The Target brand was created byGeorge Draper Dayton. Dayton Dry Goods Company opened back in 1903, which todayit is known as Target Corporation. Minneapolis, Minnesota is where the firststore opened up, and also where the Target Corporation headquarters are currentlylocated. Dayton’s store was a huge success due to great products at a low cost,and fair business practices.
By 1960 after George Dayton death the newpresident Douglas Dayton organized plans for an expansion in a form of discountstores under the Dayton name which would include 75 different department. Thefirst Target store opened in Roseville, Minnesota. By 1962 the state ofMinnesota had three more Target stores. By the 2000s, Dayton –HudsonCorporation changed the name of the company to Target Corporation, and by 2001they had stores in at least 47 states. Target Corporation received the highestsuccess in 2005 by exceeding $50 billion in annual sales.
Today Target is nowthe second largest discounted store behind their competitor Wal-Mart. Targetsells a number of products ranging from grocery, clothing, health and beauty,furniture, electronics, etc. There are now at least 1,800 Target locationsthroughout the United States. Target Stores, Super Target, and City Target (TargetExpress) are the three type of store designs Target Corporation currently offer.(Target through the years, 2018) Target’s current external environmentis the high demand for smaller neighborhood stores. Customers prefer to shop atsmaller stores which is a challenge because most of Target stores are big boxstores. Ecommerce retails such as Amazon.com is a threat to Target because theprices online are cheaper, they mostly offer free shipping and/or reduceshipping, and customers enjoy the relief from shopping at home.
Target is nowattracting the attention of the millennial shopper. The growth of Dollar Storesalso is a huge threat for Target. (SWOT analysis of Target Corporation, 2016) Target Corporation most recent strategyis to invest more than $7 billion to adjust to the market preferences. Targethas realized that consumers are shopping differently, and are taking the stepsimprove the overall shopping experience. The first objective Target wants toimprove is its digital capability for customers. Target has expanded theirdigital infrastructure to increase speed in order to rise up digital sales.
This strategy has proven to work in the past which resulted in sales growth. Targetobjective is to continue this plan by combining Target’s savings applicationCartwheel with their flagship application. This strategy will provide shopperswith a simpler shopping experience. Target plans to reimage their stores inless than five years. The company plans to have 600 location reimagine by 2019.The stores will look and function differently. Backrooms will be used asdistribution centers, which would allow customers to get their products shippedfaster. Target recently opened up 30 small store formats, and have plans tohave 130 operating small stores format by 2019.
The objective for the smallstore format is to allow customers to experience the convenience of onlinepickup, and a shorter shopping trip. Within the next two years Target will beintroducing more than 12 new exclusive brands in the clothing and homedepartment. The clothing and home department are two of the most profitableareas for Target. (Cornell, Mulligan, Smith 2017). Target goal is raise their minimumhourly wage to $11 an hour by the end of 2017, and then to $15 an hour by theend of 2020. This bump in pay will affect both regular and seasonal workers.
Wal-Martin the past were always the first to announce the raise in hourly salary, nowTarget is taking lead to compete with their competitor to make pay more competitivein the market. Target goal to reduce the turnover rate by offering better pay.The $11 an hour pay surpass the minimum wage in at least 48 states. (Hsu, 2017) If Target were to reach these strategiesand objectives within the next five years they will see a growth in sales. Thepopularity of smaller store is huge in the market right now.
Target’s goal isto have 130 smaller stores opened within the next two years. Target should atleast have 200 smaller stores operating by the fifth year. Investing in newclothing and home brands may attract new customers to Target. Target goal is tohave at least 12 new brands within the next two years. Target has seen muchsuccess in the pass with brand such as Cat and Jack and Pillow Fort whichexpanded their market. Five years from now if Target continues on this paththey should indeed have more brand labels across other departments in thestores such as health and beauty.
(Cornell, Mulligan, Smith 2017). Strategy outlines on where thecompany wants to go, and how they will achieve it. Companies must first recognize both internaland external to determine what type of strategies to pursue. A SWOT analysis is a beneficial mean for reviewing acompany and mostly used for investigating internal and external factors inorder to reach a logical tactic to support decision making. (Asian, Cinar,Kumpikaite 2012).
Strategic results may affect stakeholders. Stakeholders playa vital role in defining whether a company may accomplish and withstand highperformance, comprise of shoppers, workers, dealers, bankers, and thecommunity. Stakeholders should be aware, and be included in the creation of newstrategies. (Harrison, Coombs 2012).
