Value Proposition.
As a single millennial woman with no children, I enjoy being able to go to Zumba on Sunday mornings to dance the morning away and then spend an hour browsing around in Target to buy things that I do not need. Target is an American general merchandise retailer that operates in all 50 U.S. states and the District of Columbia. Target's headquarters are in Minneapolis, Minnesota. Target has operated in its hometown since it opened in 1962 under the Dayton Company. With being the 7th largest retailer in the United States, Target offers a wide variety of food and general merchandise. From clothing to household goods to electronics, Target customizes its assortment of goods of each of its stores to reflect its neighborhood and the local guests.
Target (2018) describes its purpose and value to its customers as "To help all families discover the joy of everyday life" (n.p). At the center of all of Target's decisions, is joy. It does not matter if you shop at a Target in your neighborhood or at a Target that is out of state, Target's purpose is to make sure that you feel a sense of fun, ease, and inspiration as you browse their stores to shop. I would agree that Target does do a great job of making sure that you feel a sense of ease and calmness when you browse their stores. The bright lights, interesting items, and music makes it very easy for anyone to get lost in there for hours at a time.
Profitability
According to MarketLine.com (2023), Target reported that its revenue for the end of the fiscal year in January 2023 was $109,120 million dollars. This was an increase of 2.9% from the previous fiscal year. As being the 7th largest retailer in the United States that provides groceries, household items, electronics, and much more, it is not a surprise that Target's revenue increased from the previous year. Although inflation is hitting us pretty hard right now, people use Target as a staple for their fresh produce, fruits, vegetables, and meat for their meal options. As of today, September 3rd, Target's common stock is $125.52. This is -$1.03 from when they opened at $127.55. Although Target's stock has declined slightly, Target continues to respond very well to rapid changing top line trends.
SWOT Analysis Strengths
Target's SWOT analysis strengths are multichannel sales, distributional network, and inventory turnover ration. Of the three strengths, I believe that the inventory turnover ratio strength is the best one to use to leverage for a new product or service being created. MarketLine (2023), explains that Target's "Inventory turnover improved in FY2023, which signifies that its inventory carrying costs remain low owing to fewer days for inventory turnover, enabling it to improve its operating performance" (p. 1). Target reported that their inventory ratio was a 6 during the FY2023. In comparison to their competitors like Dollar General and Kohl's, Target's ratio was high in comparison to their ratio of 4.2 and 3.6. A company that has a higher inventory turnover ratio than its competitors typically takes fewer days to clear their inventory. As MarketLine (2023) puts it, "With the given turnover ratio, the company takes 60 days to sell its inventory as compared to 86 days taken by Dollar General and 101 days taken by Kohl's" (p. 1). Understanding that Target's competitors take longer to sell its merchandise means that Target will have a greater chance of introducing a new product that can help them sell their products in a different way.
Product or Service Singularity
A new and unique product that would increase Target's development and increase it's product availability to its customers is the creation of an application that allows customers to purchase their groceries, household items, and many more through the use of the application on their Apple or Android smartphone. From working 9 a.m. to 5 p.m., and then going to the gym right after work, there are days when I do not have the availability to stop at the grocery store to purchase groceries for the week. Target's customers would need to purchase a membership that starts at $9.99 a month or $99.99 annually. Grocery delivery services like this are great because they alleviate the stress of having to deal with grocery stores during peak hours and it increases your chances of overspending because you intentionally purchasing items that you need versus being in the store and getting side tracked by new products.
New Product or Service Projections
Creating an application that allows customers to be able to access their groceries with the use of their phone would create increased profits as consumers would see the added benefit of less in-store grocery visits as an investment for their household. Meanwhile, Target would see this as an opportunity to create an additional streamline of income based on the membership fees and from groceries and household items being purchased from its customers as well. Target would still offer in-person grocery shopping, but the option to shop online for groceries will open up a whole new world for Target and even make them more accessible to its customers with certain disabilities in as well.
References
Target Corporation. (2018). Purpose and History. Target Corporate. https://corporate.target.com/about/purpose-history
Target Corporation: SWOT Analysis. (n.d.). Retrieved September 3, 2023, from https://advantage-marketline-com.ezproxy.snhu.edu/Company/Profile/target_corporation?swot
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