Target Industry Outlook

“Target Corporation’s efficient marketing, multi-channel strategy, product innovation, compelling pricing strategy and new merchandise assortments, should help drive comparable-store sales and operating margins in the long term. We expect the company to gain market share, and believe that more focus on consumable items should boost sales and earnings in a sluggish consumer environment. (Zacks 1)” Zacks’ investment research analysis of the Target stock going forward indicates that Target focusing on consumable items, such as the food section in a Super-Target, could help benefit Target financially.

This paper discusses the company history of Target, evaluates Target’s internal strengths and weaknesses, and discusses external opportunities and threats. Additionally, the authors examine how the company functions to provide product to customers, and also elaborates on how the company interacts with their customers. Lastly, the authors evaluate the needs that Target serves its customers and assesses the criticality of the products provided.

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

As mentioned above, Target competes in the retail sector, which makes the operating risks of

The financial analysis below will look at Target Corp’s financial health as a company as well as make recommendations to improve the outlook and succeed in the near future.

Target Corporation is the 6th largest American retailer and mass merchandiser offering every day essentials, fashionable merchandise, and supermarket necessities at discounted prices. As the company is one of the largest retail industry leaders it faces many industry trends such as competition, economics, and community and government requirements. Within Target locations, they provide licensed departments such as Target Optical, Pizza Hut, Portrait Studio, and the major license of Starbucks. Dayton was not the only realizing the opportunity for growth in the discount retail industry, in that same year, Target’s biggest competitor, Sam Walton found Walmart. This right away creates the vision of Targets growth path. Target expanded from the Midwest. Opening in urban markets, Target placed itself as an upscale discounter offering a wider selection of higher quality designer products and as well as a better shopping experience. In 1995, Target enters the grocery business launching the first Super Target location (Yue, Qingyuan, Rao, and Ingram). The idea of Super Target was modeled after the Walmart supercenters with a slightly different aspect of actual locations providing grocery products. By 2002, Target jumped to the second largest discount retail in the

Strategically set into motion, Target has evolved from an in-store experience and enhanced their business model into be a multi-omnichannel, customer focused retailer. In questioning Target’s overall sales for 2016, the company documented that the decrease in the sales is a reflection from a decrease of roughly $3,815 million due to the Pharmacy Transaction.

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 Corporation is having a very stable financial policy and dividend policy. From the historical financial data, Target had debt $11,044M, $11,202M, $10,599M, $17,471M, and $19,882M in the year of 2005,2006,2007,2008, and 2009 respectively. The long-term debt/equity ratio rises from 69.34% to 108%.

Target Corporation has some new imminent threats on its horizon. Its challenge continues to be the problem of competing with Wal-Mart, Costco, and other huger retailers that are front runners. In order to decrease the risk posed to revenues by internal rivalry in the discount retailing industry. The key issues: growth and differentiation.

Target focuses on store innovation. It designs its stores to build a comfortable and a clean atmosphere to ease shopping operations. The company provides quality products and best services to improve the customer’s business experience, increase sales, and attract potential customers. “Target has succeeded through a differentiation-based strategy in adding elements to the mix other than just price,” Storch said. “There are still customers who will not walk into a Wal-Mart. They find it too disgusting, too dirty, too downscale. ”Target uses new sources to buy their product, which help the business to grow and assure the customers’ demand. For customers’ convenience, the company opened new stores all over the country, especially in the crowded tristate area, to market their brand and generate more sales. Also, Target tries to expand their businesses in the global market by opening smaller stores called “City Target.” These stores are similar to their competitors such as, Wal-Mart,

With the economic downturn, Target re-prioritise their offerings. They make a move by adding the perishables to its inventory and cut back on discretionary items such as clothing and home accessories. Target marketing message remains focused on offering high styles but introduce phrase such as ‘fresh for less’ and ‘new way to save’. These seem to have back fire on Target as it seems like a ‘me-too’ strategy. Target have placed themselves in the same strategies of Wal-mart, well known for low price, cheap and low quality

Company Profile Target Corporation was founded in 1902 and is headquartered in Minneapolis, Minnesota. Target Corporation operates general merchandise and food discount stores in the United States. It operates as two reportable segments: Retail and Credit Card. The company offers household essentials, including electronics, music, and toys; apparel and accessories; home furnishings as well as seasonal merchandise. It also sells its merchandise under private-label brands, such as Archer Farms, etc. Target Corporation operates in-store amenities, such as Target Caféand Target Clinic as well. Its marketing strategy includes selling its products on its online shopping site Target.com and its network of

The Target Corporation is a general merchandise retailer that opened up in in 1962 under the parent company of Dayton Corporation. This parent company was renamed the Target Corporation in 2000 and are based out of Minneapolis. There are over 1,800 Target stores throughout the United States which includes Targets and Super Targets. In 2005 Target began expansion in India and in 2011 to Canada however this expansion into Canada did not fare well and all Target Canada stores were closed by 2015. According to Forbes in 2005 they we ranked amongst the highest cash-giving companies in America with 2.1% given and they donate about 5% of its pre-tax operating profit. In 2010 Target was ranked number 22 by Fortune magazine’s World's Most Admired Companies.

Wal-Mart’s is one of Target’s biggest competitors, but other retailers are also trying to compete, such as Sears, Dollar General, and Amazon. Although Target caters more to a more upscale clientele, it still carriers many of the same items as Wal-Mart. Target is not able to compete internationally with Wal-Mart since all of stores are in the U.S. but by 2014, they will have about 150 stores