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Target Corporation History and Current Situation Essay

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Updated: May 30th, 2020

Target is another name that refers to Target Corporation. This company is a retail corporation found in America. The first retail store was opened in 1902, in Minneapolis, Minnesota. During its inauguration, this store was named Dry Dayton Goods Corp. Target Corp currently operates under two distinct divisions namely the retail segment, and the credit card segment. The retail division incorporates all the integrated online businesses and the merchandizing business operations of Target Corp. The retail division in the United States enables clients to establish the stores where the products are, and buy them online.

The credit card division provides credit services to eligible clients or consumers via the RED cards such as the Target Visa, and Target Corp Card. In the United States, Wal-Mart Corporation is the largest discount retail company followed by Target Corporations, which is ranked second. From the departmental stores, Target Corporation has overwhelmingly grown to make its first appearance in Canada. The merchandizes offered by this corporation have prices that are discounted. Target is now reportedly offering branded debit cards.

History of Target Corporation

Dayton John finished constructing a building that had 60 stories in the fiscal 1902. The successfully finished structure was situated in Minneapolis city center and was leased to Goodfellow Corporation. This corporation transferred its departmental stores to this newly built Dayton structure. John later in the fiscal 1903 had Dayton Dry Goods Corp, which took the name of the Goodfellow departmental stores (Lehman, 2002).

In Minneapolis, Dayton Corp retail stores were successful, but in the fiscal 1950, John bought the departmental stores belonging to Lipmans Corp. This corporation was situated in Oregon, Portland. Nevertheless, Dayton John failed to assimilate the company with other enterprise that already existed. In fact, Lipmans was independently managed. The first departmental store was thereafter started by Dayton in Southdale, Edina in the year 1956, and it was the initial and totally attached departmental store.

Dayton Corp in the financial year 1962 invested in discount business. The initial store for Target Corp discount was located at Minnesota, Roseville. Target Stores, which were the originally formed subsidiaries of Dayton Corp, were created by the end of 1962. During this period, Target Corp had four departmental stores only that operated in Minneapolis (Hahn, Lisa, and John 2005).

In St. Louis Missouri, Target Corp opened two retail stores in the fiscal 1968. The management became transitional leading to the purchase of Lecmere Chain Store and the construction of Venture departmental store. By 1969, the acquired Target Stores focused their business operations on appliances and electronics. Dayton in 1969 formed a merger with JL Detroit Hudson Corp to become Hudson-Dayton Corp (Hahn, Lisa, and John 2005).

The company, Hudson-Dayton Corp through expansion purchased various departmental stores situated in West Coast. Nevertheless, in the fiscal 1971 the company expanded rapidly, but reported a decline in returns because it had inexperienced staffs managing the subsidiaries. Macke Kenneth and Pistner Stephen managed Hudson-Dayton and salvaged it from becoming bankrupt. Since this period, Hudson-Dayton and Target have been affluent in this industry. Target Corporation was the name given to Hudson-Dayton in the fiscal 2000, and the company still operates Target departmental stores to generate income (Lehman, 2002). In the United States, Target Corp currently generates over $63.38 billion in sales returns, and operates 1,592 departmental retail stores.

The current situation of Target Corporation

The major force in this sector accrues from the rivalry amongst market competitors. Target Corp and Wal-Mart appear as leaders in the overall retailing of merchandizes. Whereas Target operates domestically, Wal-Mart makes its presence felt worldwide. Wal-Mart Corp can now obtain funds, negotiate with sellers, and benefit from economies of scale. Compared to Target Corp, its operational magnitude is just about six-times. Regardless of such merits, the competition between these two corporations can be matched fairly (Hahn, Lisa, and John 2005). Both the companies deal in differentiated products. However, they are market rivals when contending for the disposable consumer income. Such an antagonism occurs in the commodity segment.

Despite the presence of substitute commodities, minimal threat is experienced. The discount retailers have lower prices than the departmental stores. Thus, the latter category seems to be unappealing to clients who seek to buy low priced products. On the other hand, both the recycled supplies as well as prudence supplies present merchandises at very low prices. Nevertheless, they are unattractive to the clientele as well as to the consumers (Fortune 1).

In the retail market, consumers have strong powers to bargain. Various alternatives are available for buyers to access. However, in the industry, rivalry amongst firms is substantial. This brings about the industrial price competitions. Most of these actions tend to increase the buyers bargaining powers (Hitt, Ireland and Hoskisson 51). Thus, the clientele choose merchandizes to be purchased, and businesses organizations they will visit regularly.

The suppliers in the industry hardly have any powers to bargain. After the import barriers were lowered, the level of market rivalry amongst global suppliers intensified. Thus, it benefited the industrial retailers. Low labor- force costs permit the universal suppliers to generate commodities that are of low prices. This enables them to compete for the dominant market share compared to the local producers. When market rivalry takes place, the commodities that clients demand and are willing to purchase seem are acquired at low prices. When this occurs, corporations will be able to maintain both low margins as well as low prices (Lehman, 2002).

