Essay on "Strategic Business Management"

Essay 6 pages (2465 words) Sources: 6

[EXCERPT] . . . .

Strategic Management

Target: Strategic Management

Target, formerly known as Dayton Stores, launched the Target name; bull's eye logo and a new era in discount retailing through its trendy merchandise at affordable prices in 1962 (Target, 2010). Target now operates over 1,750 stores in 49 states and India, including 240 Super Target stores that include an upscale grocery section. In addition to the photo processing centers, pharmacies and food aisles found in almost every Target, Super Target stores include in-store bakery, deli, meat, and produce sections (Target, 2010). With the company ranking 28th in Fortune 500, its diversity in products, its innovation, and its reputation, the company's management needs to have a full understanding of the organization's strengths, weaknesses, opportunities, threats, and trends to make the necessary decisions to maintain the good reputation it has achieved, as well as stay in competition in the leading discount retailing industry.

Situation Defined

Target Corporation competes directly against other discount retailers, mainly Wal-Mart and Kmart. Since its founding, it has intended to differentiate its stores from its competitors by offering what it believes is more upscale, trend-forward merchandise at lower costs, rather than the traditional concept of focusing on low-priced goods. In October 2008, Target announced plans to fight the perception that its products are more expensive than those of other discount retailers. It planned to add perishables to its inventory, cut back on discretionary items, and spend three-quarters of its marketing budget on advertising that emphasizes value and includes actual prices of items featured in ads. Target also planned to slow its expansion from about 100 stores a year down to 70 stores a year. Additionally, practices that cause some concern include lack of a living wage policy and lack of labor unions. Unless Target moves to improve its wages and benefits, it is only a matter of time before it is seen as just another big-box retailer.

General Issues

Strengths

Target's strengths are very much aligned with its mission statement, which is "to make Target the preferred shopping destination for its guests by delivering outstanding value, continuous innovation and an exceptional guest experience by consistently fulfilling its Expect More Pay Less® brand promise" (Target, 2010, para. 1). The brand promise focuses on quality products, excellent service, and commitment to community giving and offering its guests great value. Target stores are designed to make it an easy and enjoyable shopping experience for its guests. They also acquired partnership with designers such as Rachel Ashwell, home decor designer, Sean Conway, designs lawn and garden furniture, Jean Paul Gaultier, a legendary Parisian clothes designer, Giada DeLaurentis has her own brand of cookware and many uprising designers who designs exclusively for Target stores. The company employs a diverse, culturally mixed workforce and many of them volunteers within the community.

Its commitment to the community is impressive. According to a Moyer (2005), he purports that Target ranked as the highest cash-giving company in America with 2.1% of its income given to philanthropic efforts. Additionally, the company donates five percent of its income, which totals more than three million dollars every week. The company is involved in many community outreach programs, it strives on being environmentally conscious by offering eco-friendly products and influence vendors and suppliers to encompass sustainable practices (Target, 2010). These commitments and practices have won the organization many awards and recognition, such as Business Week ranked Target among the "Most Innovative Companies" in 2008. Diversity Incorporated named Target one of its "25 Noteworthy Companies for Diversity." In 2009, Forbes ranked Target 41st on its list of "America's Most Reputable Companies." In 2009, Fortune Magazine ranked Target 19th of 363 companies on its list of the "World's Most Admired Companies" in 2009 (Target, 2010). Target Corporation is consistently ranked as one of the most philanthropic companies in the U.S. Furthermore, it ranked No.22 in Fortune Magazine's "World's Most Admired Companies" for 2010, largely in part to the donation efforts of the company as a whole.

Weaknesses

Unemployment rates are high, national income is low, rate of growth is on the move, and inflation is steadily on the rise. Consumers are fiscally responsible more these days to make a living, and passing up the big-ticket items. Economics are giving consumers less disposable income, while facilitating the need to purchase the best quality items for the lowest price. Lax quality control can lead to recalls, which is costly, and lead to bad press. The image Target presents to the public is "Expect More Pay Less" (Target, 2010); however, recalls are not presenting this image to the consumer. "Frequent product recalls are indicative of lax quality controls. They harm the company's brand image by reducing customer confidence" (House, 2008, p. 7).

