Target's Ethical Implications

More often than not, Target’s products fall under the consumer discretionary category. Thus, the company is vulnerable to macroeconomic forces— consumer spending trends, employment and income, and GDP (gross domestic product) growth rate. After a failed attempt to expand into Canada, Target’s operations are limited to the United States market. This makes the company’s financial performance more vulnerable to our fluctuating economy. It is primarily these macro forces, in the recession and thereafter, that forced Target to shift towards an affordability focus in all of its product lines. However, these macro forces, in the betterment of the state of the economy, also provide Target with the opportunity to refresh its product offerings according to the tastes and preferences of its consumers, while continuing to offer a relatively low price point, regardless of the product area. In this way, Target is shifting from employing a production concept, in which its main focus is to sell products at a low production

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

Target CEO Brian Cornell states: “the situation is unacceptable and appointed veteran executive John Mulligan to find a fix” (SCDIgest Editoral Staff). Mulligan,

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

• Target will need to focus on cost cutting in order to reduce their prices that are applied to the products.

Whalen Court was a request for $119.3 million to build a unique single-level store scheduled to open in October 2008. The Prototype NPV could be achieved with sales of 1.9% above the R&P forecast level. The Whalen Court market seemed to be a rare oppurtuinity for Target to enter the urban center of a major metropolitan even though they currently operated 45 stores in this market. The opportunity provided Target with essentially free advertising for all passerby and brand visibility. Unlike the majority of Target stores, this store would have to be leased.

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 Corporation is an American retailing company, founded in 1902 and headquartered in Minneapolis, Minnesota. It is the second-largest discount retailer in the United States. The company is ranked 36th on the Fortune 500 as of 2013. The first Target store was opened in 1962 in Roseville, Minnesota. Today Target operates 1,934 stores in the United States with over 347,000 team members worldwide.

Target, as a whole, is huge corporation/business. As a business, in order to stay open and run functionally, Target has to abide by regulatory and/or industry standards. The two regulatory and industry standards that are required for any financial, retailer, and/or business is Payment Card Industry Data Security Standard (PCI DSS) and Gramm-Leach-Bliley Act (GLBA). PCI DSS is a global industry standard while GLBA is a government regulatory standard. Target has to abide by PCI DSS and GLBA.

Target’s business-level strategy is one that does not strictly focus entirely on one plan to gain a competitive advantage over competition. It encompasses various strategic and meticulous planning and decision making that is implemented in order to position the company at the top of the retail industry. With competition from the likes of Wal-Mart, Sam’s Club, and Costco, Target uses several clever and “out-of-the-box” ideas to attract consumer attention and ultimately increase market share within the industry. Most of the company’s ideas centered more on the differentiation of products and services provided to customers than lowering prices. For quite some time, the company’s plan was to not compete head-to-head with Wal-Mart in terms of lowering prices but instead to provide their customers, who they identify as “guests”, with a special experience every time they visited a Target location. One idea that was implemented was to market and sell upscale, trendy clothing and unique merchandise at discounted prices.1 This strategy, known as the “cheap-chic” strategy, focused on providing good quality clothing from various well known designers and fancy products from high-profile manufacturers for prices lower than their competition. This plan was vital because it began essentially began the concept of customers referring to Target as “Tar-zhay” which according to Patrick Barwise and Sean Meehan, who are university professors, as a “connote its trendy sensibility”. Target

I chose to do my research on the Target Corporation. I feel they have a reputation of service to their customers, employees and community. Target’s mission is great value, the community, diversity and the environment. Target takes 5% of its income and puts back into the community. The Reading and Education Program, The Military and Veteran Support Program and The Social Services Program are just a few of several programs Target Corporation offers to the community. Target has a great reputation to be a positive fixture in the communities they serve. I think it says a lot about a company and the way it does business. I would feel good about working for a corporation like this. The Target Corporation has good ethics and is socially

Politics have an influence on Target in that they influence regulations in the retail industry, which in turn affect the way the company regulates the cost of its products. A political factor such as the healthcare bill will influence the cost of medicine in the market and therefore Target will adjust its prices based on the regulations caused by political influence. On the other hand, the retail industry is influenced by the liberalization of the international trade, which involves the lowering of US tariffs and the availability of low-cost labor. These political factors positively influence the operations of Target corporation (Kahle, 2012).

One of the issues Target could face if it continues to only focus on private label store brands and do not promote national brands is losing a percentage of its customers. Although Target’s innovative amount of store brands on its aisles has proven successfully for the retailer and consumers have shown a positive reception to the products, there are still a number of customers who are accustomed to

Target sells its products from the high end of the market to the low end depending on the type of product in question. In regards to Electronics items where the caption rate is small, they price their items at the high end to ensure they meet their margins. However, in regards to Target’s name brand items, they price those at the low end, keeping the company as a discounted retailer. Target also sells designer items that range from mid to high range of the market. In 2013 Targets CEO Gregg Steinhafel adopted the philosophy “a penny saved is a penny earned”. He further mentioned that they company would be a penny higher in price than their competitors Wal-Mart (Davis, M 2013). Steinhafel stated that “We want to be a penny

Target also deals with the threat of unionization of their employees. Many employees have expressed concern regarding low wages paid by Target. Like Wal-Mart, Target is against unionization because they believe that employee issues should and can be resolved without third party mediation. (gawker.com)