Target current business, strategy and policy direction.
After two years of preparation, all of Zellers stores were closed in 2012 and early 2013 following
the acquisition of most Zellers locations by Target Canada in 2011 and in March 2013 Target
opened first 24 Canadian stores in the Toronto area. Target are experienced an unexpectedly
strong surge in sales as guests were eager to see newly opened Target store. The mix of sales in
home and apparel was even higher than expected, as guests shopped assortment of stylish
owned brands and national brands, responding to the outstanding value Target provide on both.
Now Target are beyond the grand opening surge in this first cycle of stores, they are encouraging
new Canadian guests to make Target a preferred destination for categories throughout the store,
including food, health, beauty, and household essentials, as these categories play a key role in
driving trip frequency over time. Target plans to open another 20 stores in Canada later in the
next quarter, on the way to operating 124 Canadian stores by the end of this year. This means
Target expect to open more stores in first year in Canada than Target opened in first 10 years in
the United States, an incredible accomplishment that has required unprecedented effort by teams
throughout the company.
Consider current initiatives and stakeholder reaction to current events, either negative or
positive.
Negative, The Wal-mart has 379 stores across Canada, posted strong sales of food, consumables
and home lines, health and wellness. Walmart Canada had prepared for Target's arrival in the
past year by significantly boosting its assortment of food and by renovating and adding multiple
stores, upping its store count by 13.8 per cent as Target took over 39 Zellers stores and boosting
overall square footage in the Canadian market by a whopping 10.6 per cent. Wal-mart Canada
has 209 grocery-inclusive supercentres and 170 of its standard discount stores, compared with
333 stores a year ago - 164 supercentres and 169 discount stores.
How do recent events or initiatives impact the company's reputation and employee
motivation?
“The simple fact is that Target did not buy the Zellers business and as such there was no transfer
of merchandise, systems or employees,” Target Canada spokesperson Lisa Gibson said. That
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means at least 27,300 people across Canada lost their jobs as a result of the transactions. Target
has already hired a number of former Zellers employees and is guaranteeing an interview to all
Zellers employees who apply for a position for the 2013 store opening cycle. “It’s selfishness. It’s
sad,” says Rankin, 50, a mother of one who works in Zeller. Target’s argument is logically sound.
From a legal point of view, absolutely correct. Do they have some additional ethical obligations? I
think that there was an opportunity here for Target to go above and beyond their legal
responsibility.
Perform your own current SWOT analysis from your perspective to better understand the
company and what is needed to move forward.
Strength: One thing that is great about Target is that they focus on design. They always have
designers come in to work on a product for Target alone. This just proves that there is a great
product here for a great price. These designs vary from home décor, to clothing to electronics. It's
all about beautiful design at target.
Weakness: They do not have as many stores as their competitor Wal-Mart. Even with Target's
great advertising, it makes it difficult for the consumers to shop here when there aren’t those
many around. Another weakness with target is that although their prices are low, they just aren't
as low as Wal-Mart's prices. AS a matter of fact, compared to Wal-Mart's prices, Target may even
seem expensive.
Opportunities: One great opportunity for target would be to start a club card kind of like what
grocery stores do. This way people would shop more to get more points on their cards and would
not worry so much about the high prices. This would take away from the fact that it is more
expensive than Wal-Mart.
Threats: There are a few competitors that could be a threat to Target. I think the number one is
Wal-Mart. Despite the fact that they are the number one retailer in the world, they also have very
low prices.
Examine each functional department including, finance, production, marketing and sales,
human resources and risk management.
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Finance : First quarter Canadian segment Profit and loss was dominated by startup expenses
related to the 100 additional stores Target is preparing to open later in the quarter. For the
quarter, Canadian segment operations drove $0.24 of dilution to our consolidated earnings per
share. Second quarter sales will ramp up meaningfully from the first quarter pace, yet startup
expenses will continue to dominate the profit and loss. As a result, for the quarter we anticipate
expenses from our Canadian operations, including interest expense measured outside the
segment, will create $0.16 of dilution to our earnings per share. Target continue to
expect Canadian dilution will come down further in the third quarter, and by the fourth quarter,
we expect our Canadian operations will be slightly accretive to our consolidated earnings. Longer
term, we continue to feel very good about the health of our business and the steps we are taking
to keep our business relevant over time. We continue to invest in our remodel program, loyalty
initiatives, technology, the integration of our store and digital experience, the new City Target
format, and our Canadian segment.
Production: In Canada, Target have been very pleased with the results from our partnership with
Roots Outfitters, an iconic Canadian brand that offers quality craftsmanship and comfortable
styling on a line of apparel for men, women, and kids. And, we’re very excited that Target
recently announced a fall partnership with Beaver Canoe, a member of the Roots Canada family,
to offer an exclusive collection of cabin chic apparel and home items in Canadian stores this fall.
Marketing: Target Corporation uses many different social media websites to reach their
shoppers. They use the social media websites for advertisements, promotions, sales, and even
contests. Some of these sites include Facebook, Twitter, and Linkedin. Target has also created
mobile apps for those guests who like to shop while on the go. Compared to a competitor, such as
Wal-Mart, Wal-Mart also uses social media websites to reach their shoppers although Target has
direct links to those websites from their webpage. The marketing priority in Target is the
customer. Target’s marketing plan is completely customer-focused. They analyze customer
driven data from sales to determine the marketing strategy. Target does use product placement
in their marketing strategy. They put new items they want to sell on the end of the isles and in
the front of the store to get more attention. In the future Target could try to focus on creating ads
more directed at men to get them in the stores since most regular shoppers at Target are women.
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They could also market themselves to younger generations to get younger shoppers in their
stores. A strategy they could use to get more shoppers in would be to send out flyers and
coupons to help reach outside the regular shoppers and gain new ones.
Sales: In Canadian segment, Target generated $86 million in sales from 24 stores that were open,
on average, a little more than half the quarter. The first quarter gross margin rate in Canada was
more than 38%, which is much stronger than our long-term expectations.
Human Resource: Mr. Anthony S. Fisher, Tony has been President of Canada at Target Corp. since
January 18, 2011. Mr. Fisher is responsible for building the team, He graduated from the
University of St. Thomas in St. Paul, Minn., with a bachelor’s degree in marketing management
and a minor in computer science. He is only 37 years old, just worry about does he abs ability to
do this job. It’s too young to be a president.
Risk Management: Risk Management in Target Canada Actually does not exist, right now.
Anthony S. Fisher tries to build their team, but during this time, Target Canada does not have
systemic organization yet, not like Target in U.S. has perfectly risk management for years. Target
Canada still has long way to go though, everything is Uncertainties. But it is proving.
What issues are these functional areas currently facing and what needs to be done to get
things on a positive footing.
If Target Canada does not effectively execute plan to expand retail stores , Target Canada
financial results could be adversely affected. Target ability to successfully open the expected
number of Canadian Target stores on schedule depends, in large measure, upon Target ability to
remodel existing assets, build our supply chain capabilities and technology systems and recruit,
hire and retain qualified team members. In addition, Target’s ability to offer the expected
assortment of merchandise in certain markets may be impacted by the availability of local
vendors of certain types of goods. The effective execution of Target Canadian retail store
expansion is also contingent on our ability to design new marketing programs that positively
differentiate Target U.S. from other retailers in Canada, and achieve market acceptance by
Canadian guests. If Target Canada do not effectively execute expansion plan, Target Canada
financial performance could be adversely affected.
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