets • Customers want a one-stop store

  13. Financial Analysis - Revenue • Target • 2001: $32.5 billion 2005: $51.2 billion • Costco • 2001: $34.1 billion 2005: $51.8 billion • Wal-Mart • 2001: $180.7 billion 2005: $285.2 billion

  14. Revenue

  15. 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

  16. Net Income

  17. Profitability

  18. Asset Turnover

  19. Firm’s Position / Core Issue • Core Issue • Competition with Wal-Mart • Target has one-fifth the sales of Wal-Mart • Firm’s Position • Based on more than just pricing • Strive to encompass style, quality, and trend

  20. Long Term Objectives • Increasing Market Share • Achievable and Measurable • Scenarios • Best Case: Wal-Mart going out of business and Target having a significant share of market • Worst Case: Target going out of business • Most Likely: Wal-Mart maintains market share and Target’s profit margin, sales, and net income will continually increase

  21. Corporate Level Strategy • Growth • International Expansion • Create more competitive advantage • Increase market share

  22. Business Level Strategy • Strategic Business Unit • Target Food Centers, Target Pharmacy, Target Retail Merchandise • Generic Strategies • Differentiation • Focus • Grand Strategies • Innovation • Product Development

  23. Strategic Choice • Differentiation • Higher quality, more trendy clothing, better style • Drive-through Pharmacies • Expansion into SuperTargets

  24. Any Questions?

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