What Is Target's Reversal

Many discount retailers have come and gone over the years, but Wal-Mart and more recently Target, have employed business models that continually deliver profits, even in the struggling economy of the United states in recent years. Wal-Mart and Target both have expanded rapidly since their inception and while Wal-Mart has become an international retailer with stores in fifteen countries and all over the United States while Target has

“Expect more, pay less” this slogan is known throughout the United States that links amazing service and quality products at a great price from one convenient location, Target. Target has a long history of providing a wide variety of products from fashionable clothing for all members of the family to your everyday essential needs such as toiletries and cleaning supplies. Behind every wildly successful corporation is a strong organizational structure. Target has an extensive organizational structure that helps them provide the amazing products they do at even better prices.

Wal-Mart and Target are both great retail stores to go and find a good bang for your buck shopping experience. After researching both companies, it appears they have the same ideas as a mission, saving the customer money. Wal-Mart Mission statement reads;

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

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.

Target has been a successful retail company coming in 2nd place behind Wal-Mart. Although these success comes in many forms there are factors that deter Target from ever reaching first. Target Corporation has run into a few weaknesses in the recent years. These weaknesses that Target are facing can impact their future goals. These weaknesses include lawsuits that Target is facing with the recent events and not having an international presence.

Ultimately being reflected in its more than $72 billion in annual sales although is one-seventh of Wal-Mart’s size, Target’s number one rival.

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

Target Corporation is known worldwide as a large retail chain that brings in millions of dollars each fiscal year. The ability to remain competitive in a saturated industry could prove difficult to some retailers, but Target remains one of the leaders in the retail market. With success comes risk. Target Corporation competes against online retailers as well as “big box” stores to remain competitive.

Target has been a successful retail company coming in 2nd place behind Wal-Mart. Although these successes come in many forms, there are factors that deter Target from ever reaching first place. Target Corporation has run into a few weaknesses in the recent years. These weaknesses that Target are facing can impact their future goals. They include lawsuits that Target is facing with the recent events and not having an international presence.

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 the fourth quarter alone, Target Corp. said its Canadian segment suffered a US$ 329-million loss before interest and taxes. The retailer generated US$ 623 million of sales in Canada but said it struggled with gross margins of 4.4%, reflected efforts to lower prices to clear excess inventory.” said Linda Nguyen from The Canadian Press. In January of 2014 Target’s Canadian arm released stats from their first year as a multinational brand. The results seemed to shock those who aren’t active shoppers, but many who visited Target locations, found them to be uninhabited with noticeably higher prices than the U.S.. Retail consultant Maureen Atkinson mentions how difficult it is for any retailer to survive in todays market. Retailers are all steadily competing for the consumers dollar, which makes newcomers lives exponentially more difficult. "There have been fundamental issues here (with Target)," said Atkinson, who is with the Toronto-based firm J.C. Williams Group. “They have to do better." Although professionals have justified the potential reasoning behind Target Canada’s lack of success, it does not seem to fully justify something as severe as a US$ 941 million loss. As of March 2014, it was released that

Losses at the company’s new Canadian operation should be reduced in fiscal 2015. Last year, Target opened 124 stores in the Canadian market. Due to start-up expenses, and intensified competition from Wal-Mart Canada and Canadian Tire, Target’s losses there were equivalent to $1.13 a share, and the pretax deficit was $415 million in fiscal 2014’s first half. Due to a very low gross margin of 18.5%, versus 30% for its U.S. stores, and poor leveraging of fixed expenses, the Canadian chain’s operating margin was negative 33.1%. As the new CEO Brian Cornell aiming to restructure the Target Canada operation, Target’s losses in Canadian market should be reduced.

Target may have a bigger selection on some products, but their store is such a big hassle. To have a well managed store you need good customer service, a good atmosphere, and low prices. That’s something Target has none of and Wal-Mart has plenty of.

Based on the company’s 2013 annual report, Target’s fourth quarter reported net earnings of $520 million dollars and revenues of $21.5 billion dollars. Compared to the same period in the previous year, net earnings and total revenues decreased by 46% and 3.8%, respectively. With regards to the second and third quarter of 2013, the fourth quarter is the only quarter which reports a decline in revenue when compared to the same periods in 2012. 2013’s second and third quarter revenues all show an increase in total revenue year-over-year. The only exception is in its 2013 first quarter, which failed to break the prior year’s first quarter earnings of $16.9 billion. The reason for this is due to weak sales in seasonal and