target corporation by: leigh blackmon, justin napier, sara ratliff, and brian roundtree
TRANSCRIPT
Target Corporation
By: Leigh Blackmon, Justin Napier, Sara Ratliff, and Brian
Roundtree
Executive Summary
The FirmUpscale discount chain that offers trendy
merchandise at affordable prices
The IndustryDominant Firms – Wal-Mart, Costco, K-MartKeys to Success- Marketing, Promotion, Brand
Loyalty, Differentiation
Mission Statement
At Target, our mission is to create a loyal customer base by selling a trendy, yet affordable range of merchandise. We are also interested in being socially responsible and do not define the success of our company simply by the bottom line. 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 our corporation to ensure customer satisfaction.
External Environment
EconomicCustomer’s amount of disposable incomeCustomer’s propensity to spend
SocialAge of customersBeliefs of customers
TechnologicalTechnological forecastingGiving customers the ability to shop from the comfort of
their own home
Ranking of Porter’s Five Forces
Present- 1) Substitutes
2) Rivalry
3) Powerful Buyers
4) Powerful Suppliers
5) Threat of Entry
1= Most Important, 5= Least Important
Suppliers
No similar companiesEx. 1-Including
purchase volumeEx. 2-Including
differentiation of inputs
Wal-Mart, K-Mart, and Costco
Need more product differentiation
Increase buyer volume
Establish brand identity
Providing quality and performance in each store
Buyers
Threat of Entry
Difficult to establish large companiesHard to imitate brand identityLarge capital requirements
Substitutes
None- Due to quality and fashion
Results in customer loyalty
Results in brand identity
Wal-MartK-MartCostcoDifferentiation is key
factor= FashionPush Target’s brand
identity
Rivalry
Company Profile
Primary ActivitiesCustomer ServiceMarketing and Sales
Advertising, promotions, market research, planning
OperationsProduction and Quality Assurance
Company Profile
Secondary ActivitiesHuman Resources
Recruitment, hiring, training, and development
TechnologyConduct researchNew trends and interests
Company Profile
StrengthsLoyal customer baseReadily available productsConstantly produces new ideas and exclusive
products
Company Profile
WeaknessesHigher 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 SuperTargetsCustomers want a one-stop store
Financial Analysis - Revenue
Target2001: $32.5 billion 2005: $51.2 billion
Costco2001: $34.1 billion 2005: $51.8 billion
Wal-Mart2001: $180.7 billion 2005: $285.2 billion
Revenue
Revenue
$0 $50 $100 $150 $200 $250 $300
2001
2002
2003
2004
2005
Yea
r
Amount (in billions)
Wal-mart
Costco
Target
Financial Analysis – Net Income
Target2001: $1.1 billion 2005: $2.4 billion
Costco2001: $0.6 billion 2005: $1.06 billion
Wal-Mart2001: $6.2 billion 2005: $10.2 billion
Net Income
Net Income
$0 $2 $4 $6 $8 $10 $12
2001
2002
2003
2004
2005
Yea
r
Amount (in billions)
Wal-mart
Costco
Target
Profitability
0%
1%
1%
2%
2%
3%
3%
4%
4%
5%
5%
2001 2002 2003 2004 2005
Year
Pro
fit
Mar
gin
Target
Costco
Wal-mart
Asset Turnover
0
1
2
3
4
5
6
7
8
9
2001 2002 2003 2004 2005
Year
Tu
rno
ver Target
Costco
Wal-Mart
Firm’s Position / Core Issue
Core IssueCompetition with Wal-Mart
Target has one-fifth the sales of Wal-Mart
Firm’s PositionBased on more than just pricingStrive to encompass style, quality, and trend
Long Term Objectives
Increasing Market ShareAchievable and Measurable
ScenariosBest Case: Wal-Mart going out of business and
Target having a significant share of marketWorst Case: Target going out of business Most Likely: Wal-Mart maintains market share
and Target’s profit margin, sales, and net income will continually increase
Corporate Level Strategy
GrowthInternational Expansion
Create more competitive advantageIncrease market share
Business Level Strategy
Strategic Business UnitTarget Food Centers, Target Pharmacy, Target
Retail MerchandiseGeneric Strategies
DifferentiationFocus
Grand StrategiesInnovationProduct Development
Strategic Choice
DifferentiationHigher quality, more trendy clothing, better styleDrive-through PharmaciesExpansion into SuperTargets
Any Questions?