Abstract
Target Corporation is considered as the leading retail industry in terms of image, brands, technology innovation and its capacity to develop and promote unique products that nurtures healthy living. The company’s efforts to create a brilliant campaign system and excellent customer service define the meaning of shopping convenience. Its commitment to support the community through socio-economic and humanitarian activities is what makes Target Corporation distinctive from its competitors. Its overall success is the result of hard work in obtaining effective response from its customers, team members, shareholders and the community. The success of its overall operation opens opportunities for diversity on resources and global leadership development for its team members. Despite of the company’s distinctive strengths, there are barriers and threats in maintaining its effective operation and competitiveness in the market that needs to be addressed. These barriers are issues relating to its workforce, production and manufacturing, and price competition in the market. Identifying these barriers will help Target in implementing corrective actions. Through strategic action plan, effective corporate decisions and finding the right resolutions on issues will be achieved. Notwithstanding these barriers, Target has all the confidence to continue growing and evolving through its continued enthusiastic service and community dedication.
Keywords: strategic action plan, competitiveness, retail
Target Corporation is an American retailing company founded in 1902 by George Dayton. It was originally called the Dayton Dry Goods Company and later the Dayton Hudson Corporation. Its headquarters is located in Minneapolis, Minnesota where the first Target store was opened in Roseville in 1962. It eventually grew to be the largest division of Dayton Hudson Corporation and was renamed Target Corporation in August, 2000. The company is famous for its bullseye logo. Next to Wal-mart, Target Corporation is the second largest retailer in the United States and ranked number 38 on the Fortune 500 list with total assets of $46.630 billion. Target offers a wide assortment of general merchandise selling products from national brand merchandise and its own exclusive brands. Majority of their merchandise is distributed through their network of distribution centers shipped by common carriers. Its U.S. credit card segments offers credit to qualified customers through Target Visa, Target Card and Target Debit Card.
Employees Skills and Competencies
Target Corporation offers a wide range of careers for highly skilled professionals and team members from top management level, administrative and clerical, sales and supervisory and down to technical and store operations. The company is proud of its action-oriented leaders who are capable of analyzing problems and decision making and have the aptitude for relationship building. Most of its workforce in the retail stores consists of young, talented and ambitious people who are ready to take the challenges for personal and professional growth. They are the individuals with different backgrounds, varied experiences and distinctive points of view. They embody the company’s image in showing its commitment to provide the guests with the best shopping experience in a fun, fast and friendly manner. To obtain professional growth, Target motivates team members to enhance their skills and prosper in their jobs by conducting position-based trainings, group learning and self-paced resources, certifications and professional development courses in the fields of communication, cultural awareness and 6Sigma methodologies. Its current and future leaders are provided with courses for effective business leadership through leadership development programs. The company focuses on coaching and mentoring team members for self awareness development and career growth. Target also offers recognition programs for team member’s excellent achievements and hard work. Team members are encouraged to connect and get involved in employee resource groups to meet new people and foster an inclusive culture which can contribute in their professional growth.
Employee Demographic
Target Corporation has 365,000 total numbers of employees as of October, 2012 that work as full-time, part-time and seasonal. During peak season, Thanksgiving to the end of December, employment levels increases to an estimate of 414,000 team members. The company’s diversity of employees who are referred to as “team members” share common interests and goals which includes African American, Asian American, Lesbian, Gay, Bisexual, Transgender and Ally, Hispanic, Military and Women. They work as a team and most them became wellness captains at their store, distribution centers and headquarters. They organize programs and activities that nurture healthy living, wholesome relationships, promising career, financial stability and community service. Target’s commitment to support and build strong relationships with the communities has also helped the career growth of its members.
Labor Relations
Target Corporation considers their team member relations to be good. In its efforts to retain adequate numbers of qualified team members, Target ensures that labor needs are being met by complying with federal state or local laws. The company has provided its employees with competitive wages, great benefits, flexible scheduling and great career opportunities. Despite of this, Target is still subject to labor organizing efforts such as collective bargaining, prevailing wage rates and other benefit costs. Many store employees are demanding higher wages and additional hours of work. They are complaining of earning too little to support their families and their few hours of work don’t qualify for the company’s health plan. So far, none of its team members are working under collective bargaining agreements. Target is focusing on building trust between the management and employees and is confident that a union is not necessary and will not succeed in their inclusive culture.
