Case Study : Cat & Jack Essay

This report examines Target Corporation’s performance in a detailed strategic audit. The audit includes an external, internal and strategic analysis as well as a recommended course of action. The findings of the audit recommend a robust on-line/mobile presence to complement in-store sales, and to increase future earnings to remain competitive by building upon physical assets, brand value and logistical capabilities.

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’s business-level strategy is one that does not strictly focus entirely on one plan to gain a competitive advantage over competition. It encompasses various strategic and meticulous planning and decision making that is implemented in order to position the company at the top of the retail industry. With competition from the likes of Wal-Mart, Sam’s Club, and Costco, Target uses several clever and “out-of-the-box” ideas to attract consumer attention and ultimately increase market share within the industry. Most of the company’s ideas centered more on the differentiation of products and services provided to customers than lowering prices. For quite some time, the company’s plan was to not compete head-to-head with Wal-Mart in terms of lowering prices but instead to provide their customers, who they identify as “guests”, with a special experience every time they visited a Target location. One idea that was implemented was to market and sell upscale, trendy clothing and unique merchandise at discounted prices.1 This strategy, known as the “cheap-chic” strategy, focused on providing good quality clothing from various well known designers and fancy products from high-profile manufacturers for prices lower than their competition. This plan was vital because it began essentially began the concept of customers referring to Target as “Tar-zhay” which according to Patrick Barwise and Sean Meehan, who are university professors, as a “connote its trendy sensibility”. Target

Target Corporation (NYSE:TGT) is the leading large-format general merchandise and discount retailer in the U.S., challenging Wal-Mart in electronics, toys and apparel while also seeking to differentiate with higher-end fashions and products for an upscale audience. As of the close of their latest fiscal year (FY2011), Target operated approximately 1,760 stores encompassing 233,000 square feet in 49 states and the District of Columbia. The company is divided into the retail and credit card divisions and moves the majority of its products through a highly integrated network of 37 different distribution centers, which include four food distribution centers. Target is one of the most well-entrenched large format retailers in the U.S., has the ability to manage their pricing strategies at a level of accuracy and precision that is comparable to Wal-Mart (Henderson, 2001). Unlike Wal-Mart, Target concentrates on a value-based message that concentrates on quality and price differentiation to sustain their gross margins while Wal-Mart concentrates on supply chain efficiency and a continual reduction of supplier and transaction costs (Krishnamurthi, 2001).

In my personal opinion, Target should continue to develop a specific portfolio that is specifically targeted to its customer’s needs and likes, while focusing on maintaining the same product quality and variety for each store brand. Through its marketing strategy, the retailer has to assure the consumer they are purchasing the same quality product as if they were buying a national brand at a more affordable price; which at the end is more convenient for the consumer and does not have to sacrifice quality. Target should also expand to the South and Northeast where there are still plenty of attractive locations with no Target presence. This will attract more customers and consequently strengthen its store brands.

“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

Target’s industry is the retail industry. The overall outlook for this industry is positive. According to Nielsen’s Global Consumer Confidence Trend Tracker, the industry is looked upon in a “cautiously optimistic” fashion, especially in North America. In 2013, the industry was not doing very well (only 70% of retailers claimed to be as optimistic then as the 82% of retailers who feel that way now), but it has since recovered.

Target is one of the largest retailers in the United States. Target wants to be able to give guests better quality products for a cheaper price. They also want to be the one stop shop. Target relies on their team members to keep the guests happy so they always come back again and again. Target Corp. is the nation 's #2 discount chain (behindWal-Mart). The fashion-forward discounter operates about 1,765 Target and SuperTarget stores in 49 states, as well as an online business at Target.com. Target and its larger grocery-carrying incarnation, SuperTarget, have carved out a niche by

Target Corporation is a chain of retail stores commonly known by its famous logo of a red bull’s eye. It mainly targets the middle class people and prides itself for providing a range of quality products at affordable prices as opposed to providing cheap products, which are of poor quality. In this paper, I am going to look at the history of Target Corporation from its formation to the present day. I will also address the expansion of Target into Canada and the challenges that it has faced there. The challenges include rapid expansion (which has led to difficulty in controlling its operations), empty shelves, lack of variety, intense competition from other stores such as Wal- Mart and Canadian tire as well as the issue of price

Target’s sales have been strong for the past three years. 2016 did see a drop in their sales but looking at the cost of goods it can be seen that they are also keeping their supplier costs down. Target offers competitive pricing and will price match for their customers. This helps both Target and the consumer since Target keeps a happy customer and one that continues to come back and the customer sees that Target care about their customers.

Target Corporation is an evolving company. Target has great expectations for its future. For the year 2015, Target aims to expand its experience in order to effectively alter their customer’s expectations and shopping behavior. Target’s industry outlook starts with opening fifteen new stores for the year. The strategic store growth plans focus on localization and customer experience. Target will establish new store formats such as TargetExpress and CityTarget, while also offering new experiences, merchandising layouts and innovations in its general merchandising stores. (Target.com) The retailer’s TargetExpress is the smallest store format at approximately 20,000 square feet and aims to provide customers with effective quick trip shopping experience.

However, Sears’ weaknesses in apparel might have a much more detrimental effect on its future, far outweighing its strengths. Sears market share in apparel is on the decline in every major category, as can be seen in exhibit 1. If we say the needs of Sears customers in the apparel market, which is a new emerging demographic of more youth oriented consumers, is focused on trendy styles, then Sears has a significant weakness in that it is not among the top choices amongst the competition by any means. In the high end market, competitors such as Holt Renfrew, Harry Rosen, The Bay (which has taken back lost market share under the guidance of CEO Bonnie Brooks) and the impending arrival of Nordstrom’s really have the clientele loyalty and market share, leaving no room in this market for Sears. In the discount market, Wal-Mart has the obvious market share lead by far, and we cannot underestimate the impact Target will have when it arrives. Reports suggest Sears and Wal-Mart have the most to lose when target arrives , as can be seen in exhibit 2. 20% of survey respondents feel Sears will lose “a lot” of sales when Target opens, 50% feel that Sears will lose some sales, and over 70% feel Sears’s sales will be negatively impacted by Target. As we know, Sears has seen sliding sales since 2006 and Target Canada will definitely add to that. Again, Sears really has no room in this market either. When one factors in other competitors that the younger population are

The aim of this paper is to highlight the strategic position of the company with an overview of its internal and external environment. The study of its strategy, design and other forces, one can easily gauge why and how target has managed to become the retail giant it is today.

Target’s mission statement: “Our mission is to make Target your preferred shopping destination in all channels by delivering outstanding value, continuous innovation and exceptional guest experiences by consistently fulfilling our Expect More. Pay Less brand promise.” (target.com)

Target Corporation has recognized itself as one of the top retailers in the United States market on the basis of excellent service quality, customer experiences, operational excellence, strong financial position, and a wide array of product offerings. Through its high degree of service orientation at physical outlets and adoption of fair business practices, Target Corporation has become the most distinctive retailer in the eyes of its potential customers. Being one of the top-notch retailers in the United States, Target Corporation has to carefully strategize on its business operations and marketing tactics so as to keep itself in the row of competitive brands of the industry.