In my personal opinion, Target should continue to develop a specific portfolio that is specifically targeted to its customer’s needs and likes, while focusing on maintaining the same product quality and variety for each store brand. Through its marketing strategy, the retailer has to assure the consumer they are purchasing the same quality product as if they were buying a national brand at a more affordable price; which at the end is more convenient for the consumer and does not have to sacrifice quality. Target should also expand to the South and Northeast where there are still plenty of attractive locations with no Target presence. This will attract more customers and consequently strengthen its store brands.
Target Canada is the company’s first international expansion. However, Target’s expansion was not successful, as the company had initially planned for. Therefore, the company will be closing 133 Target Canada stores across the country and lay off approximately 17,600 employees. According to Target’s CEO Brian Cornell, he stated “After a thorough review of our Canadian performance and careful consideration of the implications of all options, we were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021.” Moreover, problems occurred immediately when Target opened up over hundred stores in the first year of its Canadian Expansion. For example, customers complained about the lack of basic goods, prices being too high, and the unavailability of U.S. brands in the stores. It was the start of Target accumulating losses as high as a billion dollars a year. In addition, there was also increasing competition with Wal-Mart being the biggest retailer in Canada. The already intimidating rival lowered its prices in order to fend off Target. Furthermore, Target Corporation’s cash costs to discontinue Canadian operations are expected to be $500 million to $600 million, most of which will occur in the Company’s 2015 fiscal year or later. The Company has sufficient resources to fund these expected costs, including cash on hand and ongoing cash generation by
After the recession, Target’s value proposition shifted to simply offer affordable options in a wide array of product areas. However, now with better economic conditions and without the ability to offer lower prices than its affordable retail competitors, such as Walmart, and in order to stay relevant and refresh the company, Target needs to reposition itself as the high-quality concept and style-oriented retail store it was once known for.
In today’s world, especially in Canada, consumers generally want to satisfy all of their needs in a way that saves them the most time and energy. In order to meet this need, Target offers their customers the chance to buy different products that they would normally have to go to two or three different stores
The competition between the wholesale club industry is pretty strong but is mostly dominated by the three main competitors which are: Costco, Sam’s club and BJ’s Wholesale club. These three wholesale clubs for the most part dominate the industry and take away customers from other retail stores because they can offer much lower prices, brand name items and a wide variety of items to purchase from them. When it comes to shares of warehouse sales, Costco had roughly 56 percent of sales, Sam’s club had 36 percent and BJ’s wholesale had a low 8 percent. Unlike most retail stores, these three display all of their items on pallets or their inexpensive shelving which provides them with low cost on décor, labor and advertising.
So when Target sent the letters to the vendors demanding they give them the exclusive rights to the products was unethical by asking vendor only to cater to their needs. This action forced many vendors to look at how they could support Target but be ethical themselves to other customers of the products they were supplying to Target and other customers. So reviewing this behavior by Utilitarianism, Target was not making everyone happy including their vendors nor the customers that may have been purchasing directly
With the down turn in the economy, many consumers have turned to Dollar General and Dollar stores; this has caused a decrease in Target’s revenue. Another threat is Wal-Mart and their ability to offer lower prices on their products compared to Target which makes them the low cost leader. (ehow.com)
Thus, Target operations thought that opening over 100 stores all over Canada would be a great opportunity for the company to expand its profitability. However, the exact opposite happened. Instead of reaching their profitability goal, there is an estimated loss between $800-$900 million, since the opening of stores in Canada (Austin, 2014). The cause of this failure was due to a lack of inventory in most stores; leading to empty shelves and many of the favorable brands from U.S. Target’s did not make it to the stores in Canada. Another problem was that prices were higher in Canadian stores compared to U.S. store prices due to shipping costs and tax (Austin, 2014). Target failed to think this whole process through before acting on it. Starting with the 124 stores who all had to be remodeled and up and running in less than a year due to Canada’s policy of not letting any store stay vacant for any longer than that; to having the ability to furnish and fill the stores with all of their merchandise (Nolan, 2014). Soon they came to realize they could not. Target’s lack of looking into the higher prices they would have been paying making it able to get the merchandise over the border into Canada, was another issue leading to the company’s ineffective plans. Having noticed early on that the extra costs of tax will lead to a price mark up on in store products,
Target is basically asking its vendors to do for them what they are not doing for others. Target is trying to cut corners, labor, and sweat by placing the work on the vendors. I see this being a good thing or a bad thing for the vendors. This could be good for vendors because it will bring in more revenue for them. It will also motivate competitors to demand special products as well.
The case indicates that Target vendors will have little choice but to "play ball" and create special products to shield Target from price comparisons. The ethical implications of this pressure Target is placing on its vendors and the possible fallout shows a conflict of interest. Target is the second highest brick and mortar discount chain. What vendor that is already in good standings with Target can afford to say no to them? Almost 100% of them cannot. When you have to set your manufacturing up for the demand that they have, you often have to drop some of the “little people” or go up on your prices to them. This is just a risk that high-volume manufacturing companies sometimes have to take.
Inditex ensures that its fashion is fast through its supply chain efforts. They have created new methods to enable store managers to order and display merchandise faster and added cargo routes for shipping goods. The company ships clothing straight from the factory to stores and makes two-thirds of its goods in Spain and nearby countries, compared to most competitors who manufacture most of their clothing in Asia. Inditex has their sales managers monitoring computers, which are reporting sales at every store around the world. When a garment does well or fails, they are able to quickly tell designers if they need to come up with new ideas. They also have generated
We have grown into a world filled with a tremendous amounts of technology. The rapid growth in technology has made brick and mortar markets either start to wither away or it has forced companies to develop their own e-commerce branch of their company to help them stay in the race with the advancement in technology. An example that stands out to me is the well-known retail store Target. Target has not only created a way for their customers to buy products on line, but they have also developed an application for their frequent shoppers, a debit card for Target lovers that want to save 5% instantly, and recently an online service to order products for pick up in-store. Before explaining all the e-commerce innovations that Target has launched throughout the recent years, I believe a brief history of Target is necessary.
Target knows their customers want merchandise on the shelves. Target is always working on sourcing and adjusting their supply chain to make sure production, quality, capacity, pricing, and
The ethical implications that Target is imposing on its vendors are that they are being forced to provide Target with a specialized line. On one hand, this may seem to almost appear to be a form of bullying; the large superstore putting pressure on its vendors to comply with their demands. If it were perceived to be this way it could negatively affect Target. The vendors could decide that they did not want to meet the terms of Targets request and Target could go from the second largest discount chain to no store at all. Without a product to sell then Target would not have a need for a store.