Strategic Management Case Study on Target

¶ … Strategic Management Case Study on Target

According to the company's profile provided by Reuter's, the Target Corporation ("Target") operates Target-brand general merchandise discount stores and an online business, Target.com (found to be slow by this researcher). The profile reports that as of November 11, 2004, Target operated 1,313 stores in 47 states; in addition, the Company maintains 22 distribution centers in 19 states. Times have been tough for Target, and the company's discontinued operations include Mervyn's (a middle-market promotional department store located in 14 states in the West, South and Midwest sold in September 2004), and Marshall Field's (a traditional department store located in eight states in the upper Midwest sold in July 2004) (Target 2005).

Statement of the Problem. The sales of Mervyn's and Marshall Field's are symptomatic of the competition that has become increasingly fierce among the major retailers in the United States; today, just five retailers, Wal-Mart, Kmart, Target, Costco, and Sears, account for fully 60% of general-merchandise sales in America, with Wal-Mart dominating the industry in virtually every category of sales (Johnson 2002:40). According to this author, "More than half of the productivity acceleration in the retailing of general merchandise can be explained by only two syllables: Wal-Mart. In 1987, Wal-Mart had a market share of just 9% but was 40% more productive than its competitors as measured by real sales per employee" (Johnson 41). As a result, Target is faced with some difficult decisions as it seeks to overcome the Wal-Mart juggernaut, while maintaining its existing market share among its other competitors as well.

Purpose of Study. The purpose of this study is to identify what strategic management decisions have been made by the management team at Target that have either contributed to or detracted from the company's profitability, and compare these successes and failures to those experienced by others in the industry, including Wal-Mart, but other major retailers as well.