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Target                           Chihiro Yamaguchi                                      Kai-Jen Shih (David)              ...
AgendaInternal Analysis History and Performance Culture/Ethics AnalysisIndustry AnalysisSWOT/Trend AnalysisRecommendations
Question…Who shops at Target?Why do you shop at Target?    Low-price,                       Comfortable,   high-quality,  ...
History &Performance
History  1902                     2000Dayton Dry                Target  Goods                 Corporation              196...
Current Status2nd Largest Discount Department Store1,763 Stores3 BranchesExpanded Offerings: PFresh, Target Clinic
How Does Target Define Performance?                  Brand       CommunityMarket Player                Recognition     Giv...
Financial Performance                       Total Revenue (Millions)7000060000500004000030000                             ...
Financial Performance                         Yearly Total Net Income35003000250020001500                                 ...
Product Categories    Household           • Pharmacy, beauty, personal care                        • Toys, electronics, mu...
Service Category: REDcard Financial service: Debit/Credit card Target REDcard    Offers great discount    Free shipping ...
Competitive Space                           Apparel                        Ross, Kohl’s,  T                               ...
Culture/Ethics   Analysis
Employee Interview
MissionMission Statement:“Our mission is to make Target the preferred shopping destination for our guests by   delivering ...
ValuesCore Values:   Diversity    Teamwork   Community   Innovation    Service                                  these valu...
Organizational StructureDistribution Center:                              General                                         ...
Organizational CultureProcess-Oriented    Concern with getting things done with integrityEmployee-Oriented    Deeply conce...
Fulfilling Target’s ValuesCustomer SatisfactionAction Plans: Message + TrainingOrientation OverviewsModeled Top-DownWorkin...
DiversityTo promote diversity:  • Embrace team member differences       Individual and Community  • Foster a feedback cult...
Artifacts• Symbols• Language    Customers = Guests    Employees = Team Members• Heros• Rituals
Ethical ClimateEthical Criteria: Benevolence • Team Interest • Social Responsibility
Wellbeing Pillars Individual      Community      Social        Financial   Safety        Outreach    Celebrations       Tu...
Sustainability/Social Responsibility• Volunteer Events• Community Giving/Support    Commitment to Education    5% of Incom...
Here For Good    • Sustainable Living       • Energy Smart    • Smart Development       • Green roofs, Urban Stores    • S...
Partnerships      Partnership     Local     Authorities
Going GreenRecycleSave EnergyReduce WasteReduce Water UsageTransportation EfficienciesENERGY STAR CertificationsReduce Gre...
Trends to Watch  Social Consciousness       Longer Life Span  Green PracticesTarget is on track to staying ahead of these ...
IndustryAnalysis
Market Positioning AnalysisIndustry Classification = Discount Department Store
Market Share    Discount Department Store        Market Share, 2010 DollarGeneral                          2010           ...
Prospector, Analyzer, or Defender?Target = Analyzer  Stable, routine, and efficient in its product  market domains  Closel...
BCG MatrixDiscount Department Store Industry Slow growth industry Relatively high market share High sales
BCG Matrix                     Toys• Toy industry is  expected to  shrink• Target is among  the top 3 toy  retailers• Targ...
BCG Matrix                     ApparelFor 2009-2014, theestimated growth rate is 2%Target’s sales in 2009 were6.7B, repres...
BCG Matrix                 GroceryGrocery retailing is amature, saturatedmarket in the USTarget’s grocery salesin 2011 was...
BCG Matrix                PharmacyThe US pharmaceuticalindustry is expected togrow at a rate of 6.4%in the next 5 yearsThe...
5 Forces Analysis                    Threat of New Entrants                        Apparel: High                     Pharm...
Threat of New Entrants Threat of New Entrants     Apparel: High  Pharmacy: Moderate       Toys: High     Grocery: High  Ca...
Bargaining Power of SuppliersBargaining Power of Suppliers     Apparel: Moderate          Exclusive Brands       Pharmacy:...
