Target Case Study

Topics: Economics, Household income in the United States, Pricing Pages: 2 (582 words) Published: February 7, 2012
Company case:Target

1)Target’s economic factors shifted its image into detriment that has been doing very well for years. For a big company like target it’s difficult to switch gears according to the trend where its executives failed in recognizing the problems.

Consumers:The case indicates that Target did not carefully study consumer markets and adapt its markets accordingly.

Competitors:Walmart who has always been a good competitor for Target was selling their stuff at cheaper prices than Target. Even though Target’s stuff was better in quality compared to walmart, people preferred to gotowalmart instead of Target when the economic conditions started shifting.

There are other competitors beside walmart which affected Target’s shifting fortunes, but walmart has been the main cause.

2)The macroenvironmental factors that affected Target’s performance during the period are:

i)The main factor in the shifting dynamic between Target and Walmart was the change in economic conditions. Unemployment, sliding GDP growth and mortgage payments created an environment where most of the customers had less income. ii)Changing demographics relates directly to the economy. Household income also was dropping while the household expenses have been increasing. iii)The political activities also spotlighted the economic conditions during the time of shifting economy. For example, during 2008 and 2009 the news involving the banks, insurance companies, auto manufacturer’s bailouts made consumers feel that the times were tough. iv)The culture was also shifted to the one dominated by frugality. This has been evident among the masses whose household income was not adversely affected. People were prepared to face the tough situations ahead with all the attention being given to the rising unemployment and uncertain economic conditions.

3)Target’s strategy of “Pay less” part of its slogan has been a risky strategy because it was trying to sell its stuff at a...
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