Table of Contents
The Case study is the following: The Target Corporation is ranked atop the chart in the market capitalization category with $190.4 B (Yahoo! Finance, 2011). As well as being a leader in market capitalization, Google is also ranked 120th as one of the world’s leading corporations (Forbes, 2010). According to Forbes (Forbes, 2010), “Google is responsible for maintaining an index of web sites and other content, while also making this information freely available to anyone with an Internet connection.” In addition, Google strives to be the global technology leader focused on improving the ways people connect with information (Forbes, 2010)
Industry Analysis
Target Corporation operates as a general merchandise retailer in the United States. Target offers in-store amenities, which comprise Target Café, Target Optical, Starbucks, and other food service offerings. It sells its merchandise through its stores; and digital channels, including Target.com. Target was founded on May 1,1962, in Roseville, Minnesota by John F. Geisse and the first president of Target was Douglas Dayton. The name “Target” was originated from Dayton’s publicity director, Stewart K. Widdess and was intended to prevent consumers from associating the discount store chain with the department store chain (A Bullseye View, (n.d.)). In 1966, Target expanded outside of Minnesota and into Denver, Colorado. The bullseye logo was updated for a more modern look and expanded into St. Louis. The year of 1968 ended with 11 stores and $130 million in sales (A Bullseye View, (n.d.)). By 1981, Target had 151 stores and $2.05 billion in sales.
The first Super Target was opened in 1995 in Nebraska. The year of 1995 was monumental for Target because the Target Guest Card was launched, this was the discount retail industry’s first credit card. The number of stores increased to 670 and the total sales increased to $15.7 billion (A Bullseye View, (n.d.)). In 2001, Target launched the gift registry to become an upscale department store. The year ended with 1053 stores in 47 states and $33 billion in sales. Operations to build in India began in 2004, the year ended with 1397 stores and $52.6 billion in sales. March 4, 2009, Target expanded outside of the continental United States for the first time (A Bullseye View, (n.d.)). On June 15, 2015, CVS announced their agreement to acquire Target’s pharmacy. In June 2013, Target expanded to Canada and two years later the first store in Canada opened its doors (A Bullseye View, (n.d.)). The Target Corporation’s main headquarters is located in Minneapolis, MN (A Bullseye View (n.d.)).
127 our experts are availableright now
The Target Corporation, as of 2018, has 1,850 stores open in the United States in all 50 states. Target has 39 distribution centers in the United States and has approximately 350,000+ team members. The total net revenue for 2018 was $73.1 billion and the net earning for 2017 was $2.9 billion (Target Corporate, (n.d.)).
Intergrading the Porter’s Five Forces with the Target Corporation, The Threat of Entry is moderate. The Threat of Entry is moderate because of national and international companies, the competition out there is cut-throat, and the mergers of companies. The Bargaining Power of Buyer’s risk is moderate as well, because of the diversity of the products that are to be purchased, a large selection of products in the store, constantly growing a positive reputation, and the arrangement of prices to complement a varies of needs. The Bargaining Supply of Suppliers risk is low because the suppliers give discounts on products that are in the stores, the incentives that go back to the customer; which is the REDcard, and the special promotions that Target has; which are BOGO and etc. The Threat of Substitutes risk is moderate because products that are offered at Target can be offered at another retailer that is lower in price and more convenient based on the customer’s location. The Industry Rivalry is strong because of the number of retailers, the online stores, such as Amazon that offer discounted prices and shipping incentives and carrying the same types of products.