In the United States, only Target Corp currently conducts its business operations solely. However, the famous market rivals include the internet businesses, drug stores, groceries, specialty stores, discounting stores as well as the local nationwide departmental stores. The market rival commodities are identical to those proffered by Target Corp. Because of the increased competitions, firms have opted to consolidate their market operations. Hence, firms that managed to consolidate their businesses gained competitive advantage (Hitt, Ireland and Hoskisson 52).

The market entry barriers appear to have reduced continuously. The global trade appears liberalized and this has permitted the level of market opposition to enlarge. The economy of scale is of great essence in business operations. Any company that operates in this environment must be enjoying economies of scale. The justification for this point is that global corporations having vital necessities are allowed to expand their business operations to the US. Various competing corporations are currently planning to open their stores in the US. Tesco Corporation is amongst such companies (Fortune 1). This corporation has the capacity to offer low-priced commodities and therefore anticipates generating huge returns.

Challenges faced by Target Corporation

While pursuing its global operations, Target Corp encounters both legal and cultural challenges. As regards to cultural challenges, Target Corp has opted to expand its international operations to Canada. The Canadians have their own culture, and the company is obliged to adopt them. However, managing and dealing with workers from different cultural backgrounds is a major challenge to Target Corp (Target 2011).

Target Corp faces legal challenges in areas where the company operates. Target Company is compelled to follow and abide by the taxation, labor, and environmental laws. In case the company violates any bylaw, it might be banned or fined. Most multinational corporations tend to violate these bylaws, and Target is not exceptional. Furthermore, when expanding its operations to the global arena, Target Corp encounters various barriers to entry into the new markets. Producing, supplying, and differentiating products at low costs are some of the major challenges facing Target Corporation.


In the market where Target Corporation operates, globalization has enabled individuals and groups to interact freely with other groups in the world (Target 2011). In fact, the term globalization entails different business aspects. The dimensions of globalization include the economy, ecology, technology, politics, and culture. The global economy has enabled Target Company to sell most of its commodities in various countries across the world. This implies that Target Corp now participates in the international trade.

Despite taking part in the international trade, Target still faces challenges relating to the global economic barriers. Each country has international trade barriers namely export charges, tariffs, and import quotas. However, Target Corp does not have any alternative, but to take part in the global trade. The company intends to increase its returns through global operations. For instance, Target looks for new markets to put up more stores. This allows the company to market its services and products. Global operations allow Target Corporation to obtain or have access to resources, minimize the incidental risks related to seasonal and cyclical sales effects, as well as to maintain its competitive advantage (Target 2011).

The recent venture in Canada is a clear indication that Target Corporation is not entrenched in the global markets. The corporation is yet to realize whether the international operations are attainable and feasible. According to Target (2011) report, the corporation initiated and established the Canadian operations to have a sweeping presence in the region (p.1). By having its presence, felt in Canada, Target Corp hoped that it could have a competitive edge and continue to maintain a dominant market share in the retail industry. The Canadian clients constitute a significant portion of Target Corp non-American clients. Therefore, compared to other market rivals, Canadians believe that the company can probably offer better services and products to the market. However, the services and products sold by Target Corp in Canada are similar to those sold to clients based in America (Target 2011).

Corporate social responsibility (CSR) and ethics

The CSR practices make Target operations appear contrary to other companies engaging in CSR practices. Target ensures that shareholders have the communal right over wealth maximization. The CSR report gives an idea on how the company is fulfilling its liabilities to the stakeholders.

Responsibility to the owners

The company’s main responsibility towards the owners is to make certain the optimization of their assets. For Target to keep on augmenting its revenues, it recognizes that it should answer questions concerning the society. If Target aims at rewarding the customers, it should chip in by making their purchases. Thus, the corporation advances in realizing huge profits through implementing the CSR initiatives.

Responsibility to the consumers

Target is responsible for ensuring that customers are always satisfied with what they obtain from the company. Thus, the corporation makes sure that its goods are harmless to the clientele. The company is determined towards improving the quality of its products. This enables Target to reimburse and acquire goods and services that meet or exceed their desires. It makes certain the safety of its stores such that customers are free from industrial accident while shopping (Target 2011).

The company approach towards CSR

Target purports to have done well to the entire social structure and is capable of performing extraordinarily well. Therefore, it uses the social contract loom to CSR. Target desires to implement programs that advance the security and physical condition of individuals. The corporation is charitable to the public. In rankings, Fortune magazine positioned Target Corp at number twenty-two for being the most charitable store to the society (Fortune 1). Moreover, it tries its best to avoid any approach that is detrimental to social order. These simple market connections put the shareholders happiness beyond those of other market participants. Hence, Target Corp surpasses their dominance in the society.

The Business environment

External factors

In the retail industry, there are peripheral businesses factors that affect Target marketplace environment. The market research carried out by the corporation is a major consideration in any business environment. This is essential for Target to ensure that its market efforts are targeted towards the correct clientele. It further ensures successful marketing through formulating requisite marketing strategies. Factors affecting Target business operations include technology, innovations, lawful requirements, social and artistic trends, natural settings, and financial condition.

