Place of Target in the industry
In the modern business environment, Target Corporation became one of the largest retail companies in the United States. Furthermore, the company represents a compatible force in the industry of discount retail at a level of the global market.
At the moment, Target Corporation is also one of the most innovative companies in the industry. Discount retail deals with selling products and various types of product lines for the prices that are considerably lower than the average value. As a result, the companies involved in the industry of discount retail often use various means, including their product lines or retail price sales to lower their prices. One of the specifics of the industry is that the majority of discount retailers, including Target Corporation, operates and administers multiple types of goods, from food and beverages to electronics, clothing, and apparel.
For that reason, for the customers to be able to buy different products in one place, discount retailers introduce special offers, clearances, as well as they sometimes manufacture certain products themselves. Thus, Target sells a variety of different goods, including foods and beverages, clothing, shoes, and jewelry, products for home and office, furniture, electronics, toys, and products for children, pharmacy and outdoor equipment, gifts, etc. In this regard, Target is one of the companies with the widest range of products on offer. However, clothing and apparel are one of Target’s specializations, in which the company exceeds.
History, resources, and structure
Although Target Corporation is an international brand, the majority of its assets are located in the United States. Target was initially branded as Goodfellow Dry Goods and considered food and beverage retail to be the company’s priority. However, in 2000, it was eventually given its current name, which, in some ways, affected the changes of specialization.
In terms of the number and quality of its human and financial resources, the company is the second biggest retailer of its kind in the U.S. Its revenues over the last fiscal year were estimated at the level of 74520 million dollars, whereas the number of Target Corporation’s employees is 347000 (“Target” par. 17). Thus, it is important to point out that such figures indicated a firmly occupied position of Target in the discount retail market.
However, there was a significant change in the structure of the company in terms of its place in the global marketplace. The company used to run business in the United States, Australia, Canada, and other smaller markets. However, because of the introduction of e-commerce projects of various nature, the company decided to make changes to its regional structure.
Over recent years, the company had to restructure its international branches due to the demands of the market and growing competition. In particular, one of the notable changes that the company underwent in the recent years is that “Target’s new CEO Brian Cornell made several tough decisions last year, most notably the one to exit Canada to focus on the discount retailer’s floundering U.S. business” (“Target” par. 1).
Year Financial Overview
According to the Target (TGT) Income Statement, published at Yahoo Finance, the company’s financial performance changed considerably over the last five years. The following table is to represent the changes of the company’s performance in terms of revenues, profit, stock prices, percentage of profit margin and net revenue, growth rate related to year 2 value’s correspondence to year 1 value, the current ratio (correlation between assets and liabilities), and assets turnover (based on revenue and total assets).
Tab 1. Overview of the changes of Target Corporation’s financial performance during the years 2011-2015.
Although there were some tendencies of the company’s financial slowdown in 2014 (current ratio lowered to 0.91), the overall financial performance appears to be consistent with a reasonable percentage of annual growth throughout the given period.
Current Market Situation
Market Description
Target Corporation stands out in the market of clothing and apparel manufactured by discount retailers because it can find specific appeals to the different social groups who are interested in quite diverse types of products. Nevertheless, there is a growing competition in this segment of the discount retail industry as well. One of the newly developed trends for the product line is to introduce special plus-size fashion products that, at the moment, subject to an increasing appeal because more consumers are interested in such clothing (McCall par. 1).
Product Review
The product line of plus-size clothing developed by Target is branded under the name Ava & Viv. Its slogan statement is “Ava & Viv, made just for you: classic looks with a modern twist to flatter every kind of curve” (“Ava & Viv, Women’s Clothing Brands, Brand Shop” par.1). Overall, the product strategy, in the current situation, is an attempt to combine casual clothing that people can wear season after season with the specific details that would create a feeling of customized clothes. It was described as “a mix of professional and casual separates, coordinated sets, denim and jackets with prints and designs” (Kim par. 2). Given the fact that at the time, when the product line was designed and developed, there was more of an appeal for casual style, it was initially a successful branding strategy. Main features are:
- causal style;
- affordable price;
- wide range of basic clothes;
- light hints of customized design.
Competitive Review
However, it is also important to point out the fact that this segment of the market is growing tremendously fast, and there are many considerably worthy competitors for Target, such as J. C. Penney, Asos’ H&M’s and Mango’s product lines, Ashley Stewart, etc. Although for companies manufacturing solely clothing “Target may be an indirect rival, the discounter has designs on the same market, having last year launched its line for plus-size women, Ava & Viv” (Wahba par 5). Target has advantages in terms of price, channels, and logistics, but there are some challenges related to designs, brand name, and product presentation.
Channel & Logistics Review
Target has an advantage in distributing such products because basic and casual clothes are an important need of consumers. One of the appeals of such apparel is its affordable price. Thus, locating such clothes at a discount retailer store makes them more accessible. Therefore, the primary channel for distribution in Target stores.
Works Cited
Ava & Viv, Women’s Clothing Brands, Brand shop 2016. Web.
Kim, Eun. 2016. See Target’s New Plus-Size Collection in All Its Stylish Glory. Web.
McCall, Tyler. 2016. Target Is Overhauling Its Approach to Plus-Size With Ava & Viv. Web.
Target 2015. Web.
Target (TGT) Income Statement 2016. Web.
Wahba, Phil. 2016. J.C. Penney Has Tapped This ‘Project Runway’ Star to Launch Its Plus-Size Brand. Web.