Threat of SubstitutesDesigner/Used Clothing Music/Video Games   Grocery Delivery     Restaurants    Threat of Substitutes ...
Gaming Population                              Gaming Population vs. Actual Population                                 (Ag...
Bargaining Power of Customers Variety of Discount                       Bargaining Power   Stores is Large       of Custom...
Internal RivalryRivalry: High
Product Life Cycle                                         Gross Margin(%)    34.50    34.00    33.50    33.00    32.50   ...
Product Life Cycle  Has reached high domestic market share    Product prices in Target are beginning to    drop  Executing...
Product Life CycleLeap Frog Opportunities:PFresh, City Target, Target Canada                            Target
Factors to Watch ForMacroeconomic Conditions:                  Consumer    GDP           Confidence           CPI      Inc...
Current US Economy
US GDP Growth Rate
Consumer Confidence
Consumer Confidence
CPI: Food & Beverage
CPI: Apparel
Going Global: Competitor Sales300000250000200000                               Domestic150000                             ...
SWOT Analysis             Strengths                         Weaknesses• Superior Customer Service             • Geographic...
RecommendationsExpand business globallyContinue to establish exclusive brandsGrow/expand online marketIncrease grocery sel...
Thank you!
Questions?
Capstone Analysis: Target
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Capstone Analysis: Target

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Team analysis of the Target company, including internal and external analysis. Content prepared by group, powerpoint presentation done by myself.

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Capstone Analysis: Target

  1. 1. Target Chihiro Yamaguchi Kai-Jen Shih (David) Group 4 Diana Colgrove Yuxiao Li Linyu Chang/Users/dianacolgrove/Desktop/50.png
  2. 2. AgendaInternal Analysis History and Performance Culture/Ethics AnalysisIndustry AnalysisSWOT/Trend AnalysisRecommendations
  3. 3. Question…Who shops at Target?Why do you shop at Target? Low-price, Comfortable, high-quality, One-stop shop, fun, and safe well-designed large selection shopping merchandise environment
  4. 4. History &Performance
  5. 5. History 1902 2000Dayton Dry Target Goods Corporation 1962 2011 Target Target Discount Canada & store City Target
  6. 6. Current Status2nd Largest Discount Department Store1,763 Stores3 BranchesExpanded Offerings: PFresh, Target Clinic
  7. 7. How Does Target Define Performance? Brand CommunityMarket Player Recognition Giving Service Financial Performance Performance
  8. 8. Financial Performance Total Revenue (Millions)7000060000500004000030000 Total Revenue2000010000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
  9. 9. Financial Performance Yearly Total Net Income35003000250020001500 Total Net Income1000500 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
  10. 10. Product Categories Household • Pharmacy, beauty, personal care • Toys, electronics, music, movies, books, sporting Hardlines goods Apparel and • Apparel for women, men, boys, girls AccessoriesFood and Pet Supplies • Dry grocery, dairy, frozen food, beveragesHome Furnishings • Furniture, lighting, kitchenware, small and Décor appliances, home decor, bed and bath
  11. 11. Service Category: REDcard Financial service: Debit/Credit card Target REDcard Offers great discount Free shipping Donation to education Extra savings on prescriptions No annual fee
  12. 12. Competitive Space Apparel Ross, Kohl’s, T J MAXX, Marshall’s, Costco Toys Pharmacy ToysRus, Disney CVS, Costco, Rite Aid, Walgreens, Cli Target Store, Amazon, EBay , Learning nic Pharmacies Express , U.S. Toy Co., Inc., Barnes & Noble Inc. Grocery Costco, Ralphs, Al bertsons, Food 4 Less, Vons, Stater Bros
  13. 13. Culture/Ethics Analysis
  14. 14. Employee Interview
  15. 15. MissionMission Statement:“Our mission is to make Target the preferred shopping destination for our guests by delivering outstanding value, continuous innovation and an exceptional guest experience by consistently fulfilling our Expect More. Pay Less.® brand promise.”Major Commitment: Continuously Meet the cater to the guests’ needs guest experience