Economic conditions

The company’s functions are affected by key changes in aspects that surround the living standards in Canada and US. Besides, Target’s situation is forcing the management to trim down its costs to generate additional returns. This situation occurred in the slump era, and it was detrimental to the US economic condition. In the fiscal 2011, the company has managed to keep its costs low causing the returns to increase.

The legal requirements

Target modifies the rules and regulations governing the company structures. The key strategy in attracting the customers is how the company packs its products. This relates to the environmental law. Target Corp retails its products other than manufacturing them. Hence, it hardly has any bottlenecks with the issue of packaging (Target 2011).

The SWOT Analysis

The strengths

It is a requisite that Target Corp ought to leverage current strengths to enter into the metropolitan marketplaces effectively. The company has a high reputation and is acknowledged for the provision of affordable quality products. In fact, Target Corp has strong brand recognition while its brand justness could be effortlessly transferred into the city marketplace. Target Corp is well established and has contented to gain dominant market share. The company has the capacity to fulfill the clients’ requests via providing single stop shopping experience (Gowda et al. 29).

In Target Corp stores, various services and product mixes can be easily customized for the city clients. Thus, the company boasts of strong merchandise and service mixes from the time it established a strong marketplace presence. Finally, Target Corp has clean stores with layouts that are well designed. Target Corporation has a strong representation hence it can charge hefty prices on classified products. The design of secretive and peripheral blend labels provides grand margins and enhanced earnings from classified products (Gowda et al. 29).

The company weaknesses

Target is renowned for offering fashionable and quality products to clients. However, the company struggles to overcome the preceding icon of providing non-constructive clothing items. Target succeeded to merge with other cloth designers, but still struggles to meet the constantly changing trends in fashion. Furthermore, Target proffers various signs, and hence signage is weakness that Target faces (Gowda et al. 29). Finally, Target Corp utilizes Target.com to help clientele access and order products online. However, Target.com does not offer all products through this online tool.

The company opportunities

Target Corp has numerous opportunities namely the ability to connect with the community, first mover effect, food offerings, and Target.com. The urban communities have diversified needs that offer many opportunities for Target Corp. These opportunities enable the company to enhance its contacts with local clientele through engaging in CSR (corporate social responsibility) initiative. Target.com acts like a strong source for enhancing client-supplier connection as it enables city clientele to enjoy the online offering and in store shopping experience (Gowda et al. 30). Thus, Target.com increases contacts amid the company website and retail stores by offering food in various locations.

The company threats

Target Corp has troubles to adapt in the uptown stores set-up. The company constructed spacious retail stores to attract clients in the built-up cities, but adapting in the suburban stores set-up has been difficult. Besides, the urban areas present both political and legal barriers. For example, Target might encounter challenges relating to increased real estate and labor costs in addition to location restrictions (Gowda et al. 30). The location of Target may cause cultural or historical building disruption in the urban centers.

Various discount retail stores seek to enter into the urban markets. Thus, one of the threats experienced by Target Corp is the increasing competition. International firms namely Home Depot, Linen ‘N’ Things, Best Buy, and Wal-Mart engage in the company’s broad series of product offerings. They are posing intense competition for their opponents (Gowda et al. 30). They include online commerce, autonomous retailers, medicine stores, and superstores. In addition, the discount and specialty stores and local and National area stores cause competition to the company in the urban centers.

Furthermore, the quickly varying trends and slowdown in the American market is another threat. The demand for decorations, fashions, and equipment are rapidly changing thus making it complicated for the company to stay updated in matters relating to fashions. Therefore, the company will encounter difficulties due to fluctuations in market conditions and varying trends in demanded fashions (Gowda et al. 30).


To avoid facing risks associated with legal and cultural challenges, the company must conduct prior market research. This will assist Target Corp to determine market uncertainties and challenges in its global operations. Besides, it is recommended that the company should look for an entrenched domestic company and form a business cartel with it. This will help the company to learn and abide by all the laws and cultural practices. Cartel may help the company to enjoy economies of scale and produce differentiated commodities at low costs. Besides, the company should use the locally available resources including labor to produce products at low cost. Nevertheless, to avoid unhealthy market competition, the company should avoid price wars. This is likely to intensify the level of market competition, which may make the company loose it market share.

The company should also implement unusual business strategies to support its international operations. The selected strategies should be based on the location where the company wants to conduct its business operations. Applying similar global expansion strategies without conducting prior market research could be detrimental.

Works Cited

Fortune. “Ranked within States.” Fortune, 165.7 (2012): 1. Print.

Gowda, Bhavya, Eric Rentsch, Jessica Sapick, Maggie Smith, David Wald, and Lauren Yaffe 2007. PDF file. Web.

Hahn, Linda, Lisa Kwak, and John Palys 2005. . Web.

Hitt, Michael, Ireland Duane, and Hoskisson Robert. Strategic Management: Competitiveness and Globalization Concepts. Boston, MA: Cengage Learning, 2010. Print.

Lehman, Brothers 2002. Target Corporation: Over-weigh the Targét! Web.

Target, 2011. Here for Good. Web.

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