Target Case Competition
KATIE HOLDEN, ALLIE HUNSBERGER, RYAN REVIA, AND TIEN TRAN
Pre-SWOT Analysis
Strengths
• High quality of service
• Price matching
• Target REDcard
• Logo recognition
• Reliable workforce
Weaknesses
• Closing of Canada stores
• Limited locations
• Higher priced items than competitors
• Data breach
Opportunities
• International markets
• Expand grocery department
• Increase number of CityTarget and TargetExpress
locations
• Further development of Target mobile
applications
Threats
• Cheaper competitors
• US economy
• Increased development of multichannel retailing
by competitors
Opportunities
1. Further development of Target mobile applications
2. Expand grocery department
3. Increase number of CityTarget and TargetExpress locations
4. International markets
Acquisition
•Acquire the mobile application and website Grocery iQ, owned by
Coupons.com
•Features:
o Create grocery lists
o Organize items by isle
o View weekly ad
o Print, view, and share coupons
o Add loyalty card
o Save favorite purchases
The Future
•Integration of current programs:
o Cartwheel
o REDPerks
o Location finder of nearest Target
•Develop to incorporate:
o Nutritional information
o Pre-order for delivery or in-store pickup
Corporate Culture Implications
•Target believes in
oLeading today’s competitive retail market
oChallenging themselves to be more efficient and intelligent
oProviding guests with the best shopping experience
oThe innovation of new ideas and solutions
Customer Implications
•Target becomes the lone provider of Grocery iQ features
•Enhancement of the Target experience
o Expect More. Pay Less. brand promise
o Coupons, information, and service all in one place
o Added convenience
o New technologies
•Differentiation from the traditional shopping experience
o Pre-order for pickup/delivery
o Addition of nutritional information
Against the competition
Abilities through their
Mobile Application
Target
Walmart
Amazon
Coupons
Yes
Yes
No
Pre-order for Pick
up/Delivery
Yes
Beta Testing Pick Up
Delivery Only
Integrated Loyalty
Programs
Yes
No
No
List Creation
Yes
Yes
No
Tracks Purchased Items
Yes
Yes
Yes
Nutritional Information
for Food
Yes
Yes
No
New Implementations
•New employees dedicated to pre-packaging pickup/delivery orders
o Training employees to use the ordering program
•Creation of an in-store pick up counter as well as pick up drive thru
•Delivery teams at each Target
•New equipment
•Added inventory
Summary Financials
•Grocery iQ is valued at about $206.6M USD*
•Relevant costs have averaged $22.8M from 2012-2014*
•Revenues from digital promotion have increased 32% (2013-2014) and 49% (2012-2013)*
•Income from digital promotion has increased 17% (2013-2014) and 64% (2012-2013)*
*See Figure 1
Estimates
Benefits of the Acquisition
Target
Coupons.com
•Most popular shopping list app
•Coupons.com had 15 years of operating loss
•Increase grocery revenue
•Needed Working Capital for acquisitions and
product development
•Improvement of omnichannel presence
•Customer satisfaction
•Convenience for customers
•Contending with competition
•Increased publicity
•Relationship development with Target
Post-SWOT Analysis
Strengths
• High quality of service
• Price matching
• Target REDcard
• Logo recognition
• Reliable workforce
• Wide range of mobile applications
• Excellent grocery department
• Variety of goods and services
Weaknesses
• Closing of Canada stores
• Limited locations
• Higher priced items than competitors
• Data breach
Opportunities
• International markets
• Increase number of CityTarget and TargetExpress
locations
• Add pick up and delivery features to applications
Threats
• Cheaper competitors
• US economy
• Increased development of multichannel retailing
by competitors