Target is committed to locations being accessible to current and potential guests, yet it is not established in most rural areas. Focus is currently on establishing the urban areas, and rural areas are left behind. Shoppers do not want to drive into the city to pick a few items when there is a store right down the street. Expansion into rural areas would give Target a broader playing field. Consumers spend more money and money weekly shopping at the neighborhood store to pick up fewer items at a time, then they do when going to the store to buy a large bill of groceries. On a larger scale Target is not a global competitor, it is mainly in the U.S. market and has just expanded into India. This makes them dependent on the American market, whereas a company such as Wal-Mart can profit from international markets. For example, if the United States market is not profitable at the time but the market in China is booming, it can leverage the profit from one market to make up for the loss in another. Target is currently working toward expanding the market in India, which will lead to international markets opportunities. Current economic condition in the United States is creating more of a challenge for Target to become a global retailer.

Opportunities

While the economy is in a downward trend and many people are losing jobs or having to deal with pay cuts, Target has many opportunities to consider. Although the lack of consumer spending has not been what it nearly was just a few short years ago, there are still shoppers available. Typically, these shoppers are looking to get the most out of its dollar. Target can seize this opportunity by increasing the products with online shopping. This strategy will ensure that Target does not have to either lease real property or pay employees and operating costs. The second opportunity that Target could take advantage of is marketing the company internationally. While the United States is suffering in its economic crisis, some countries have been hit harder. This would make a perfect opportunity for Target to take advantage of the international market simply by leveraging its capital and going into foreign markets. Hence, this would allow Target to be poised perfectly when that country's markets and financial crisis is over. While the economy suffers, so does the workforce.

Unfortunately, many skilled and educated workers are losing their jobs and having to settle for less when it comes to wages. Target could recruit these workers and hire them on a part time or temporary basis. This would result in increased productivity and ultimately save money on training new employees with little or no work history. The last opportunity that Target should consider is buying land. Land prices have fallen considerably in the last few years in which this may be an excellent time for Target to purchase land and do one of two things: Either hold the land or build store fronts on the land. If Target buys the land, there will be a good chance that the land will increase in value, which would make Target a profit. The second option is to buy the land and then build on it, which would allow Target to construct new building at more than half of the price of what was being charged just a few years ago.

Threats

The retail industry can be quite unstable for many businesses, as people's tastes and financial status are constantly changing. The Target Corporation is a relatively stable company, which has been in business for many years. One of the major threats this organization faces during the course of its business is the United States economy. The Target team prides themselves on offering higher quality goods than its closest competitors. Of course, with the higher quality comes a higher price to the consumers. During tough economic times, consumers are forced to find ways to save money and cut back on its spending. Though the customer may prefer the higher quality goods, they may chose to go with the lower prices offered by other stores to save money. This in turn affects the profits of Target. Target cannot rely on foreign markets to keep up its profits as Target operates mainly in the United States.… READ MORE

How to Reference "Strategic Business Management" Essay in a Bibliography

Related Essays:

Strategic Business Management Research Paper

Strategic Business Management

Over the last few years, there has been a transformation occurring inside the bear industry. What is happening is consumer tastes have shifted away from purchasing beer… read more

Research Paper 3 pages (1115 words) Sources: 3 Topic: Business / Corporations / E-commerce

---

Strategic Business Plan Balanced Scorecard Business Plan

Strategic Business Plan Score-Card

Organizations are being formed with a major aim in mind which is to increase the company's surplus and mitigate the unnecessary expenses. The term organization means… read more

Business Plan 5 pages (1496 words) Sources: 3 Topic: Business / Corporations / E-commerce

---

Strategic Logistics Management Essay

Strategic Logistics Management at Walmart

Major clothing, home product and food retailers such as Walmart, Costco and Marks & Spencer are faced with some daunting challenges in their efforts to… read more

Essay 10 pages (3714 words) Sources: 10 Style: Harvard Topic: Business / Corporations / E-commerce

---

Successful Strategic Business Plan Business Plan

Successful strategic business planning: Core elements of a successful strategic plan

A strategic plan is a three to five-year plan that gives an organization a series of goals that can… read more

Business Plan 2 pages (656 words) Sources: 2 Topic: Management / Organizations

---

Business Management: Human Resource Issues and Practices Case Study

Business Management -- Human Resource Issues and Practices

Best Practices in Relation to the Concept of Best Fit for the Organization

In general, the concept of best practices is applicable… read more

Case Study 3 pages (1014 words) Sources: 1 Topic: Management / Organizations

---

View 100+ more related papers  >>