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Solved Case Study of Target From Expect PDF

[DOCUMENT]: This document contains a case study analysis of Target Corporation. It discusses factors that have affected Target's performance in recent years, including increased competition from Walmart, changing customer priorities during economic downturns, and public criticism from activist shareholders. It analyzes Target's strategic shift to focusing on lower prices through its "Pay Less" slogan. While this addressed customer needs during the recession, the document argues Target should have balanced this with emphasizing value. It recommends strategies like loyalty programs and sustainable pricing of fashion products to appeal to customers in the future.

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Hussnan Raza
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179 views4 pages

Solved Case Study of Target From Expect PDF

[DOCUMENT]: This document contains a case study analysis of Target Corporation. It discusses factors that have affected Target's performance in recent years, including increased competition from Walmart, changing customer priorities during economic downturns, and public criticism from activist shareholders. It analyzes Target's strategic shift to focusing on lower prices through its "Pay Less" slogan. While this addressed customer needs during the recession, the document argues Target should have balanced this with emphasizing value. It recommends strategies like loyalty programs and sustainable pricing of fashion products to appeal to customers in the future.

Uploaded by

Hussnan Raza
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 4

10th September 2013

Company Case
Target: From “Expect more” to “Pay Less”

Mohammad Imad Shahid Khan

Roll No.: 27

Group 10. Section: A, 1st Semester

Bachelor of Business Management


(2013-2016)
Mohammad Imad Shahid Khan

Company Case
Target: From “Expect more” to “Pay Less”

Q.1: What microenvironmental factors have affected Target’s performance over the
past few years?
Over the past few years, following are the factors that have affected Target’s
performance:

1. Competitors: Walmart’s distinct strategy of providing products at a


very low price, resonated with consumers in the economic crisis of
2008. This led to Target’s decline in market share as Wal-Mart had a
huge microenvironment affect as a competitor as the low cost store.

2. Customers: As the recession hit, unemployment rose and people


started becoming more responsible with money, the consumer priority
changed from fashionable to budgeted purchase. Since Target was
known for style, fashionable in slightly higher price, in the end, they
hurt themselves. Target should have done a lot better of a job in
providing customer value and satisfaction than Walmart. Customers
would have stayed loyal if valued and satisfied.

3. Publics: Target had a falling out among its various stakeholders, with
the activist shareholder William Ackman, whose company lost 85% of
the $2 billion invested in Target. Ackman not only chided target for
being ineffectual in dealing with the abrupt economic downturn but
also accused the Target’s board of directors to be inexperienced and
so, went on to ask to control 5 of the board’s seats.

1
Mohammad Imad Shahid Khan

4. Operations: Target made two significant operational changes. Firstly


it brought up “mini grocery stories” which carried a narrow selection
of 90% of the food categories found in full-size grocery stores,
including fresh produce. This led to customer convenience, saving
their time and effort. Second, they surprised everyone by discarding
the bulls-eye, replacing it with big, colorful, upward pointing arrows
on a white background, with the new brand name, “up and up”. The
intention was to attract new customer and therefore get more of
market price, with their priced at 30% lower than the comparable
name brands.

Q.2: What macroenvironmental factors have affected Target’s performance during


that period?
Economic factor was the macroeconomical factor that affected Target’s
performance during that period. The economical condition over the last few years
since 2008 was rough as the economy was in recession and inflation was on rise.
With rise in Unemployment, people started to have a newfound sense of frugality
and monetary responsibility. This led Target to formulate its “Pay Less” strategy
and stress aggressively on it.

Q.3: By focusing on the “Pay Less” part of its slogan, has Target pursued the best
strategy? Why or why not?
Target has been doing things right since the beginning. They were the first to build
themselves on a very diversified and unique strategy and way of business. They set
themselves apart and succeeded as their slogan “Expect More. Pay Less.” took off
and had customers in love with their chic in products. As they reached a peak they
made one small mistake and that was stressing too much on “Expect More” only.
When the Recession hit, customers were low on funds and thought that shopping at
Target would be too much of a treat or fancy, and/or “More” expensive then what

2
Mohammad Imad Shahid Khan

they can afford. They chose the right strategy to use, but definitely the wrong time
to enforce it.

Q 4: What alternative strategy might Target might have followed in responding to


the first signs of declining revenues and profits?
As Target’s CEO Steinhafel conceded that the retail giant’s Value Proposition was
not as strong as that of its rival – Target could have made much effort in changing
the customer perception. Their motto “Expect More” “Pay Less” could be used
with the current strategy to let customers know that they deserve better and/or
higher quality clothes, appliances, and other products, which other stores do not
provide. Like adding, “You Deserve it” at the end of the current motto will have
people thinking and saying “Do I?” (Most people with a decent salary will always
believe they do and spend the money) This might make it possible to tap into a
completely new market segment.

Q 5: Given Target’s current situation, what recommendations would you make to


Steinhafel for his company’s future?
Most of the customers in a retail store’s target market love to save money no
matter what economic stage, I recommend that Target would give more coupons
out in newspapers and/or offer more discounts in store like a store membership
card. With the card, the customers apply for and are able to save money and
receive offers that non-cardholders are not able to receive. With these benefits, the
customers will feel more self-valued, greater worth, and satisfied. This in the end
will create loyal customers and will go on to bring in new customers. Moreover,
keeping in mind the fashionable concept with which the customers make Target
distinct than others, Steinhafel should keep up the designer products perhaps with
more sustainable pricing.

● Thank You ●
3

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