Team 1: Target

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Team 1 Target
Connie Bailey Lora Altizer Travis Skeens Daniel
Adkins
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Fast, Fun and Friendly.
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Fast Facts

• Target is the second largest retailer in the
  United States
• The median shopper is 46 with an average income
  of 55,000
• 80 of shoppers are women
• Leader in innovation
• Leader in technology

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The Beginning

• J.L. Hudsons Company established 1873
• Specialized in Mens clothing
• Innovative policies on return privileges and
  price marking

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The Beginning, Continued

• Daytons Dry Goods established 1903
• Offered liberal credit
• 1918 worth 1 million
• Changed name to Dayton Foundation
• 1946 initiated the policy to give back 5 of its
  annual profits
• 1962 opened the first Target store
• 1966 went public

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Dayton Hudson Corporation

• 1969 George Dayton merged with J.L. Hudson
• Formed a new corporation Dayton Hudson
  Corporation
• All stores renamed to Dayton-Hudson
• 1974 redesigned all Target stores
• Same layout, product placement
• 1 year later, Target was the number 1 revenue
  producer

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• The first Target store opened in 1962 in
  Roseville, Minnesota
• Introduced a new concept for retailing
  neighborhood discount shopping
• 1968 bulls eye logo redesigned
• So successful the parent company, Dayton Hudson
  Corporation, renamed itself to Target Corporation
  in 2000

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Target Expansion

• Mervyns
• Purchased in 1979
• Sold in 2004
• Marshall Fields
• Purchased in 1990
• Sold in 2004

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Expanding within

• SuperTarget
• Target Greatland

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Expanding

• target.direct
• Rivertown Trading Company
• Signals and Wireless catalogs
• Associated Merchandising Company

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External Factor Evaluation Matrix (EFE)

• Kmart Wal-Mart
  Target
• Opportunities Weight Rating Score
  Rating Score Rating Score
• Internet shopping .11 1
  .11 3 .33 2
  .22
• Pharmacy .11 2 .22
  4 .44 2 .22
• Financial Services-
• (credit cards) .11 3
  .33 3 .33 3
  .33
• Outdoor furniture .06 3
  .18 3 .18 2
  .12
• Specialty toys .05 3
  .15 4 .20 2
  .10
• Commercial Interiors .07 3
  .21 2 .14 4
  .28
• Globalization .11 3
  .33 4 .44 2
  .22
• Threats
• Decreased Customer
• Spending .08 2 .16
  3 .24 2 .16
• Increased Costs .08 1
  .08 4 .32 1
  .08
• Ecommerce .11 1 .11
  3 .33 2 .22
• Competition .11 1 .11
  4 .44 2 .22
• TOTAL 1.00 1.99
  3.39 2.17

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Internal Factor Evaluation Matrix (IFE)

• Kmart Wal-Mart
  Target
• Weaknesses Weight Rating Score
  Rating Score Rating Score
• Financial Challenges from
• Economy, operating
• environment discontinued
• operations .10 1 .10
  3 .30 2 .20
• Increased Economies of
• Scale .14 2 .28 4
  .56 2 .28
• Expansion Pace (growth
• Orientation) .14 3 .42
  4 .56 2 .28
• Competition .14 1 .14
  4 .56 3 .42
• Strengths
• Corporate citizenship .06 2 .12
  4 .24 4 .24
• Broad Market Base .14 3 .42
  4 .56 2 .28
• Reputation .14 1 .14 3
  .42 2 .28
• Product Diversity .14 3
  .42 4 .42 2 .28
• TOTAL 1.00
  2.04 3.62
  2.26

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Weaknesses

• Financial Challenges
• Increased Economies of Scale Costs
• Expansion Pace

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External Threats

• Competition
• -Domestic
• -Global
• Higher Prices

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Competitive Matrix
SCORE Category
Rating Kmart
Wal-Mart Target Advertising
0.20 3
3 4 Global expansion 0.20 3
4 2 Price Competitiveness 0.10 3
4 3 Financial Position 0.15
2 4 3 Product Quality 0.10
2 3 4 Customer Loyalty 0.10
2 3 3 Market Share 0.05 1
3 3 Management Practices 0.10
2 3 3

• The most critical success factor would be
  advertising with a weighted score of 0.20
• The next critical success factor is global
  expansion with a weighted score of 0.20
• Price competitiveness and financial position are
  ranked next on the competitive profile matrix
  with a weighted score of 0.10 and 0.15
• Product quality and customer loyalty is found on
  the competitive profile matrix to have a weighted
  score of 0.10 for each
• Last critical success factors are market share
  and management- each with a rating of 0.05 and
  0.10

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Liquidity Ratios

• Current Ratio 13,922/8,220 1.69
• Acid Test (13,922-5,384)/8,220 1.04
• Working Capital 13,922-8,220 5,702,000
• Cash Ratio (2,245885.60)/8,220 .38

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Leverage Ratios

• Debt Ratio 9,538/32,293 .29
• Debt-to-Equity 9,538/13,029 .73
• Long Term Debt to Equity 9,034/13,029 .69

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Activity Ratios

• Inventory Turnover 46,839/5,384 8.7
• Days Sales Outstanding 5,069/(46,839/360) 39
• Total Asset Turnover 46,539/32,293 1.45

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Profitability Ratios

• Gross Profit Margin (46,839-31,445)/46,839
  32.9
• Return on Assets 3,031/32,293 9.39
• Return on Equity 3,031/13,029 23.3
• Operating Profit Margin 3,601/46,839 7.7
• Net Profit Margin 4.47

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Outer Space and Matrix the Movie
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S.P.A.C.E. Matrix

• Financial Strengths (FS)
• Competitive Advantage (CA)
• Industry Strengths (IS)
• Environmental Stability (ES)

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S.P.A.C.E. Matrix Graph
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Start Something
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Existing Objectives and Strategies

• Innovative Design and Quality
• Creative advertising and Great Corp. Citizen
• Keep Leaders, Members, and Guests happy
• Global Expansion

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Strategy Recommendations

• Continue the unique advertising
• Continue to invest in RD for creating innovative
  products
• Continue to compete with Wal-Mart

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Summary and Conclusion

• Target is the Pepsi of Retail
• Best Mascot?
• In conclusion