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The trade corporation Target has managed to establish itself as a successful and popular company providing services to the population in many American states. Nevertheless, the breach that occurred in December of 2013 significantly influenced the authority of the corporation and caused quite a serious public outcry both among the population and the press. It resulted from the situation described by Krebs (2014) who gave a thorough explanation of the incident. Stealing data from credit and debit cards became a real problem, and this hacker attack, according to Lunden (2015), cost the company about 70 million of dissatisfied buyers and more than $ 162 million, which it had to compensate for angry customers.
Company Features and Case Description
Target Corporation is a well-known Western retailer selling products through its stores and the Internet (“Target Corp (TGT),” 2016). The peculiarity of the company was increased attention to the collection and use of information about clients. A wide range of data from the history of purchases to the movement of buyers through the trade halls was checked and analyzed. A significant response was the campaign launched in 2001 to improve the protection of bank cards (“Target quick facts,” 2016).
Target began issuing chip cards that were more resistant to copying than traditional cards with a magnetic stripe. The key mistake of the well-known retailer after the theft of data was, perhaps, a delay in the public recognition of the problem. Several days passed since the discovery of the data leak when the company’s representatives had announced it. The delay in communication with customers was not in favor of the corporation. Target tried to claim some attempts to establish contact with clients, which just exacerbated its situation.
Attempts to Change the Situation
While the top managers of the corporation with a detective company that was hired for this purpose tried to find criminals, they managed to use all the information that they had stolen. According to McGrath (2014), the retailer could not estimate the total amount of the company’s losses. In spite of his public apology, Target’s former director lost his post. The high activity of the new head of the company Brian C. Cornell, who spoke about the tools for securing client accounts, helped to avoid an even greater negative impact on the company’s reputation.
Despite the fact that the leaders of the corporation tried to create collaborative and successful teams, their attempts, as it is known, did not lead to success. The managers of the company sought to obtain full control over the information they had about their clients. Attempts to create a secure database were unsuccessful. It indicates that the leadership did not pay enough attention to ensure data protection. Consequently, this practice can be considered wrong and, possibly, too risky.
The share of customers who are dissatisfied with Target’s activities has grown to a large extent (“Target. Annual report,” 2015). Furthermore, it is quite evident that the company is unlikely to achieve the success that it demonstrated during the last few years. Its popularity among buyers has significantly decreased; besides, the losses suffered by Target are large. Therefore, the business strategy chosen by the leaders was fundamentally wrong.
Perhaps, the higher activity of the corporation in communications and the rapid neutralization of the negative consequences of the incident would have influenced the situation more positively. There had been a chance to avoid significant deterioration in financial performance and a negative impact on the reputation that the company still feels. Nevertheless, no proper measures were taken, and Target’s breach today is considered one of the most scandalous events in sales for the last dozens of years.
Krebs, B. (2014). Email attack on vendor set up breach at Target. Web.
McGrath, M. (2014). Target data breach spilled info on as many as 70 million customers. Web.
Lunden, I. (2015). Target says credit card data breach cost it $162 M in 2013-14. Web.
Target. Annual report. (2015). Web.
Target Corp (TGT). (2016). Web.
Target quick facts. (2016). Web.