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By: Leigh Blackmon, Justin Napier, Sara Ratliff, and Brian Roundtree
Executive Summary
The Firm
Upscale discount chain that offers trendy merchandise at affordable prices
The Industry
Dominant Firms Wal-Mart, Costco, K-Mart Keys to Success- Marketing, Promotion, Brand Loyalty, Differentiation
Mission Statement
At Target, our mission is to create a loyal customer base by selling a trendy, yet affordable range of merchandise. We are also interested in being socially responsible and do not define the success of our company simply by the bottom line. We are committed to the social, economic, and environmental welfare of all communities. Finally, it is our mission to encompass quality, style, and trend into all aspects of our corporation to ensure customer satisfaction.
External Environment
Economic
Customers amount of disposable income Customers propensity to spend
Social
Age of customers Beliefs of customers
Technological
Technological forecasting Giving customers the ability to shop from the comfort of their own home
Suppliers
No similar companies Ex. 1-Including purchase volume Ex. 2-Including differentiation of inputs
Buyers
Wal-Mart, K-Mart, and Costco Need more product differentiation Increase buyer volume Establish brand identity Providing quality and performance in each store
Threat of Entry
Difficult to establish large companies Hard to imitate brand identity Large capital requirements
Substitutes
None- Due to quality and fashion Results in customer loyalty Results in brand identity
Rivalry
Wal-Mart K-Mart Costco Differentiation is key factor= Fashion Push Targets brand identity
Company Profile
Primary Activities
Customer Service Marketing and Sales
Advertising, promotions, market research, planning
Operations
Production and Quality Assurance
Company Profile
Secondary Activities
Human Resources
Recruitment, hiring, training, and development
Technology
Conduct research New trends and interests
Company Profile
Strengths
Loyal customer base Readily available products Constantly produces new ideas and exclusive products
Company Profile
Weaknesses
Higher prices than Wal-Mart
Population response to the economy
Revenue
Revenue
2005 2004
Year
Wal-mart 2003 2002 2001 $0 $50 $100 $150 $200 $250 $300 Costco Target
Costco
2001: $0.6 billion
Wal-Mart
2001: $6.2 billion
Net Income
Net Income
2005 2004
Year
Profitability
5% 5% 4% 4% 3% 3% 2% 2% 1% 1% 0% 2001 2002 2003 Year 2004 2005 Target Costco Wal-mart
Profit Margin
Asset Turnover
9 8 7
Turnover
Firms Position
Based on more than just pricing Strive to encompass style, quality, and trend
Scenarios
Best Case: Wal-Mart going out of business and Target having a significant share of market Worst Case: Target going out of business Most Likely: Wal-Mart maintains market share and Targets profit margin, sales, and net income will continually increase
Strategic Choice
Differentiation
Higher quality, more trendy clothing, better style Drive-through Pharmacies Expansion into SuperTargets
Any Questions?