Competitive Analysis
Target’s main competitors are Walmart and Costco, with Best Buy, Amazon, Dick’s Sporting Goods, and Walgreens close behind. Walmart is retail store that operates a chain of supermarkets, discount department stores, and grocery stores. Walmart has 5,358 stores that include Sam’s Club, discount stores, neighborhood markets, and supercenters. Walmart has 158 distribution centers in the United States, has approximately 2.2 million employees. The total revenue for 2017 was $500.3 billion and the total earnings for 2017 was $28.3 billion (Company Data, (n.d.)). Walmart is a larger company than Target and their numbers prove how large Walmart is compared to Target. Comparing Walmart to Target, Walmart has more stores because it is combining all of the different Walmart’s including Sam’s Club. Costco is a membership-only warehouse club which has 768 stores in the United States and eight distribution centers in the United States. Costco employees approximately 218,000 employees, their total sales for 2018 was $13.8 billion, and their total revenue was $141.58 billion (Statistic. (n.d.)).
Comparing Target to Costco, Target is smaller in stores in the United States, but their sales and revenue are significantly higher. Costco requires a paid membership to shop there while anyone can shop at Target. Amazon is e-commerce retail company. Amazon has 75 fulfillment centers and 25 sortation centers and employs approximately 566,000 full time and part time (Money.com,2017). Comparing Amazon to Target, Target is an in-person store as well as online; whereas, Amazon is an online store. Best Buy is a retail store that sells electronics which has 1509 stores, 23 distribution centers, and employees 125,000. Best Buy’s total revenue for 2018 was $42.2 billion, while the total sales was $1 billion. Comparing Best Buy to Target, Best Buy has more physical store; however, Target is larger when it comes to distribution centers, employees, revenue, and sales. Dick’s Sporting Goods is a sporting goods retail store, in which there are 729 stores in the United States.
Dick’s Sporting Goods employees 30,300 employees, the total revenue for 2018 was $7.3 billion, and the total sales were $330.4 million. Comparing Dick’s Sporting Goods to Target, Dick’s Sporting Goods sole inventory is sporting goods therefore, it is understandable that there are not as many stores, has less employees, and the revenue and sales are lower. Target has a sporting goods section in their stores; however, Target does not have the full selection of merchandise that Dick’s Sporting Goods carries. Walgreens is a store that specializes in filling prescriptions, health and wellness products, health information, and photo services. Walgreens has 9,560 stores and employees 240,000+ people. Walgreens total revenue for 2018 was $29.02 billion and $131.54 billion in sales. Comparing Walgreens to Target, Walgreen is a well know store, so for them to have a large number of stores makes sense and a lot of people go to Walgreens for their prescriptions. Walgreens and Target have several things in common, such as filling prescriptions, health and wellness products, and photo services.
The SWOT Analysis for the competitors are as follows:
Walmart Strengths
- Largest retailer in the world
- International presence
- Brand recognition Weaknesses
- Negative issues for customers and employees
- Easily copied business model
Opportunities
- Branching out
- ‘Improving quality standards
- Expand into developing countries Threats
- Aggressive competition
- Healthy lifestyle trend
- Data breaches
Costco Strengths
- Strong market presences
- Strong brand
- Competitive prices
- Strong membership Weaknesses
- Exclusive to members
- E-commerce activities
- Small marketing
Opportunities
- Expand product
- Business Strategies
- Attracting more customers
- International expansion Threats
- Competition with retail stores
- online competition
Walgreens Strengths
- provides access to consumer goods and services and pharmacy, health and wellness services
- operates 8,000+ locations
- strong brand Weaknesses
- limited to America only and has no international presence
- High marginal pressure on profits due to many players in industry
Opportunities
- easy and smooth solution for their health even in high prices so opportunity to increase prices and provide qualitative products
- Expand to international areas Threats
- government regulations in patent are not well accepted everywhere
- many competitors with same products but with different brands
Dick’s Sporting Goods Strengths
- Well known and reputable company.
- Attentive staff willing to help any customer
Weaknesses
- the products are expensive
- less personal feel when customers are being serviced.
- The ScoreCard is not accessible to everyone
Opportunities
- The ScoreCard has the potential to help the company and customers but needs to be more accessible.
- The staff has the opportunity to create a relationship with customers, especially frequent customers.
- an increase in customers with ScoreCards there will be an increase in productivity. Threats
- Smaller family owned sporting goods businesses
- providing a more personal community customer service experience
- People without email are not able to sign up for a ScoreCard.