Turnover
Target’s turnover rate of employees varies in terms of locations and departments. Most of them are in entry-level or part- time position with high turnover rates. The general trend on retail job market relies on part-time workers which are only applicable to students and retired people that cannot be retained on extended period. Due to its seasonal nature of business, turnover rate is high during off season and low during peak season. People who need a stable and full- time job couldn’t afford to work at Target’s retail stores. In addition, some departments have extremely high turnover due to a very low pay scale and some have low turnovers due to a competitive pay.
Employee Feeling Toward the Company
In its aim to create a positive work atmosphere, Target provides full support and benefits for the team member’s well-being where programs, resources and benefit eligibility vary in the basis of location, average hours of work and tenure of service. Successful employees of Target have expressed their happiness and satisfaction at work. For them, Target is a great place to work where most of them are fulfilled and challenged. They value their work and enjoy their volunteer contribution in community service, local projects and organizations. They take pride in their teamwork and cooperation, they take actions and their voices are heard. They believe that at Target, they can make a difference. Regardless of these positive feedbacks, unresolved issues on numerous complaints of unfair treatment and harassment at work still exist.
Educational Demographic of Employees
Target gives value to its employee’s work experience and skills acquired in their advanced degree education. The company offers MBA and graduate degree internships to gain on-the-job experience, career development and leadership opportunities in the fields of Management, Advertising and Marketing, Business and Finance, Accounting, Information Technology, Engineering and Pharmacy. Target also regularly visits colleges and universities to conduct on-campus interviews, attend career fairs and student organizations.
Workforce Demographic
The business is entirely dependent on the large and growing workforce of the company. The training and retention of qualified team members is vital for effective operations, guest service levels and support functions. The company currently employs 365,000 people across the country which takes the largest operating cost of the company. In January, 2009, Target announced a reduction of its workforce at nine headquarters locations which eliminated 600 employees and 400 open positions. The company’s decision to reduce its workforce is due to economic uncertainties and to ensure that the company remains competitive in the market.
Technological Trends
Enhancing its technological innovation in retail business is a remarkable move in support for the company’s commitment to provide unique shopping solutions that are simple and accessible anytime and anywhere. This relevant innovation was made possible through Target Technology Services. Guests are now using computers, tablets, mobile phones and other devices to shop. Target launched a mobile coupon program where guests can redeem coupons through their mobile devices. Shopping experience extends beyond the stores through its multichannel initiatives such as the Target mobile apps and the newly designed Target.com site which provide features that allows guest to develop product reviews, interact with other guests and upload photos and videos. Through Facebook and Twitter, the company can connect with the guests and offer them the best deals available. It also provides a two-way dialogue to help the guests obtain the best Target experience.
SWOT Analysis
Strengths
Since retail business is highly competitive, Target competes by successfully creating a different style of shopping through a valuable proposition and attractive combination of price, merchandise assortment, convenience, customer service and marketing strategies. Target’s efficiency in operation is influenced in their commitment to deliver a delightful guest experience through innovative campaign ads, maintaining clean and bright stores and friendly team members. The company provides outstanding quality and great designs with their “Expect more, Pay less” brand. Great service is emphasized through fast, fun and friendly team members. It focuses on new ideas and exclusive products. Some examples are its Clear Rx and unique Gif Card designs made of biodegradable materials which made Target the leader in innovation and creativity. Target supports environmental awareness through the use of sustainable energy resources and promoting organic produce. Convenient shopping is designed to tailor every guest’s needs and wants offering exceptional values on all commodity categories. Target has a unique ad campaign that provides the convenience of online shopping through Target.com. Its “Weekly Ad” link is an excellent feature where users can access the sales advertisement of the week just by entering a zip code and selected items can be saved through a printable shopping list. Users can also renew prescription online through Target Pharmacy. Customer’s questions and queries are answered through the Help section provided with FAQs. Returning items can be processed online that also provides a product recall page. Target’s success of implementing an effective customer service has earned an enormous positive customer response. Target’s socio-economic and humanitarian programs are additional factors that motivate both regular and new clients in patronizing their products and services.
