Target vs. K-Mart
Development and Analysis of Two Mini Case Studies
April 21, 2013
BUSN412 – Business Policy
The purpose of this paper is to perform an analysis on Target and K-Mart. By doing this analysis we will find out what each company does well, where the failures are and what they can do to keep the company alive and profitable. We will begin by looking at Target as a whole and then identify a successful business strategy and show how that strategy has moved Target into one of the leaders of the industry. We will then look at K-Mart as a company and then move on to identifying a failed business strategy and show how that strategy is holding K-Mart back within the industry. We will than perform a cross-case analysis by comparing and contrasting the case studies on the points of parity and points of difference. This will entail us looking at a side-by-side comparison of a SWOT Analysis and Five Forces Analysis.
Case Study 1: Target
The first Target store opened in 1962 in the Minneapolis suburb of Roseville, Minn., with a focus on convenient shopping at competitive discount prices. Fast forward to 2013 where Target remains committed to providing a one-stop shopping experience for guests by delivering distinctive merchandise and outstanding value with its Expect More…Pay Less® brand promise. Target currently is the second largest general retailer in America behind Wal-Mart, with Target.com being ranked as one of the most-visited retail Web sites. Target currently has 1,784 stores in the United States and 24 stores in Canada. Target has over 16,000 team members that work together to act as the bridge between suppliers and stores – distributing products to over 1,700 Target stores from its 37 distribution centers. Worldwide, Target has more than 365,000 team members that work in their stores, distribution centers, at the online business at target.com and in the corporate headquarters. According to 2012 numbers, Target made $68.87B in total revenues for the year. Net earnings were $2.93B. When you look closely at how they accomplished this goal, we can break the sales mix. 25% of monies made was from the household essentials, 19% was from hairlines (electronics and such), apparel and accessories and food and pet supplies. Rounding out the other 18% of those earnings was the home furnishings and décor department. “Target’s mission is to make Target the preferred shopping destination in all channels by delivering outstanding value, continuous innovation and exceptional guest experiences by consistently fulfilling their expect more pay less brand promise” (Mission and Values). “Target believes that great design is fun, energetic, surprising and smart—and it should be accessible and affordable for everyone. When they talk about their dedication to good design, they don’t just mean how something looks, but also how it satisfies a need, how it simplifies your life, and how it makes you feel” (Mission and Values). Target, along with other companies, are constantly questioning whether their business strategy will aid them in having the best competitive advantage in the industry possible or the weakest. “There are a number of different competitive strategies that a business can use to gain their competitive advantage over competitors. In the case of Target, they have several strengths that are very evident. The most prominent of those is that the company has been very good at distinguishing itself from the competition through its competitive advantage. The bulk of Target's strengths lie in the areas of image, brand and style. Target has spared no expense when coming up with the catchy marketing tactics and advertising campaigns that have in essence, made it "cool" to shop at a discount store. Target's well-known brand, paired with its hip stores, has given the company an image that beats its major competitors hands-down in the area of style....
Please join StudyMode to read the full document