Company Analysis
The market growth rate for Target is 7.65% annually (Target Growth Comparisons. (n.d.)). Target’s stage life is consisted mature. Target’s average customer statistics are 70% are females, the average income is $87K, the average age is 47, and 63% of their customers have kids (Target Media Network™. (n.d.)). Target developed several of their own brands including Simply balances, Archer Farms, and Target even has their own meat line called Sutton & Dodge. Utilizing their home goods lines (Room Essentials), Target credit cards, and Target food lines will allow for a large increase in company profits (Target & Vertical Integration, 2017). The Target Corporation is up-to-date on technology and innovations, they have a website for online shopping, a mobile app, 2-day free delivery when you use your REDcard, order delivery to your home, order online and you can either pick up in the store at the service desk or you can stay in your car and they can bring the order out to your vehicle using drive up. Target uses the company Shipt to deliver the items that are ordered and delivered the same day.
Target has a wide variety of products that will suit any of their customers. Target carries holiday supplies and décor; clothes and shoes for the whole family; diapers, wipes, formula; home goods, such as bath, bedding, furniture, home décor, kitchen and dining, lamps and lighting, patio and garden, rugs, window treatments, throw pillows, storage and organization, and vacuums; kitchen and dining, such as appliances, cookware and bakeware, glassware and drinkware, storage, bar and wine, cookbooks, and kitchen furniture; electronics; movies, music, and books; video games; toys; sports and outdoors; school supplies; makeup and personal care; health and pharmacy; grocery; pets; and household essentials. Target offers an in-store card, known as the REDcard; a debit card known as the Debit REDcard; and a MasterCard REDcard. When a customer applies for a Target REDcard and it is approved, the customer then qualifies for the 5% off their total order for using their REDcard. Target also offers discounts via their Cartwheel app, this is something that anyone can take advantage of. The Cartwheel offers a variety of items in the store that are either 5% off and up to 40% off when you use the Cartwheel.
The Target Corporation’s SWOT analysis is full valuable information that could give Target what they need to go to the next step and bring the company to a high level. After analyzing the SWOT analysis, the strengths that are listed are what makes Target successful. Target does have a very strong presence in the United States. Target’s loyalty program is known as the REDcard, when you use your Target Debit Card, Target Credit Card or Target™ Mastercard® (each, a “REDcard™”) at Target stores or Target.com, you will receive 5% off on your purchases. If you use a REDcard in the same purchase transaction with another form of payment, the 5% discount will apply only to the purchase amount tendered to your REDcard. 5% discount applies to eligible purchases minus any other discounts and the value of any promotional Target gift cards received in the transaction. Target reserves the right to discontinue or alter the terms of this program at any time (REDcard Exclusive Extras & Early Access: Target. (n.d.)).
When it comes to Target’s weaknesses, it would benefit Target greatly if they were international because that would generate more income for Target, Target is a little more expensive that it is competitors but some people would rather run in Target to get what they need versus going to a store like Walmart, and some potential customers might not like that Target does not utilize the “shop local” in their stores. Target has many opportunities to improve their market, the first opportunity would be to expand their business into international markets. Expanding into international markets would open up a whole new market for Target to explore. The threats that are against Target would be the competitors, it is always going to be something to keep up with them. Target could work on something that would benefit the customers as well as the company of Target.
Cost Control and Pricing
Target’s prices and cost are competitive with their competitors because they offer price-matching guarantee as well as their loyalty card, known as REDcard, that offers 5% off the current price. Target also offers a Cartwheel offer, which is offers that the consumer would add that would take an additional percentage off on top of the 5% when you use your REDcard.
Competitiveness
The Target Corporation’s competitive position is in a great place. Target has the price matching guarantee, the order pickup, order drive up, starting to incorporate free 2-day shipping, and working on delivering your order to your house within a few hours. Target keeps up with the competitors and makes sure they are in a place to be right there with the competitors.
