Target Corporation Advertising Target Corporation By Jackie Cornwell Haley Babare Content I

					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!




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