Target Corporation

By: Leigh Blackmon, Justin Napier, Sara Ratliff, and Brian Roundtree

Executive Summary
The Firm
Upscale discount chain that offers trendy merchandise at affordable prices

The Industry
Dominant Firms Wal-Mart, Costco, K-Mart Keys 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
Economic
Customers amount of disposable income Customers propensity to spend

Social
Age of customers Beliefs of customers

Technological
Technological forecasting Giving customers the ability to shop from the comfort of their own home

Ranking of Porters Five Forces

Present1) Substitutes 2) Rivalry 3) Powerful Buyers 4) Powerful Suppliers 5) Threat of Entry
1= Most Important, 5= Least Important

Suppliers
No similar companies Ex. 1-Including purchase volume Ex. 2-Including differentiation of inputs

Buyers
Wal-Mart, K-Mart, and Costco Need more product differentiation Increase buyer volume Establish brand identity Providing quality and performance in each store

Threat of Entry
Difficult to establish large companies Hard to imitate brand identity Large capital requirements

Substitutes
None- Due to quality and fashion Results in customer loyalty Results in brand identity

Rivalry
Wal-Mart K-Mart Costco Differentiation is key factor= Fashion Push Targets brand identity

Company Profile
Primary Activities
Customer Service Marketing and Sales
Advertising, promotions, market research, planning

Operations
Production and Quality Assurance

Company Profile
Secondary Activities
Human Resources
Recruitment, hiring, training, and development

Technology
Conduct research New trends and interests

Company Profile
Strengths
Loyal customer base Readily available products Constantly produces new ideas and exclusive products

Company Profile
Weaknesses
Higher prices than Wal-Mart
Population response to the economy

Not a global retailer

Other companies, such as Wal-Mart, are gaining a competitive advantage

Not all stores are SuperTargets

Customers want a one-stop store

Financial Analysis - Revenue

Target 2001: $32.5 billion 2005: $51.2 billion Costco 2001: $34.1 billion 2005: $51.8 billion Wal-Mart 2001: $180.7 billion 2005: $285.2 billion

Revenue
Revenue
2005 2004

Year

Wal-mart 2003 2002 2001 $0 $50 $100 $150 $200 $250 $300 Costco Target

Amount (in billions)

Financial Analysis Net Income

Target
2001: $1.1 billion 2005: $2.4 billion
2005: $1.06 billion 2005: $10.2 billion

Costco
2001: $0.6 billion

Wal-Mart
2001: $6.2 billion

Net Income
Net Income
2005 2004

Year

Wal-mart 2003 2002 2001 $0 $2 $4 $6 $8 $10 $12 Costco Target

Amount (in billions)

Profitability
5% 5% 4% 4% 3% 3% 2% 2% 1% 1% 0% 2001 2002 2003 Year 2004 2005 Target Costco Wal-mart

Profit Margin

Asset Turnover
9 8 7

Turnover

6 5 4 3 2 1 0 2001 2002 2003 Year 2004 2005 Target Costco Wal-Mart

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

Long Term Objectives

Increasing Market Share
Achievable and Measurable

Scenarios
Best Case: Wal-Mart going out of business and Target having a significant share of market Worst Case: Target going out of business Most Likely: Wal-Mart maintains market share and Targets profit margin, sales, and net income will continually increase

Corporate Level Strategy

Growth
International Expansion
Create more competitive advantage Increase market share

Business Level Strategy

Strategic Business Unit Target Food Centers, Target Pharmacy, Target Retail Merchandise Generic Strategies Differentiation Focus Grand Strategies Innovation Product Development

Strategic Choice
Differentiation
Higher quality, more trendy clothing, better style Drive-through Pharmacies Expansion into SuperTargets

Any Questions?