Running Head: STRATEGIC ANALYSIS PROJECT OF TARGET CORPORATION 1

A Strategic Analysis Project of Target Corporation

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STRATEGIC ANALYSIS PROJECT OF TARGET CORPORATION 2

A Strategic Analysis Project of Target Corporation

Introduction

Target organization was established in the year 1902 Minnesota. The organization is well

known for offering differentiated commodities to its customers at subsidized prices that ranges

from luxury commodities to everyday requirements. The organization’s suite of fulfillments

choices, loyalty towards innovation, efficient supply chain and enhanced technology has enabled

the organization to give their customers with the needed shopping adventure (Capell, 2019). The

approach embraced by the company towards business administration has opened modern routes

for future blossoming. For facilitation of consumers, the existence of digital mechanisms has

made it easier for buying the commodities.

It is the third biggest ‘big box’ discount stock operator in the U.S after Walmart Stores

organization and Costco Wholesale. Unlike Costco and Walmart, Target has no important

operations outside the U.S.

The organization incurred heavy losses from a badly planned and poorly executed extension into

Canada, its initial attempt to function outside the United States. The organization reportedly lost

approximately $5.4 billion in Canada. The retailer’s prestige was poorly destroyed when it was

enforced to close 124 stores and pull fully out of the state in April 2015. The organization is still

suffering notable losses from the Canadian fiasco; it reported a net income of -$900 million on

July 31, 2011 (Harris at el, 2018). Target Corporation presently operates 1,799 warehouse and 38

distribution centers in the U.S. It reported a TTM returns of $72.71 billion on 2015, unlike

Walmart Corporation, Target has experienced newest revenue blossoming in recent years.
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The following is a revelation of the competitive advantages of Target Corporation by examining

its latest dynamic via a SWOT analysis as it has permitted it to attain supremacy in the retail

industry of the United States.

SWOT Analysis

Target’s Strengths

Broad range of products

One stop outlet for all commodities including Pharmacy, designer clothes, grocery,

electronics, sporting goods, home décor among others (Piazza, 2017). For customers to benefit,

their digital mechanisms also offer a broad range of products along with complimentary

diversity.

Consumer shopping experience

Target Corporation provides a good experience to vendors as compared to Walmart via

an enhanced floor plan, good shopping carts, clean stock environment, marked and well-lit

aisles.

Enhanced inventory administration

Different types of replenishment and inventory management knowledge such as planning,

vendor management, demand forecasting and seasonality are implemented to reduce spoilage,

lost sales, and inventory depreciations.

Target’s weaknesses

Expensive

  According to a research conducted business insider, the company charges around

15% more for groceries as compared to their stiff competitor Walmart.   

Vendor Data Security

 In the year 2014, the organization had experienced one of the most terrible data breach

occurrence. About 70 million vendors’ credit/ debit card information was taken. As an outcome,

it has negatively affected its reputation, and they had experienced much class-action

proceedings. 

Target’s opportunities

The organization’s partnership with CVS

  In December the year 2015, CVS Health had obtained the company’s clinic and

pharmacy business for around $1.9 Billion. What it expresses is that the organization’s pharmacy

sector is operated and managed by CVS health currently (Alghalith, 2018). It offers Target

vendor’s a huge moment to get health care which is leading in their outlets.

Minute Format outlets

Target Company has been starting minute format outlets that are situated in dense urban

sections, college, and campuses. These outlets are approximately one-third of the size of their

ordinary average size outlets.

REDcard presents Loyalty scheme.

The organization has a huge chance to enlarge its REDcard loyalty scheme by permitting

it to gain perceptions about changing vendors’ habits and what they like ("Target Corp", 2008).

This will also give the organization access to vendor’s information for promotions and

marketing.

Same Day Delivery

Target has a grocery delivery facility Shipt for $550 million to offer same-day

transportation like Walmart and Amazon to enhance its effort of digital accomplishment.

Enlarge Private Label labels

Another main opportunity for Target Corporation is to blossom its own portfolio of

exclusive label brands. Private label brands assist differentiate retailers, and they carry elevated

margins.

Target’s Threats
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Localized Competition

The organization employ in a much competitive and a minimal margin market. Its main

competitors like Walmart and Costco among others have various outlets situated close to the

localized populace, thus effecting their market share.

Changing vendors’ preferences

The production of Target organization may have extreme negative effects due to the

blossoming trends of online advertisement and shopping. The growth speed of competitors like

Walmart and Amazon is moving further, propelling its supply chain administration with online

shopping.

Even though it may form chances for blossoming, the logistics enlargement and on-time

transportation by Amazon towards changing consumers’ demands may put pressure and create

challenges for the organization to compete in densely populated centers.

Dereliction to differentiate

Failure to differentiate may be a shortcoming to Target organization. Their label loyalty

may be afflicted because of the shift of various shoppers towards price-sensitive and emotional

online shopping.

Exposed to Economic debacle

The organization’s sales are very dependent upon the microeconomic elements. Since

most of the organizations outlets are in the US market, whenever there is a roughness in the

economic health of the U.S, the organization’s business is also negatively affected.
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Target’s competitive advantage

Basing on the SWOT analysis I have previously done, there are various strategic plans

that Target Corporation can implement at this time to enhance it productivity. First, the

organization should have the ability to perform and manage a highly successful supply chain and

the capability to attain high economies of scale, because of its large market presence and

combination of private labeling. The factors that can make the organization to achieve a

successful supply chain is the large geographical area of its distribution hubs.

The organization operates and controls 37 distribution hubs ranging from Washington to

North East of Wilton. Having the capacity to service any of their 1700 and more outlets in a

timely manner (Morritt & Weinstein, 2012). This will create a huge geographical marketplace to

operate successfully that some of its smaller competitors might not have avenues to. The other

important factor that the company should consider is offering diverse commodities coupled with

elevated economies of scale. Target offers commodity lines in sections such as accessories, home

furnishing, pet supplies among others. By doing so, the organization will create a one shop outlet

effect which contain an elevated convenience element in the eyes of vendors.

References

Alghalith, N. (2018). Targeting IT Opportunities at Target. Journal of Strategic Innovation and

Sustainability, 13(4), 10-19.

Brandner, T. (2019). Financial Analysis: Sleep Number Corporation.

Capell, A. (2019). Strategic Audit: Target Corporation.

Harris, S., Rumke, N., Flynn, J., Ranzau, Q., & Miller, H. (2018). Financial Analysis of CDW

Corporation.

Morritt, R., & Weinstein, A. (2012). Segmentation strategies for hospitality managers: Target

marketing for competitive advantage. Routledge.

Piazza, F. S. (2017). Bitcoin and the blockchain as possible corporate governance tools:

Strengths and weaknesses. Bocconi Legal Papers, 9, 125.

Target Corp. (2018), 5(4), 269-269. https://doi.org/10.1002/div.7874