Causes Of Target's Growth

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.

Within every organization there are advantages and disadvantages as well as strengthens and weakness. One of the biggest weaknesses of the Target Corporation is that all of their operations are located in the US. The organization would benefit more if they engaged in business with multinational countries. Wal-Mart has more than 11,000 retail stores in 27 multinational countries. If Target is ever going to move out of their second place position behind Wal-Mart there are going to need to expand globally. The Target Corporation is still trying to recover from the embarrassing financial disaster they made when they tried expanding their brand in Canada. Target spent 1.8 billion for 222 locations in Canada. Unfortunately, this merger

Target Corporation is a retail chain specializing in household goods, clothing, food, and accessories at discounted prices. The retail chain’s history started back in 1902 as Goodfellows and in 1910 as The Dayton Company. Initially, the chain specialized in “furnishings, fabrics and decorations for business and other public institutions” (“Target Corporation,” 2016, p. 5). Eventually, Target went public in 1967 and on to acquire Mervyn’s in the 1970s where they became the seventh largest retailer in the United States. Target operates in the United States, where it is headquartered in Minneapolis, Minnesota and as of January 31, 2015 Target employs over 300,000 people. “The company recorded revenues of $72,618 million in the financial year ended January 2015, the operating profit of the company was $4,535 million, [and] the net profit was $2,449 million” (“Target

The purpose of this paper is to discuss Target’s strengths, weaknesses, opportunities and threats. This paper will also talk about how Porter’s Five affects Target’s business decisions.

Over the past three years, Target has been focusing on an expansion strategy. Target’s goal is to expand its branches not only across the United States, but also in Canada. In 2011 they opened around 21 new stores around the U.S. In addition, they built smaller format Target store called City Target in crowded downtown areas such as Chicago, Los Angeles, Seattle, and San Francisco. Target’s initial plan for Canada was to open up to 125 stores, but by August 2014 Target opened about 130 stores in Canada.

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,

The aim of this paper is to highlight the strategic position of the company with an overview of its internal and external environment. The study of its strategy, design and other forces, one can easily gauge why and how target has managed to become the retail giant it is today.

Target Corporation has recognized itself as one of the top retailers in the United States market on the basis of excellent service quality, customer experiences, operational excellence, strong financial position, and a wide array of product offerings. Through its high degree of service orientation at physical outlets and adoption of fair business practices, Target Corporation has become the most distinctive retailer in the eyes of its potential customers. Being one of the top-notch retailers in the United States, Target Corporation has to carefully strategize on its business operations and marketing tactics so as to keep itself in the row of competitive brands of the industry.

Target Corporation (NYSE:TGT) is the leading large-format general merchandise and discount retailer in the U.S., challenging Wal-Mart in electronics, toys and apparel while also seeking to differentiate with higher-end fashions and products for an upscale audience. As of the close of their latest fiscal year (FY2011), Target operated approximately 1,760 stores encompassing 233,000 square feet in 49 states and the District of Columbia. The company is divided into the retail and credit card divisions and moves the majority of its products through a highly integrated network of 37 different distribution centers, which include four food distribution centers. Target is one of the most well-entrenched large format retailers in the U.S., has the ability to manage their pricing strategies at a level of accuracy and precision that is comparable to Wal-Mart (Henderson, 2001). Unlike Wal-Mart, Target concentrates on a value-based message that concentrates on quality and price differentiation to sustain their gross margins while Wal-Mart concentrates on supply chain efficiency and a continual reduction of supplier and transaction costs (Krishnamurthi, 2001).

Target Corp. is a well-known, nation-wide corporation that will soon been expanding internationally. Target’s goal is to provide exceptional quality merchandise and fresh foods for affordable prices. Their “Expect more. Pay less.” slogan goes far beyond just purchasing in store and online. Target provides exceptional service to their customers, whom they call “guests”, and provides benefits such as quarterly dividends to their stockholders. In the fiscal year, 2010, Target opened 13 new stores and of these new stores, 10 were in new locations. It is Target’s goal to create a convenient shopping experience across the U.S. In addition, Target Corp also supports strong corporate governance.

speed at which the company opened their stores up. This didn’t let Canadians grow into the new lifestyle to shop at Target and instead the company collapsed on itself within a year. The second issue is the lack of product availability for customers to purchase. Due to the speed of opening, Target didn’t properly achieve their equilibrium of merchandise to sell and instead left many customers disappointed with the lack of quality service. The third issue is the prices compared to Target’s US stores. There was no foresight into the comparison of quality, price and service which would become evident once they entered the Canadian market. The fact that

Expansion is a risky step for any business to take. International expansion has potential to be devastating to a company; or, it can lead to success on an even grander scale. By placing Target in Mexico, specifically Mexico City to begin with, opportunities are created for both the company and the country to grow. This expansion makes sense for several key reasons. One reason is that Target has yet to expand out of the United States. After a failed attempt at moving into Canada, the company has not tried international expansion since. Wal-Mex is the only retail store in Mexico that offers similar products for similar prices, which leaves space for a store like Target. Wal-Mart and Target have also been known to do well in the same areas. Target

Target Corporation is among the top ten largest retail outlets in the U.S. offering clothing apparel, produce, home décor, and other household goods. The utilization of its infrastructure and information technology systems provides Target with one of its greatest strengths of forecasting consumer needs, which establishes repeat customers and consumer loyalty. “Making Target your preferred shopping destination in all channels by delivering outstanding value, continuous innovation and exceptional experiences” (Target Corporate, n.d.). The firm is supported by a strong IT department, a phenomenal leadership team that develops concrete operational planning, and consist of an organizational structure that is one other firms can model to achieve success. Target’s physical locations existence within a foreign market was short lived when Target ventured into Canada in March 2013. After closing its 124 stores in 2015, the firm is in a better position for a global expansion into Ethiopia, which has become an emerging and back into Canada where it first experienced failure.

Target Inc. is an award-winning retail firm that was established in 1902 as a subsidiary of the Dayton Company in Minneapolis (“Company Background”, n.d.). Upon inception, the company rapidly became the most profitable retail chain in its parent company holdings. This rapid profitability was achieved because Target Inc. differentiated itself from its business rivals through the creation of an upscale discount market niche. The growth of the company in its initial years can be attributed

Target’s brand strategy is working very well. Although their image has changed in a positive manner over the past few years, they have remained true to their image of being an affordable alternative to other department stores. The consumers have, and more than likely will continue to enjoy the collection of items provides in their stores. The strategy has been to provide cheap alternatives, but with the introduction of private brands, Target has been able to bring in a whole different demographic. They have done a good job balancing the affordable to quality ratio. This strategy has provided a solid profit across the Target stores.