Target Corporation Company Situation Analysis

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Table of Contents

Introduction
Situation Analysis
Recommendations

Introduction

The Target Corporation is a retailing company based in the United States of America. However, it is currently facing a financial crisis due to the losses it has been incurring over the last few years. To alleviate the situation, the company recently introduced a new chief executive officer, Brian Cornell, to guide the company towards reinvention. This essay provides a situation analysis for the Target Corporation by examining both the internal and external business environment trends.

Situation Analysis

The Target Corp operates in the retail discount industry through the provision of superior merchandise at competitive prices.

External Situation

Economic Situation

The US recession significantly affected the retailing company. During this period, customers were not willing to do impulse spending on non-essential goods. The case study reveals that the most indispensable commodities, such as foodstuffs, usually register big sales.

Consumer Trends

Customers visit the discount retailer store with the aim of purchasing goods according to their budgets. However, motivated customers surpass such budgets to make more purchases due to favorable discounts that are offered on the commodities.

Internal Situation

Financial situation

The corporation has been enjoying financial prowess before the recession. However, it has experienced enormous losses in the past few years. As a result, it altered its cheap chic marketing strategy that defined its uniqueness. However, this decision has resulted in a negative impact on its profitability. Other competitors, such as Wal-Mart, have outshone the company and seized a great proportion of the market.

Sometimes, the company runs out of stock. This situation has also affected its profits significantly. Adverse operating economic conditions, together with various management issues in the company, have led to a significant decline in its productivity.

Management and Culture

According to the case study, the company has always strived to maintain well-structured management and reputable culture that have been key drivers to its prowess. However, after encountering a recession, it was hardly possible to maintain the bureaucratic leadership style. However, the company does not take matters that pertain to management for granted.

Failure to perform can result in the dismissal of an employee. In addition, the company has developed a risk-averse management culture that focuses on its overall success. The company has also replaced its CEOs severally in an attempt to restore the company’s position in the retail industry.

Target Market and Customers

From the analysis, it is clear that Target Corp has lost its uniqueness after the recession that led to the abandonment of its unique cheap chic marketing strategy. Earlier, the approach had differentiated the company from other players in the industry. Nowadays, customers do not experience any exclusivity while shopping at the organization.

The company has lost a greater part of its market share to other competitors such as Wal-Mart. In addition, some of the loopholes in its marketing strategies, such as delayed delivery and cancellation of orders has shifted the focus of many customers to the competitor companies.

Product

The company’s sales fell significantly during the recession. This situation resulted from reduced purchases of nonessential merchandise. This situation compelled the company to concentrate on essential commodities. At this period, the company realized a remarkable increase in the sale of foodstuffs and pet supplies. Nonetheless, some of its bestselling commodities, such as apparel and housewares, experienced decreased sales. Nonetheless, its food strategy worked well.

Price

The company’s pricing decisions were made in accordance with its competitor’s prices. As a result, it lowered its online prices to increase its competitive advantage. Earlier, Target Corp was known for its cheap chic pricing strategy that attracted many shoppers. Furthermore, discounting techniques played a vital role in marketing.

Promotion

The Target Corp has been using several methods such as advertising to promote its products. However, advertising only leads to increased expenditure since it does not boost sales significantly. The company also promotes its products through discounting. This strategy sways the attention of most consumers to purchase its products. The introduction of credit cards has also boosted the sales of the company further since shoppers are awarded special discounts.

Distribution

The Target Corp has adopted various distribution techniques such as e-commerce. It has been making online sales through its website. Formerly, it used the Amazon.com platform to sell its products. However, the company pulled out from the platform after developing its own website. Nonetheless, its online selling strategy has encountered some major drawbacks.

Firstly, online sales are too low as compared to the transactions at physical stores. In addition, the company website recently crashed. This situation has led to delays and cancellation of customer orders, causing frustration and inconvenience. Lastly, a recent invasion of the company’s website by hackers has led to enormous losses.

SWOT Analysis

Table 1: SWOT Analysis

Strengths	Wide product portfolio Structured management
Weaknesses	Poor marketing strategies Financial strain Image problems
Opportunities	New markets Change of consumer habits and preferences
Threats	Strong competitors Harsh economic conditions New technologies (infringement of systems)

Recommendations

The Target Corp should employ mechanisms that match with modern marketplaces to attract more shoppers. Its former cheap chic strategy should be adopted to restore and maintain uniqueness in the industry. The company should also execute good promotion strategies to boost its sales.

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