Target Corporation Mohammed Aljunaibi Esther Kim Mo

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Target Corporation
Mohammed AljunaibiEsther KimMo BenjebreenBen
Stewart
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Agenda

• Executive summary
• Historical overview of firm
• Summary of Financials and Key Performance
  Indicators
•  Operational Milestones and Strategic Initiatives
  
• HR Perspective
• Why BPR?
• Elements of the "turn-around
• Previous business model components and changes
• Current business model components
• Impact of HR on achieving the business strategy
• Target vs. Wal-Mart
• Wrap up

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Executive summary

• Recession gt In 2009, Target sales plummet and
  performance drops
• BPR gt Target pursues initiatives with private
  labels, volume and price adjustments, and
  expanded healthy/organic grocery selection
• Result gt Target has bounced back, greatly
  increasing sales and brand performance

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Historical Overview

• 1903 George Dayton buys R.S. Goodfellow Company,
  a department store that leased his six-story
  building in Minneapolis
• 1950 Dayton purchases Portland-based Lipmans
• 1956 Dayton opens worlds first fully enclosed
  department store in Edina, Minnesota
• 1962 1st Target store opened (Roseville, MN),
  followed by 4 more that year in Minnesota  
• 1968 Target expands, establishing two new stores
  in St. Louis, MO
• 1969 Dayton merges with JL Hudson from Detroit
• 1995 Super Target introduced
• 2000 With continued success both Dayton-Hudson
  corp. becomes Target Corporations

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1,750 STORES
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Financial Overview

MA
All dollar amount in millions
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Financials
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Trading Tar-zhey
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Key Performance Indicators

• Target Corporation aims to become leader
• Acquiring new customers and retaining old ones.
• Customer order waiting time
• Inventory control and product availability
• Diversity

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Strategic Initiatives

• 1998 Expansion into e-commerce
• 2005 Target begins operation in India
• 2009 Private label branding
• 2010 Great Save Event
• 2011 Target announces international expansion
  intentions - Canada

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Operational Milestones

• 2000 Dayton-Hudson becomes Target Corporation
• 2001 1,000th store opened
• 2004 Target sells Mervyns and Marshall Fields
• 2005 Annual sales exceed 50 billion
• 2008 1st Target-owned food distribution center
  opens first stores open in Alaska

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HRs Role in Targets Current Business Strategy

• Integrated HR model, starting at the store level
  HR Managers are...
• Responsible for taking Leader on Duty shifts
• Accountable for reaching the stores financial
  goals
• Drive company performance by building a fast,
  fun, and friendly team
• Organizational culture
• Staffing
• Employee development
• Employee retention

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Four Core Values
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Why BPR?

• Differentiation
• Offer a unique and desirable CVP
• Eliminate alternatives
• Competitiveness
• Target only operates in US Market
• Wal-Mart is a fierce competitor

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BPR Turnaround

• TARGET

• WAL-MART

• 2008 slowing economy sees Targets sales fall
  dramatically
• 2009 Target raises their profits
• Chic in partnership with designers and
  musicians, Target re-brands their clothing line
  creating an exclusive brand
• Great value great clothes
• Pfresh expansion into grocery/ remodel stores
• upup private label brand launched in 2009
• Strategy change lower price, increase velocity
  sell in bulk (Great Save Event)
• Going global

• When Targets stock dropped more than 60 in the
  early stages of the recession, Wal-Mart's stock
  rose by over 50
• Recently rebranded their junior clothing line-
  Metro 7
• Also underwent a massive remodeling effort-
  Project Impact

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Former Profit Formula

• Medium-velocity product movement reliable
  supply chain progressive brand name
• gt rising profits
• Credit/debit red cards 5 rewards
• gt millions of new accounts (recurring users)
• Broad array of general merchandise expansion
  into other states in the US
• gt increased market coverage

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Former Customer Value PropositionExpect more.

• Trendy general merchandise, decent prices, minor
  grocery availability
• Clean, friendly shopping experience
• Social responsibility and community service
• Progressive alternative to Wal-Mart

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Key Processes Resources
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Current Profit formula

• Private label brands bulk goods progressive
  brand name high velocity
• gt high profit margins
• Credit/debit red cards 5 rewards
• gt millions of recurring customers
• Vast array of general merchandise global
  expansion (Canada and India)
• gt increased market coverage increased
  earnings growth

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Current Customer Value PropositionExpect more.
Pay Less.

• High-quality, trendy general merchandise at
  affordable prices
• Private label clothing and healthy, organic
  groceries
• Clean, spacious, guest friendly stores
• Social responsibility 5 of pre-tax profits go
  towards community initiatives and services

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Target vs. Wal-MartCharacter Characteristics

• Target differentiates itself from Wal-Mart by
  the...
• cleanliness of its stores
• friendly shopping environment and experience
• shorter checkout times
• morality of its business practices

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Target vs. Wal-MartStock Value (1997-2012)
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Conclusion

• 1995-2007 Golden Age
• Target is...
• BOOMING
• Size, brand, value
• Competitive edge

• 2012 Today
• Target is...
• RESURGENT
• 2nd largest retailer in the US (1,770 stores)
• Socially progressive, trendy, service oriented
• Awesome.

• 2008-09 Recession hits Target is...
• HIT HARD
• Sales, market share, stock price

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• 2009-10 BPR
• Target is...
• EVOLVING
• New Customer Value Propositions
• Expanded market reach

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References

• Johnson, M. W. (2010). Seizing the white space.
  Boston, MA Harvard Business School Publishing.
• Target history and milestones. (2012). Target
  corporation. Retrieved from http//sites.target.co
  m/site/en/company/page.jsp?contentIdWCMP04-031697
  
• Target corporation. (2004). Funding universe.
  Retrieved from http//www.fundinguniverse.com/comp
  any-histories/Target-Corporation-company-History.h
  tml
• Target corporation. (2012). Wikipedia.
  Retrieved from http//en.wikipedia.org/wiki/Target
  _Corporation1982.E2.80.932000_Nationwide_expansi
  on

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References (contd)

• Target 2010 Annual Report. Retrieved from
  http//sites.target.com/images/company/annual_repo
  rt_2010/documents/Target_AnnualReport_2010.pdf
• Target Corporation. Retrieved from
  http//www.thehistoryofcorporate.com/companies-by-
  industry/traderetail/target-corporation/
• Target Corporation. (2009, June 24). Retrieved
  from http//pressroom.target.com/pr/news/up-and-up
  -release.aspx
• Ramlall, S. J. (2006), Strategic HR management
  creates value at Target. J. Org. Exc., 25 5762.
  doi 10.1002/joe.20090
• Reh, F. J. Key Performance Indicators (KPI).
  Retrieved from http//management.about.com/cs/gene
  ralmanagement/a/keyperfindic.htm