Walmart Vs Costco Case Study

Decent Essays
Target had many competitors but the top two competitors that were a thret to target was Walmart and Costco. Costco tried to attract the same customers as target does but Costco used a membership fee. So that maid one big difference between both of them. Walmart is very similar to target and operate similar too but Walmart is the dominate company in the industry and operate around the world. Target had a capital expenditure approval process and they are made from a team of top executives that meet and review requests that are over $100,000. This time there getting together and discus 5 projects that represented almost 200 million in proposed capital investments. They know that any decision they made can impact the short term and long term profitability…show more content…
A bad thing about the project is that median income is $38,200 the lowest of all 5 projects and the population is pretty low as well. Goldie’s square is another investment project that had a high population increase of 16% and has the second highest population of 222,000. Target has currently 12 stores in the area and expected to have 24 eventually. They also have a Walmart to compete with. They have a low NPV of $300 which is really low compared to the other 5 projects and it also has an IRR of 8.1% and it is also the lowest of all the 5 projects. The last project is a stadium remodel and the benefits of it is that target already owns the property and it is just upgrading it and the reason that they are upgrading it is because they believe that store has a strong long term location. The investment is the second lowest and the median income is really high in the area of $65,931 which is the highest of all 5 projects. The area had supported target stores since 1972 but their sales are decreasing and an upgrade will give a boost in the sales. The bad thing is that the IRR is the 3rd lowest of the 5 projects with a 10.8% and the NPV is the second lowest of all the 5
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