Target Corporation By: Jackie Cornwell & Haley Babare Content I. Company Profile II. P.E.S.T. Analysis III. Five Forces Model IV. Value Chain Analysis V. V.R.I.O. Testing VI. Competitors VII. S.W.O.T. Analysis VIII. Financial Analysis IX. Possible Strategies Company Profile • Robert J. Ulrich, Chief Executive Officer • Second-largest general merchandise discount chain • Operates over 1,502 stores in 47 states nationwide, as well as more than 181 SuperTarget store • Mission statement: “To be the best, in every area of our business, in everything we do.” P.E.S.T. Analysis • Political Factors • Social Factors - Changes in overtime - Diversity regulations - Changing - Fair Share Healthcare Bill demographics • Economic Factors • Technological Factors - Increased oil prices, war, - Internet natural disaster - Target Visa - Target Technology Services India (TTSI). Five Forces Model • Threat of New Entrants: Low •High Barriers to Entry •Economies of Scale •Capital Requirements • Bargaining Power of Suppliers: Low •Low Switching Costs •Competitive Industry • Bargaining Power of Buyers: High •Low Switching Costs •Buyers Create Demand Five Forces Model Cont.’d • Threat of Substitute Products: High • Rivalry among Competition: High •Competition: Numerous Stores Competitors • Wal-Mart - Largest retail chain in the world - Mission: “Always low-prices!” • Costco - Largest wholesale club operator in the U.S. - “To continually provide members with quality goods and services at the lowest prices possible.” • K-Mart - #3 discount retailer in the U.S. - “To become the discount store of choice for middle-income families with children by satisfying their routine and seasonal shopping needs.” Competitors Direct Competitor Comparison TGT COST Kmart WMT Industry Market Cap: 45.63B 28.85B N/A 184.98B 2.02B Employees: 352,000 70,000 133,000 1,900,000 12.70K Revenue: 61.94B 64.40B 18.65B2 370.45B 4.18B Gross Margin: 32.85% 12.35% N/A 24.21% 32.52% Net Income: 2.96B 1.08B 1.11B 12.73B 80.12M Value Chain Analysis • Inbound Logistics • Technology • Operations •Website • Outbound Logistics •TTSI •Supply Chain • HR Management •For your Health • Marketing & Sales •For your Time •Advertising •For your Growth •Brand Image •For your Future •Slogan •Big Rewards •Logo “Expect More, Pay Less” V.R.I.O. Testing • Valuable Capabilities: • Rarity of Competencies: YES YES •Positioning in Malls •Sustainable Growth •Human Capital •Guest Service • Costly to Imitate: YES •Clean Stores •Brand Image •In-stock Merchandise •Speedy Checkout • Non-substitutability: NO S.W.O.T. Analysis • Opportunities • Strengths -Generic drugs market -Brand image -Photofinishing market -Balanced brand mix -Operating cash flow -Private-label products • Weaknesses • Threats -Competition -Quality control -Not going global -Recent Litigations -Dependent on U.S. market -U.S. housing market -Changes in U.S. economy Financial Analysis Economic Value Added 30,000.00 2004 20,000.00 2005 EVA 2006 10,000.00 0.00 Fiscal Year Fiscal Year Earnings Growth Rate Last 5 Years 2008 2009 Next 5 Years Target 15.00% 8.40% 13.10% 14.10% Retail Industry 4.70% 3.50% 18.30% 12.30% S&P 500 12.90% 7.20% 7.40% NA Potential Strategies •Global Expansion •Change of Supply Chain •Preservation of Brand Image Thank You! Questions?
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