Case 1 Target Corp. A Canadian Disaster.docx - Armando Zapata ID 0815165 BUS 750 Strategic Marketing Management Instructor Nicholas Mathew Case Study 1

Case 1 Target Corp. A Canadian Disaster.docx - Armando...

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Armando ZapataID# 0815165BUS 750: Strategic Marketing ManagementInstructor: Nicholas MathewCase Study 1 – Target Corporation: A Canadian DisasterFall 2 201911/05/2019
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Case 1 – Target Corporation: A Canadian DisasterTarget Corporation (TGT) is among the most recognized retailers in the United States thatmost consumers identify with without even saying or seeing the Target name. Anybody who has shopped at Target can tell that the experience of shopping at a Target store is nothing extraordinary, yet somehow has set the bar when it comes to shopping compared to similar discount stores. The company has set the bar for other retailers when it comes to creating an in-store experience that encourages you to spend more than you planned to and return sooner than expected. Like any company who goes through its ups-and-downs, Target has been doing quite wellever since the implementation of its new strategy back in the 2ndquarter of 2017 when its stock suffered its biggest-ever price drop. At the time, one of the reasons for the company’s poor stock performance was because the retail giant struggled to cope with the rapidly changing behavior ofconsumers. Another reason was Amazon. The company quickly devised a long-term business plan to turn things around, which included among other things investments around $1 billion in operating margins to ensure prices were competitive, revamp more than 100 stores, and the company also planned to invest more than $7 billion over the subsequent 3 years with plans to update more than 600 stores and open more than 100 small-format stores, and introduce more than 12 new brands over the next two years. Nowadays, the company’s stock has soared to a record $103 a share. Another instance in which the company suffered a major write-down in its Balance Sheet was in 2013 on the Canada business. In an attempt to expand its footprint overseas, Target’s play to enter the Canadian market failed due to several reasons. The company went in and tried to compete with Wal-Mart for market share, but a lot of miscalculations and hasty judgement brought a costly outcome for the perceived upscale retail giant. Among the major challenges that Target had to deal with, include:Location: In 2011, Target bought the store leases of the now defunct Canadian discount chain, Zellers, for almost $2 billion. The problem was that most Zeller stores were dumpy, poorly configured for Target’s big-box layout, and were in areas not frequented by the middle-class customers Target covets. Supply Chain: the problems with Target’s supply chain stemmed from opening 124 storesand 3 massive distribution centers across Canada. Target uses a computer-assisted ordering system that alerts the distribution centers when a store is low on a particular item. The expansion seemed problematic for the ordering system as it was unable to notify the distribution centers, leaving many stores without popular products, and the distribution centers packed with items.
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