332792780-Target.pdf - Target Corporation Ackman versus the...

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Target Corporation:Ackman versus theBoardFM2 Case Study Analysis
The Case in BriefTarget Corporation is an American retailing company, founded by George Dayton, a bankerand a real estate developer in 1902 and headquartered in Minneapolis, Minnesota. It is thesecond-largest discount retailer in the United States, Walmart being the largest. The companyis ranked among the Fortune 500 companies. Its bulls-eye trademark has created an appealamong it’s customers. The first Target store was opened in 1902 in Roseville, Minnesota.Target grew and eventually became the largest division of Dayton Hudson Corporation,culminating in the company being renamed as Target Corporation in August 2000. After 15 years of great performance, Target's faltering performance during an economicdownturn led an activist shareholder to initiate a proxy fight. Target Corporation hadcompeted successfully against industry leader Walmart for years by promoting an upscalediscount shopping experience in comparison to Walmart's focus on low prices. This strategyworked well for Target in good economic times. The economic crisis of 2008-2009, however,caused shoppers to slowly shift from Target in favour of Walmart. In the spring of 2009, oneof Target's largest shareholders initiated a proxy fight to place his five director nominees onthe board. Target won the proxy fight, but still faced questions about whether it had a strategythat could work in both good times and bad.The case describes Target's business strategy and challenges to the strategy by an activistinvestor Bill Ackman who demands changes to Target's board to help implement the strategic

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