Leadership at Target Corporation has changed drastically in the last several years. The company went through a major financial crisis which ended up filing for bankruptcy and closing 124 stores in Canada, one of the most severe credit card data breaches in the United States, and a transition of a new chief executive officer.
In 2013, Target acquired 124 locations in Canada from a failing retailer called Zellers (Wahpa, 2015). Target began to experience major problems. The Zellers store locations were in awful locations, which was one of the reasons Zellers was failing. Target began to suffer from supply-chain problems that yielded empty shelves and high prices, and it added up to a downright disaster. According to Taylor & Ho (2013) Canadian shoppers were disappointed with prices above those it charges in the United States, and shoppers would rather go to Canadian Wal-Mart. Target began losing millions of dollars, CEO Gregg Steinhafe turned his attention away from Target Locations in the United States and focused his attention on the Target locations in Canada. A year after Target had begun operating in Canada they lost over one billion dollars (Taylor & Ho, 2013). In January of 2015, Target Canada was placed under bankruptcy protection, underscoring the severity of the mistake by one of the largest retailers in the
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United States (Austen & Tabuchi 2015). 26 months after Target opened in Canada, Brian Cornell took over as CEO and he decided it had Target already lost too much, and it was in the best interest of the company to close its 124 stores in Canada. In 2013, during the holiday shopping season, Target was attacked by cyber criminals that stole millions of customer’s personal information, including names, phone numbers as well as email addresses, mailing addresses, and credit and debit card information (D'Innocenzio & Chapman, 2014). On December, 15 2013 that data breach access point that the criminals used was closed (Data Breach FAQ, n.d.). The United States Department of Justice is calling this attack the second largest in United Sates history (McCoy, 2013). After the announcementreouncement3). .ian Cornell.ed before the data breach, during the data breach, and after the data brech. llioj dollars. of this data breach, Target was criticized for how they handled the situation. It has been reported that a credit card breach costs a finical institution anywhere from $90-$350 per account. If this estimate is accurate, the cost of Target’s 40 Million compromised cards could result in the costs of $3.6 billion to $12.2 billion (Hardy, 2014). Senior leadership within the company decided that something different needed to be done. Top leaders gave the Board of Directors an ultimatum; either the CEO Gregg Steinhafe leave immediately or many top leaders would (Ziobro & Ng, 2014). Shortly after Mr. Steinhafe resigned from Target. Under the leadership of CEO Gregg Steinhafe, the company shifted its focus to newly frugal shoppers.
Target moved away from introducing new products and selling products that made them unique. Target’s offerings became more commonplace, offering more items like food and other consumer staples. The once famous marketing strategy Target used to lure in customer looking to spend $20 on the basics and leaving with $100 in impulse purchases was put on hold. Target’s senior leadership team is strong. So strong they felt comfortable complaining about his predecessor to the board of directors, and issuing an ultimatum: Gregg Steinhafe leaves, or we
do. Target has a history of promoting from within. When Gregg Steinhafe resigned from his position as CEO experts thought Target would promote one of their own to the newly opened position. Many were surprised when they found an outsider to become the next chief executive officer, Brian Cornell. According to McGregor (2014) “when outsiders are picked, it's usually because the board wants two things: a fresh perspective at the top and someone unencumbered by the past who can make changes fast”. And surely, those are both in demand at Target, where Mr. Cornell will have to repair the retailer's image after a disastrous data security breach and improve sales with a revamped product mix and online experience. Target is struggling to gain back market share and customers after the data breach that damaged the retailer’s reputation with shoppers and cut into sales. New leadership at Target Corporation feels confident they will be able to regain customers and sales.
Target’s first foreign store investment was in Canada; American stores look to Canada as their first foreign investment because the differences between the two countries are relatively minor. Other stores that have expanded to Canada include Wal-Mart, and Sears, each of these companies proved to be prosperous in Canada. Canada is one of the wealthiest countries in the world and is dominated by the service industry, Wawa would have no trouble fitting into the culture Canada has and dominating the market as they do here, in the United States. After reading about Canada and Wawa, we have realized this move could only benefit Wawa and help their reputation and build their company.
