Target Case CompetitionKATIE HOLDEN, ALLIE HUNSBERGER, RYAN REVIA, AND TIEN TRAN

Pre-SWOT Analysis Strengths• High quality of service • Price matching • Target REDcard• Logo recognition • Reliable workforce

Weaknesses• Closing of Canada stores • Limited locations• Higher priced items than competitors • Data breach

Opportunities • International markets • Expand grocery department • Increase number of CityTarget and TargetExpress

locations• Further development of Target mobile

applications

Threats • Cheaper competitors • US economy • Increased development of multichannel retailing

by competitors

Opportunities 1. Further development of Target mobile applications

2. Expand grocery department

3. Increase number of CityTarget and TargetExpress locations

4. International markets

Acquisition•Acquire the mobile application and website Grocery iQ, owned by Coupons.com

•Features: o Create grocery lists o Organize items by isle o View weekly ad o Print, view, and share coupons o Add loyalty card o Save favorite purchases

The Future •Integration of current programs: o Cartwheel o REDPerkso Location finder of nearest Target

•Develop to incorporate: o Nutritional information o Pre-order for delivery or in-store pickup

Corporate Culture Implications•Target believes in oLeading today’s competitive retail marketoChallenging themselves to be more efficient and intelligent oProviding guests with the best shopping experience oThe innovation of new ideas and solutions

Customer Implications•Target becomes the lone provider of Grocery iQ features

•Enhancement of the Target experience o Expect More. Pay Less. brand promise o Coupons, information, and service all in one place o Added convenience o New technologies

•Differentiation from the traditional shopping experience o Pre-order for pickup/delivery o Addition of nutritional information

Against the competitionAbilities through their Mobile Application

Target Walmart Amazon

Coupons Yes Yes No

Pre-order for Pick up/Delivery

Yes Beta Testing Pick Up Delivery Only

Integrated Loyalty Programs

Yes No No

List Creation Yes Yes No

Tracks Purchased Items Yes Yes Yes

Nutritional Information for Food

Yes Yes No

New Implementations •New employees dedicated to pre-packaging pickup/delivery orders o Training employees to use the ordering program

•Creation of an in-store pick up counter as well as pick up drive thru

•Delivery teams at each Target

•New equipment

•Added inventory

Summary Financials•Grocery iQ is valued at about $206.6M USD*

•Relevant costs have averaged $22.8M from 2012-2014*

•Revenues from digital promotion have increased 32% (2013-2014) and 49% (2012-2013)*

•Income from digital promotion has increased 17% (2013-2014) and 64% (2012-2013)*

*See Figure 1

Estimates

Benefits of the Acquisition Target

•Most popular shopping list app

•Increase grocery revenue

•Improvement of omnichannel presence

•Customer satisfaction

•Convenience for customers

•Contending with competition

Coupons.com

•Coupons.com had 15 years of operating loss

•Needed Working Capital for acquisitions and product development

•Increased publicity

•Relationship development with Target

Post-SWOT Analysis Strengths• High quality of service • Price matching • Target REDcard• Logo recognition • Reliable workforce • Wide range of mobile applications• Excellent grocery department • Variety of goods and services

Weaknesses• Closing of Canada stores • Limited locations• Higher priced items than competitors • Data breach

Opportunities • International markets • Increase number of CityTarget and TargetExpress

locations• Add pick up and delivery features to applications

Threats • Cheaper competitors • US economy • Increased development of multichannel retailing

by competitors