  16. 16. ValuesCore Values: Diversity Teamwork Community Innovation Service these values are ingrained in the culture Integrity = most important moral value Within the company, culture is transferred to all: Vendors, Part Times, Seasonals, Etc. Fifty” “Fast, Fun, and Friendly”
  17. 17. Organizational StructureDistribution Center: General Manager Senior Group Senior Group • One GM per building Leader Leader • SGL: Group Group Group Performance, Strategic Leader Leader Leader Planning • GL: 2-12+ Team Team Member Team Member Team Member Members, Monitor Performance and Team Team Team Member Member Member Development • Team Members Team Member ERA 1Structure transfers to all areas
  18. 18. Organizational CultureProcess-Oriented Concern with getting things done with integrityEmployee-Oriented Deeply concerned with the wellbeing of employeesProfessional Embrace diversity in the hiring processOpen System Welcoming to new employees, orientation persistenceLoose/Tight Control Improvisation welcomed, yet training programs enforcedPragmatic Orientation Driven by the market, desire to meet guests’ needs
  19. 19. Fulfilling Target’s ValuesCustomer SatisfactionAction Plans: Message + TrainingOrientation OverviewsModeled Top-DownWorking on a TeamNo Guesswork InvolvedGuest Service Departments
  20. 20. DiversityTo promote diversity: • Embrace team member differences Individual and Community • Foster a feedback culture Weekly meetings Upward Communication • Diversity Events Ex: Chinese New Year at Downtown Riverside Second Nature, Inclusive
  21. 21. Artifacts• Symbols• Language Customers = Guests Employees = Team Members• Heros• Rituals
  22. 22. Ethical ClimateEthical Criteria: Benevolence • Team Interest • Social Responsibility
  23. 23. Wellbeing Pillars Individual Community Social Financial Safety Outreach Celebrations TuitionHealthy Living Service Recognition Reimbursement Exercise Events Financial Planning
  24. 24. Sustainability/Social Responsibility• Volunteer Events• Community Giving/Support Commitment to Education 5% of Income Given Back• “Here For Good”
  25. 25. Here For Good • Sustainable Living • Energy Smart • Smart Development • Green roofs, Urban Stores • Sustainable Products • Traceable seafood, Packaging • Efficient Operations • LED lights, motion centers
  26. 26. Partnerships Partnership Local Authorities
  27. 27. Going GreenRecycleSave EnergyReduce WasteReduce Water UsageTransportation EfficienciesENERGY STAR CertificationsReduce Greenhouse Gas Emissions
  28. 28. Trends to Watch Social Consciousness Longer Life Span Green PracticesTarget is on track to staying ahead of these trends with theircommitment to individual and environmental sustainability
  29. 29. IndustryAnalysis
  30. 30. Market Positioning AnalysisIndustry Classification = Discount Department Store
  31. 31. Market Share Discount Department Store Market Share, 2010 DollarGeneral 2010 Sales (in billions) 3% Others Walmart 258Kmart 14% 3% Target 67 Costco Walmart Costco 60 12% 54% Kmart 16 Target 14% Dollar General 13 Others 66
  32. 32. Prospector, Analyzer, or Defender?Target = Analyzer Stable, routine, and efficient in its product market domains Closely watches competitors and rapidly adopts promising new ideas
  33. 33. BCG MatrixDiscount Department Store Industry Slow growth industry Relatively high market share High sales
  34. 34. BCG Matrix Toys• Toy industry is expected to shrink• Target is among the top 3 toy retailers• Target is in a leading position in this segment
  35. 35. BCG Matrix ApparelFor 2009-2014, theestimated growth rate is 2%Target’s sales in 2009 were6.7B, representing a 4%market shareTarget’s market share in theindustry is notdominant, but the market isfragmented
  36. 36. BCG Matrix GroceryGrocery retailing is amature, saturatedmarket in the USTarget’s grocery salesin 2011 was13.27B, representinga 1.6% market share
  37. 37. BCG Matrix PharmacyThe US pharmaceuticalindustry is expected togrow at a rate of 6.4%in the next 5 yearsThe industry growingfast but Target’s sharein this market is small.