If I were CEO of Target Corporation the firststrategy I would recommend would be to redesign the online shopping experiencesimply because more shoppers are shopping more online. Target should researchother online retailers such as Amazon.com to see how they are successful. Iwould recommend that Target offers free shipping occasionally for customers.Target doesn’t offer free shipping unless the customers spends a certain amountof money shopping.
Target should also look into free two- day shipping deals,and more in store shipping to cut down on cost. Target has very little commercials andadvertising. I would recommend to change their outdated slogan “Expect More.Pay Less” to something fresh and new to go along with the Millennials shoppers theyare now attracting. My next recommendation is to try to appeal more tochildren, and the toy department. With the recent financial issues anduncertainty Toys R Us is now facing, this will be the perfect opportunity toenhance the toy department.
Target should utilize social media, and toy commercialsto excite children to the store. Also, Target should at least once a month havean activity for children in the stores on weekends such as for example,breakfast with Disney princesses, or taking pictures with your favorite superhero. Layaway during the holidays would be essential to have. Target shouldinvest in layaway at least during the holidays. Layaway have proven to besuccessful during the holidays at Wal-Mart in terms of profits. Wal-Mart is Target’s main competitors.Wal-Mart’s recent strategies for this upcoming year is to spend around $11 billionon capital expenditures centered on store remodels and digital channels ratherthan opening more stores across the U.S.
Wal-Mart also has plans to expand globally,and focus around markets in China and Mexico. The plan is open 255 storeaboard. Wal-Mart’s goal is to spend most of their time investing more intoecommerce and ingenuities such as online grocery pickup. Jet.com has alreadybeen acquired by Wal-Mart, and have proven to be a success. Wal-Mart iscurrently acquiring for other digitally brands such as Shoebuy, Moosejaw,ModCloth, and Bonobos. Amazon.com is an online rival to both Wal-Mart andTarget.
Wal-Mart recently created free two-day pick-up shipping for orders over$35 to compete with Amazon Prime. Wal-Mart plans to announce a program calledPickup Discount which offers shoppers savings on online only products if theypick them up directly from a store. Recently, Wal-Mart has started withcharging a lower price for most products if customers pick them up in thestore.
The goal is to tie the cost of shipping more directly to the customer tolure them to come into the store so they may save money, and Wal-Mart bottomline may produce. (Bowman 2017). The most effective strategy Wal-Mart iscurrently pursuing is investing more in ecommerce and acquiring other digitallybrands. Target is investing more in ecommerce design, however, they are notseeking other online brands to help strengthen their sales. Target should domore research into Jet.com, and see how well Wal-Mart did last year. Targetneed to aggressively explain how they will compete with their rivals. Wal-Martis opening fewer stores, while Target have plans on opening more stores aroundthe U.
S which is risky considering online shopping is high in demand. Customersare shopping online more because they want to find the best deal. However,companies still need shoppers in the store and the best way to attract customersis with Wal-Mart Pickup Discount strategy. Unlike Wal-Mart, Target is notconsidering the idea to expand their brand globally.
ReferencesAsian, I. Cinar, O.,& Kumpikaite, V. (2012). Creating strategies from tows matrix for strategic sustainable development of Kipas Group.
Journal of Business Economics & Management, 13(1), 95-110. Retrieved January 02, 2018from http://libraryresources.columbiasouthern.edu/ login?url=http://search.ebscohost.com/login.
aspx?direct=true&db=bth&AN=71862779&site= ehost-live&scope=siteBowman, J. (2017, November25). What to Expect From Wal-Mart Stores Inc. in 2018. Retrieved January 06, 2018, from http://www.fool.
com/investing/2017/11/25/what-to-expect- from-wal-mart-stores-inc-in-2018.aspxCornell, B., Mulligan,J., & Smith, C. (2017). Investing to Grow: Target Commits More Than $7 Billion to Adapt to Rapidly EvolvingGuest Preferences. Retrieved January 06, 2018, from http://corporate.
target.com/about/history/Target-through-theyearsHarrison, J., &Coombs, J. (2012).
The moderating effects from corporate governance characteristics on the relationshipbetween available slack and community-based firm performance. Journal of Business Ethics,107(4), 409-422. Retrieved January 05, 2018, from http://libraryresources.columbiasouthern.edu/login?url=http://search.ebscohost.com/