As compared to its rivals, Target has presented its brand as a middle-class brand which assists in attracting customers that find other stores like Walmart unpleasant
According to Kantar Retail, most of Target’s shoppers are younger on average than its rivals, and more educated. That means it has to consistently offer something different and appealing; it emphasizes more on the latest-trend apparel, eye-catching home décor and exclusive designer merchandise than its competitors. This results in a willingness to pay a bit more for items by customers who are willing to pay a bit more. Moreover, this successful
Target stores, inc.is a sister company of Dayton Hudson Corporation and started in the year 1962 the same year as two other large retail stores Wal-mart and Kmart. Target has always operated with the motto “ Expect More and Pay Less” target is the third in the big three in U.S. falling behind Wal-Mart and Kmart.a major part of target's success comes from its ability to bundle bargain prices with fashionable name brand merchandise with excellent customer service. Dayton’s department store started looking into Target as a discount chain in the year of 1962 when the company saw a rising in public demand for lower priced merchandise in a family friendly and convenient environment. The name target along with the bulls eye logo were selected for the company's visual impact also to show that target aims at offering
Target, a high-end discount department store, hoped to continue expanding and adding to the company’s 1,752 stores, by purchasing 200 Zellers stores, located in Canada. One of Target’s, longtime goals was to expand into Canada , and after a decade, the company took a jump across the border (Shaw, 2011). Because many thousand Canadians hold a Red Card, Target’s reward card, Target assumed this would be a successful expansion, increasing the amount of US brands that encompass Canada’s market. Target spent a year converting the Zeller stores, altering and renovating them to transform them into Target Canada, a subsidiary of Target (Shaw, 2011). They opened 124 stores in locations all over Canada, hiring back only one percent of the former Zellers employees, desiring to make a fresh start for the department store chain (Target Refused Zellers Workers).
In order for Target to have been successful, first and foremost, the retailer should have known that they would not be able to beat their competitor, Walmart, in a price war. That alone, is a losing battle. So, a higher quality of products, fewer locations, and a better understanding of Canadian tastes could have propelled the retailer into establishing, for the long term, a profitable global presence with our Canadian neighbors.
Target has seen consistent growth since its inception, and has confidence that future growth will continue (see attached financial statements). In 2004, Target sold two of there business units, Mervyn's and Marshall Field's for approximately $4.9 billion. This allowed for extensive aggregate pretax cash that will be used for future store sites (as well as upper management bonuses). Target's Board also approved a $3 billion share repurchase program which they expect to complete in two to three years.
Target Corporation's strategic structure plans are continuing staffing the organization and assemble a well-talented management team. Also, continue recruiting and retaining employees with the needed experience. Another option is to acquire, develop and strengthen resources and capabilities in performing critical value chain activities to match changing market conditions and customer expectations. Target Corporation needs to explore multidivisional or matrix organization structure to facilitate strategy execution, delegate authority, and managing external relationships (Thompson, Peteraf, Gamble and Strickland, 2016).
Target Corporation pioneered value chain activities like focusing on customer experience through superior marketing, ability to attract global talent, sustain in and outbound supply logistics, develop supplies with a high-quality vendor and partners, a great customer service, extend return by 30 more days if purchased through Target brand store cards, and a skilled workforce supports its generic strategy of "Expect more Pay Less" improves competitive position that its rival cannot match. --
In December 2013, Target was attacked by a cyber-attack due to a data breach. Target is a widely known retailer that has millions of consumers flocking every day to the retailer to partake in the stores wonders. The Target Data Breach is now known as the largest data breach/attack surpassing the TJX data breach in 2007. “The second-biggest attack struck TJX Companies, the parent company of TJMaxx and Marshall’s, which said in 2007 that about 45 million credit cards and debit cards had been compromised.” (Timberg, Yang, & Tsukayama, 2013) The data breach occurred to Target was a strong swift kick to the guts to not only the retailer/corporation, but to employees and consumers. The December 2013 data breach, exposed Target in a way that many would not expect to see and happen to any major retailer/corporation.
According to Schafer (2013), Target Corporation desire is to improve Target Brand and be a better version of Target with an incremental products and services. Target Corporation acquisitions counter any threat from other rival online retailers and allow Target Corporation to cross promote between Target and the new entity strengthening its
The Target corporations in plans to grow converted retail stores to retail super stores. In 2004 Target added 65 new merchandise stores and eighteen new Target Superstores all across the United States.
1. The Discount Department Store. Target prefers to be called as the latter instead of just department store. Expect more, pay less. With this tagline, the customers expect to purchase more items and pay the least amount possible. Not like other retail industries like its competitor Kmart and Wal-Mart, Target maintains retail value in terms of product offerings. They are known in their designer’s items in clothes, exclusive beauty products, categorized and functional goods, and seasonal offerings. It also sells the greatest number of gift cards among its rival business.
Target has three primary retail divisions which consist of Mervyn’s, Marshall Field’s and the Target stores. The Target stores are currently the second ranked discount retailer in America behind Wal-Mart. Target has approximately 1,778 stores located across 47 states. The retailer distinguishes itself from competitors by selling higher end, fashionable products at discounted prices.
The purpose of this presentation is to provide a comparative analysis of business activities of two well-known representatives of the US retail industry, Target and Walmart. My research is focused on a business strategy of these largest and most experienced American merchandising companies; particularly, on their activities in Canada. Based on the data collected from the various sources, I would like to detect, analyze, and demonstrate the obvious causes that have lead to a catastrophic failure of Target in its unsuccessful attempt to win a Canadian market.