Target - Target Corporation 4Cast Table of Contents Retail...

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Target Corporation 4Cast
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Table of Contents Retail Industry & Business Model Compari son Capital-Expenditure Approval Process How to Determine the Discount Rate Evaluating Capital Projects Ranking Capital Projects
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Retail industry Intense Competition--tight margins Average: 3.10% Gross Profit Margin: 22.9% Net Profit Margin:3.6%
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Gross Profit Margin: 10.63% Net Profit Margin:2.0%
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Gross Profit Margin: 31.9% Net Profit Margin:4.6%
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Strategies Increase Sales Retailers tailored their product offerings, p ricing, and branding to specific customer seg ments. Reduce Operating Expense Ø Supply chain control Ø Inventory management Ø Low-cost distribution networks
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Target and its competitors Revenue $ 52.6 Billion $ 315.7 Billion $ 52.9 Billion Stores/warehouse s 1,397 6,141 433 Market Capitalization $ 50.1 Billion $ 199.9 Billion $ 24.1 Billion 2000-2005 Annual Growth Rate 12.1% 11.9% 10.4%
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Business Model “Expect more. Pay less.” “Save Money, Live Better .” “To continually provide our members with quality goods and services at the lowest possible prices.” •Appeal to style-conscious consumers by offering unique assortments of home and apparel items, while also pricing competitively with Wal-Mart on items common to both stores. ($70,000) •Gross Profit Margin: 31.9% •“Emphasizing the store decorations that give just the right shopping ambience.” •Promoting the brand awareness through larger advertising campaign & CREcards. •Provide low-price goods with fair quality. (below the national average) •Gross Profit Margin: 22.9% $75,000 Gross Profit Margin: 10.63% $1.0 billion 2.0% of sales 26.6% of operating profit 0.5% of sales 9.2% of operating profit Limit marketing and promotional expenses to new warehouse openings, occasional direct mail marketing to prospective new members and direct mail marketing programs to existing members promoting selected merchandise.
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Capital-Expenditure Approval Proce ss Sales growth comes from two main sources: Creation of new stores Organic growth through existing stores Variety of projects: remodeling, relocating, rebuilding, and closing an exist ing store to build a new store.
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This note was uploaded on 11/22/2011 for the course BUS 306 taught by Professor Anhnamsung during the Spring '11 term at Solano Community College.

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Target - Target Corporation 4Cast Table of Contents Retail...

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