target 11.00 section
TRANSCRIPT
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Target Corporation
By: Leigh Blackmon, JustinNapier, Sara Ratliff, and Brian
Roundtree
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Executive Summary
The Firm
Upscale discount chain that offers trendymerchandise at affordable prices
The Industry
Dominant Firms Wal-Mart, Costco, K-Mart
Keys to Success- Marketing, Promotion, Brand
Loyalty, Differentiation
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Mission Statement
At Target, our mission is to create a loyalcustomer base by selling a trendy, yet affordablerange of merchandise. We are also interested in
being socially responsible and do not define thesuccess of our company simply by the bottomline. We are committed to the social, economic,and environmental welfare of all communities.
Finally, it is our mission to encompass quality,style, and trend into all aspects of ourcorporation to ensure customer satisfaction.
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External Environment
EconomicCustomers amount of disposable income
Customers propensity to spend
SocialAge of customers
Beliefs of customers
TechnologicalTechnological forecastingGiving customers the ability to shop from the comfort of
their own home
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Ranking of Porters Five Forces
Present-
1) Substitutes
2) Rivalry3) Powerful Buyers
4) Powerful Suppliers
5) Threat of Entry
1= Most Important, 5= Least Important
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Suppliers
No similar companies
Ex. 1-Includingpurchase volume
Ex. 2-Includingdifferentiation ofinputs
Wal-Mart, K-Mart, andCostco
Need more product
differentiation Increase buyer
volume
Establish brandidentity
Providing quality andperformance in each
store
Buyers
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Threat of Entry
Difficult to establish large companies
Hard to imitate brand identity
Large capital requirements
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Substitutes
None- Due to qualityand fashion
Results in customer
loyaltyResults in brand
identity
Wal-Mart
K-Mart
Costco
Differentiation is keyfactor= Fashion
Push Targets brand
identity
Rivalry
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Company Profile
Primary Activities
Customer Service
Marketing and Sales
Advertising, promotions, market research, planning
Operations
Production and Quality Assurance
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Company Profile
Secondary Activities
Human Resources
Recruitment, hiring, training, and development
TechnologyConduct research
New trends and interests
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Company Profile
Strengths
Loyal customer base
Readily available products
Constantly produces new ideas and exclusiveproducts
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Company Profile
Weaknesses
Higher prices than Wal-Mart
Population response to the economy
Not a global retailerOther companies, such as Wal-Mart, are gaining a
competitive advantage
Not all stores are SuperTargets
Customers want a one-stop store
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Financial Analysis - Revenue
Target
2001: $32.5 billion 2005: $51.2 billion
Costco2001: $34.1 billion 2005: $51.8 billion
Wal-Mart
2001: $180.7 billion 2005: $285.2billion
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Revenue
Revenue
$0 $50 $100 $150 $200 $250 $300
2001
2002
2003
2004
2005
Year
Amount (in billions)
Wal-mart
Costco
Target
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Financial Analysis Net Income
Target
2001: $1.1 billion 2005: $2.4 billion
Costco
2001: $0.6 billion 2005: $1.06 billion
Wal-Mart
2001: $6.2 billion 2005: $10.2 billion
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Net Income
Net Income
$0 $2 $4 $6 $8 $10 $12
2001
2002
2003
2004
2005
Year
Amount (in billions)
Wal-mart
Costco
Target
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Profitability
0%1%
1%
2%
2%
3%3%
4%
4%
5%
5%
2001 2002 2003 2004 2005
Year
ProfitMar
gin
TargetCostco
Wal-mart
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Asset Turnover
01
2
3
4
5
6
7
8
9
2001 2002 2003 2004 2005
Year
Turnove
r
TargetCostco
Wal-Mart
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Firms Position / Core Issue
Core Issue
Competition with Wal-Mart
Target has one-fifth the sales of Wal-Mart
Firms Position
Based on more than just pricing
Strive to encompass style, quality, and trend
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Long Term Objectives
Increasing Market Share
Achievable and Measurable
Scenarios
Best Case: Wal-Mart going out of business andTarget having a significant share of market
Worst Case: Target going out of business
Most Likely: Wal-Mart maintains market shareand Targets profit margin, sales, and net
income will continually increase
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Corporate Level Strategy
Growth
International Expansion
Create more competitive advantage
Increase market share
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Business Level Strategy
Strategic Business Unit
Target Food Centers, Target Pharmacy, TargetRetail Merchandise
Generic StrategiesDifferentiation
Focus
Grand Strategies
Innovation
Product Development
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Strategic Choice
Differentiation
Higher quality, more trendy clothing, better style
Drive-through Pharmacies
Expansion into SuperTargets
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Any Questions?