  38. 38. 5 Forces Analysis Threat of New Entrants Apparel: High Pharmacy: Moderate Toys: High Grocery: High Bargaining Power Bargaining of Suppliers Power ofApparel: Moderate Customers Pharmacy: High Rivalry: High High Toys: Moderate Grocery: Low Threat of Substitutes Apparel: High Pharmacy: Low Toys: High Grocery: Moderate
  39. 39. Threat of New Entrants Threat of New Entrants Apparel: High Pharmacy: Moderate Toys: High Grocery: High CapitalMarket Share
  40. 40. Bargaining Power of SuppliersBargaining Power of Suppliers Apparel: Moderate Exclusive Brands Pharmacy: High Toys: Moderate Commodities Grocery: Low
  41. 41. Threat of SubstitutesDesigner/Used Clothing Music/Video Games Grocery Delivery Restaurants Threat of Substitutes Apparel: High Pharmacy: Low Toys: High Grocery: Moderate
  42. 42. Gaming Population Gaming Population vs. Actual Population (Ages 2-17) in the US in Millions 73 71 69 67 Gaming PopulationPopulation in Millions 65 (Ages 2-17) in the US (In Millions) 63 Population (Ages 2-17) 61 in the US (In Millions) 59 57 55 2009 2011
  43. 43. Bargaining Power of Customers Variety of Discount Bargaining Power Stores is Large of Customers HighLow Switching Costs
  44. 44. Internal RivalryRivalry: High
  45. 45. Product Life Cycle Gross Margin(%) 34.50 34.00 33.50 33.00 32.50 32.00 31.50 31.00 30.50 30.00 Report Date 02/03/2007 02/02/2008 01/31/2009 01/30/2010 01/29/2011 01/28/2012Total Revenues 59,490 63,367 64,948 65,357 67,390 69,865Net Earnings(Loss) 2,787 2,849 2,214 2,488 2,221 2,849
  46. 46. Product Life Cycle Has reached high domestic market share Product prices in Target are beginning to drop Executing differentiation strategy
  47. 47. Product Life CycleLeap Frog Opportunities:PFresh, City Target, Target Canada Target
  48. 48. Factors to Watch ForMacroeconomic Conditions: Consumer GDP Confidence CPI IncomeOther Factors: Online Retail Population Birth Sales Growth Growth Rates
  49. 49. Current US Economy
  50. 50. US GDP Growth Rate
  51. 51. Consumer Confidence
  52. 52. Consumer Confidence
  53. 53. CPI: Food & Beverage
  54. 54. CPI: Apparel
  55. 55. Going Global: Competitor Sales300000250000200000 Domestic150000 International100000 Target (in millions)50000 0 2009 2010 2011
  56. 56. SWOT Analysis Strengths Weaknesses• Superior Customer Service • Geographic• Positive Customer Perception• Strong Leadership Program/Training Concentration• Product Design – Low Price, Stylish • Not Low Price Leader• Exclusive Brands -> Brand Equity• Continuous Improvement• Strong Marketing Initiatives• One Stop Shop• Synergy Creation Opportunities Threats• Canadian Market • Severe Competition• Global Expansion• “Going Green” Trend • U.S. Economy• Growth of Pharmacy • Mature Industries• Vertical Integration
  57. 57. RecommendationsExpand business globallyContinue to establish exclusive brandsGrow/expand online marketIncrease grocery selectionVertical integration
  58. 58. Thank you!
  59. 59. Questions?

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