Weaknesses
Despite of Targets emphasis on its strengths, it also has its weaknesses. Unlike Wal-mart which is globally enjoying massive profits, Target has a limited scope of operations in terms of global market and revenue growth. Due to its separated divisions and extensive product coverage, Target lacks the capacity for careful management and focus in terms of price increase anticipation and market rivalry. The company also lacks strategic action between Human Resource division and labor relations where issues between the management and employees are still unresolved. These weaknesses could negatively affect its operations and hinder the company’s objective for competitive advantage.
Opportunities
With all its distinctive strengths, Target has all the opportunity to become the number one retail business in the country. New locations and attachment to trendy malls and determining the latest trends on products and services will create diversity in the market, attract more customers and produce revenue growth. The company’s creativity and innovation and continued support for environmental, social and humanitarian concerns are effective ways of gaining customer loyalty. Its initiative for diversification of resources will open new opportunities for e-business among global retailers and suppliers.
Threats
Strategic Action Plan
Target can maximize its strengths by utilizing its brilliant marketing strategies to further enhance their operations. Its unique campaign ads set them apart from their competitors. However, the company must not focus on its strengths alone but must take strategic actions to eliminate its weaknesses. Target must first prioritize its employee’s well-being by taking corrective action on its Human Resource and management policies and standards that can boost their morale as well as productivity and performance. Managers and the rest of the team members should transact business in accordance with the company’s code of ethics. Considering the stiff competition on prices, the company must make a move to focus on price trends and changes, matching their prices with competitors to leverage its revenue. To minimize markdowns, a careful and effective inventory planning for seasonal and apparel items is recommended. Target should expand its channels by venturing into global markets to keep up with its competitors such as Wal-mart. To overcome its threats in the areas of production and manufacturing, Target should carefully review its operating costs and expenses and make recommendations on how to integrate its divided operations to reduce inefficiency. The threat of imitation or being copied by its competitors can be eliminated by setting preventive measures and implementing strict standards and policies in terms of production and its operation. In its initiative to expand its market, Target should adapt to Canada’s marketing environment and should apply localization strategy to obtain success in the market. To take advantage of its opportunities, Target should continue to create products that are distinctive and should invest more on technology
innovation to remain competitive. To be able to survive and prosper in market competition, Target should engage in strategic planning to define its objectives and evaluate internal and external status. The company needs to create a strategy, implement strategic actions, track its progress and make necessary adjustments.
Advantages of Strategic Planning
Strategic planning is the method used in dealing with changes on competitors, technology and customer’s demands. The success of Target Corporation depends entirely on the implementation of its strategy. With strategic planning, the company can analyze the internal business culture and its influence on the company’s performance. Better decisions can be achieved when actions are based on the company’s vision and goal. Implementing this process can identify the company’s opportunities in light of its strengths and weaknesses and potential threats. It provides direction on where the company is going and how to get there. The process also provides awareness on the changes of business environment and its impact on the company’s performance where application of the needed change and resolution can be provided.
Impact of Strategic Planning
With strategic planning, growth of the company can be accelerated and enhanced and more realistic and attainable goals are set. The impact of strategic planning on competitive advantage can improve the company’s performance in terms of distinctive product development and excellent customer service. Target’s inclusive cultural integrity, work ethics and giving value to customers and shareholders can also influence the company’s overall performance. Increased energy and increased capacity is visible when conflicts and confusions are eliminated and people can focus on more important concerns. Effective leadership of its team members is another factor in enhancing the company’s performance. Improvement on customer satisfaction and competitive advantage is gained when a company focuses on doing what it does best. Core competencies can be created through the integration of technology and coordinating with the workforce skills with an objective to work together towards company’s growth an performance.
References:
Corporate Responsibility, (2013), Target. Com. Retrieved from
https://corporate.target.com/corporate-responsibility/
Greenhouse, S., Union Effort Turns Its Focus to Target (May 23, 2011). The New York Times. Retrieved from http://www.nytimes.com/2011/05/24/business/economy/24target.html?pagewanted=all&_r=0
Padavic, R., Seven Benefits of Strategic Planning. (February 16, 2012).
Strategic Marketing Services. Retrieved from
http://info.sms.uni.edu/blog/bid/124539/7-Benefits-of-Strategic-Planning
