217353875 Case Study 20 Target Corporation

NPV analysis uses future cash flows to estimate the value that a project could add to a firm’s shareholders. A company director or shareholders can be clearly provided the present value of a long-term project by this approach. By estimating a project’s NPV, we can see whether the project is profitable. Despite NPV analysis is only based on financial aspects and it ignore non-financial information such as brand loyalty, brand goodwill and other intangible assets, NPV analysis is still the most popular way evaluate a project by companies.

Target total Revenue in the last five years has been increasing. We can see that in 2010 their total revenue was $65,785 millions, and in 2014 the total revenue was $72,618 millions. Therefore, we can conclude that Target has an increase of $6,833 thousand in their total revenue. Consequently 2014, is Target best year in the overall revenue.

The first project proposal is Match My Doll Clothing line expansion consisted of expanding matching doll and child’s clothing and accessories. The second project proposal is Design Your Own Doll by creating customizable “one of a kind” doll features through the company’s website. The project selection criteria would base on quantitative and qualitative analysis. The quantitative analysis would base on the evaluation of discounting cash flow forecasts to determining the Net Present Value (NPV), Internal Rate of Return (IRR), and the Payback period of each proposed project. The qualitative analysis would include the potential project value of the company’s overall strategy, innovation, key project risks, and the project interdependencies to the whole company.

Target Corporation uses energy conserving Windows, low wattage bulb fixtures, motion sensors and refrigerator that earns energy stars as well as saves energy cost through these initiatives (Target Sustainability, 2015). Target Corporation energy efficient sustainable building is a commitment to support community and environment using solar energy. Solar energy generation eases the burden of the local power supply company. The more Target Corporation leads with an environmentally sustainable initiative, the Target Corporation brand name becomes popular and more people aware of the brand within the community (CSR, 2014). Target Corporation focus on the growth also based on the customer convenience by building urban stores near mass transit saving an enormous amount of transportation cost and lowering carbon footprint. These urban stores bring more traffic and more sales outperforming the competitors in the same area.

Star Appliance is looking to expand their product line and is considering three different projects: dishwashers, garbage disposals, and trash compactors. We want to determine which project would be worth doing by determining if they will add value to Star. Thus, the project(s) that will add the most value to Star Appliance will be worth pursuing. The current hurdle rate of 10% should be re-evaluated by finding the weighted average cost of capital (WACC). Then by forecasting the cash flows of each project and discounting them by the WACC to find the net present value, or by solving for the internal rate of return, we should be able to see which projects Star should undertake.

Target handled the data breach appropriately by investing in the chip-and-pin credit and debit card to have a more secure system. For example, under frequently asked questions Target states, “Requiring a PIN offers an additional layer of security to help protect against someone using your card if it’s lost or stolen. Using a PIN instead of a signature for transactions add an extra layer of protection for our guests against fraudulent purchases,” (Target 2016). According to Coombs, during a crisis, the company should make public safety number one priority (Coombs 2007). Target reissues all of their debit and credit cards with the chip and pin to make them more secure (Ewoldt, 2015). By investing millions of dollars in the chip and pin technology,

The town of Pulaski plans to build a new facility that will benefit young people in the area. There are many things that can be built. But the things that should be build are a sports emporium, a turf football/soccer stadium, and a new workout facility. The first idea for the facility is a new sports emporium. Because people who want to play sports in the winter, have to drive all the way to De Pere. De Pere has the closest sports emporium to us. Or if someone is having a birthday party there everyone has to drive all the way out there. With one in Pulaski you don't have to drive all the way to De Pere. The next idea for the new facility is a turf soccer/football stadium. We should get a stadium so that we don't have to regrow the

As the November Meeting approaches, CFO Doug Scovanner is faced with the problem of choosing which of the five controversial projects available to accept. Our task is to assume this role and evaluate each of the projects based upon two major criteria. The first is determining the firm’s financial motives by quantifying the projected value added to the firm and the risk associated with each project. When determining to accept or reject projects based upon adding value, the most helpful instruments we have are Net Present Value (NPV) and the

1. Through what channel(s) is your product item sold? Explain your answer. My product item is sold through only one channel, a direct channel.

In between the months of November and December of 2013, the store Target and many of its customers had suffered due to a data breach. Apparently, Target tried to fix the problem before it hit the news, by reporting the breach to the Department of Justice who hired a forensic investigator. But, due to the size of the breach and the amount of people affected, Target failed to cover up the incident.

According to the case “Target is Trying to Overcome the Problem of Show-rooming”, Target is faced with developing a solution that decreases the odds of offering products in its stores that consumers can evaluate and then purchase from online competitors (Kinicki & Williams, 2013, p. 34). Target generally compromises with its suppliers to continue as a competitive force in the discount chain industry; however, Target’s traditional compromising will have to be altered to ethically compete with online retailers, such as Amazon, that have devised plans for generating profit from losses. Although Target is second in its industry, consumers’ preferences will have to be considered as the driving factor to the solution, rather than Target’s position.

After the Target breach affected millions of customers, Trend Micro released an article in October of 2014 regarding of a 2014 survey conducted by Creditcards.com on how data breaches affected brand reputation with consumers. The survey was rather informative on how consumers felt about making purchases again from a retailer with a prior data breach. The article revealed that customers still felt an impact of the breach in the 2014 holiday season, in that approximately half of those surveyed stated they would not be shopping at Target during the 2014 holiday season (Trend Micro, 2014). The survey data revealed that only 1 in 8 of the consumers stated how they would be using a credit card for holiday shopping due to fears about possible card

There are different types of benefits that must be considered, both tangible and intangible. The primary difference between the two is that tangible benefits can be assigned a monetary value, whereas intangible benefits cannot be as easily measured. Tangible benefits include increased productivity, lower operational costs, lower computer expenses, and increased sales. Intangible benefits include higher customer satisfaction, a better corporate image, and increased employee morale. Benefits that exceed costs should then be analyzed more thoroughly to determine if they provide benefits in the long term. Often it is necessary to perform additional financial analysis to determine the net benefit of the project. This more in-depth financial analysis includes capital budgeting methods, such as net present value , internal rate of return (IRR), and the return on investment (ROI). After determining the overall direction of a systems development, it is prudent to perform a portfolio analysis to evaluate possible alternative systems projects. A portfolio analysis examines the entirety of the company’s current resources. The portfolio analysis will help organizations assign risks and benefits to the organization. Projects with the highest opportunity for benefit should be considered first, just as proposals that low-benefit and high–risk should be avoided. (Laudon & Laudon, 2008).

After analyzing and documenting economical forecast models and profitability trends with various properties pending future renovations, the firm has chosen to proceed with the redevelopment of P-Man Mall. The company chose this project because it will provide the surrounding community of Coolsberg, Maryland with an economical enhancement for families and businesses. The overhead costs for this project will be subsidized by the tax increment reimbursements provided by the city to provide incentivized returns on the sustainable upgrades proposed in the project planning. The project is anticipated to provide a profitable return on the existing investment and future business needs.

The financial concepts most relevant to strategic planning are those dealing with firms' capital investment decisions. To select the projects to be financed, we calculate