Introduction
Target Corporation is a retail company that is located in Minneapolis, Minnesota. It is ranked as one of the largest retail companies in the US. The CEO, Gregg Steinhafel, resigned following a chain of events that led to the organization losing its identity and most of its customers.
The top officials embarked on the process of finding a replacement. They finally settled on the first non-homegrown CEO, Brian C Cornell, who was formally the CEO of PepsiCo America and the Sam’s Club. Cornell helped the company take a turnaround, as Target’s financial performance improved significantly after his appointment as the chairman and CEO.
Situation Analysis
Target Corporation is a company that operates in the discount retail store industry. The industry has a lot of players, thus it experiences a high level of competition.
External Situation
The general economic situation is not very good for the company. Most people do not have a habit of spending a lot of money in retail shops when there are economic hardships, although they may still end up spending more due to impulse buying because retail shops display their goods appealingly.
The ailing economic situation has a negative effect on the retail industry, as the general profitability of most organizations in the industry is going down. However, it should be noted that the economic situation recently showed signs of recovering and the companies in the retail industry are expected to have improved profitability, as people will be willing to spend more.
Consumer Trends
Most of the customers who go to shop in the retail outlets are the young and youthful generation. These are customers who do not have a high income; therefore, they do not intend to spend a lot of money on shopping. Instead, they look for relatively cheap products and services. They, however, end up spending more than expected as a result of impulse buying that is caused by the attractive display of products and the creativity exhibited in the shops.
Internal Situation
Target Corporation had a good financial performance that saw it become one of the top retail stores in the United States for a long time. However, the company had financial challenges in the recent years, where it registered dwindling profits. In the year 2013, it made losses that were said to be as a result of a data breach.
Management and culture
Target has a kind of management that is highly creative and open to new ideas that can help it maintain its competitiveness. The corporate strategy is to sell cheap products that can be affordable to the common citizens. Creativity is the hallmark of the company’s competitiveness.
Target market and customers
Target Corporation targets mostly the low and middle income earners, although it also has products for the high income earners. Its customers are mostly the young generation and the common citizens.
Product
There have been complaints from the customers about the product mix. Target customers feel that the product mix adds pressure on them.
The buyers are unwilling to take the risk of acquiring new products, thereby creating an unnecessary cost to the suppliers of the products. The company has introduced online stores, which have been working well for it.
Price
The pricing of Target Corporation is essential to its success. It utilizes the market-oriented pricing strategy, whereby it prices its products based on the market situation and the customers it is targeting. It established the strategy after conducting a research on the market situation.
Promotion
Promotion of Target Corporation is now based on online promotions, which is a change from the traditional way of doing promotions. This strategy is working, as many people are able to access and learn about the company’s products.
Distribution
Target Corporation has a good relationship with its suppliers. The company is also able to supply its goods widely to reach its target customers. The display in the stores shows the success of its distribution strategy, as it attracts many customers.
SWOT
Recommendation
The company had a good performance over the years. However, the trend changed in the recent past. Target will need to change its product mix to one that is more acceptable by the customers in order to counter the downward trend and the stiff competition from the existing and upcoming retail businesses.
For instance, it should not mix the new products with the old ones. The current pricing strategy should remain unchanged for now because it is profitable. The promotion strategy needs to adopt the new and upcoming technology to remain relevant and competitive in the industry.