Article Review Target Corporation

TARGET CORPORATION 5

ArticleReview: Target Corporation

ArticleReview: Target Corporation

TargetCorporation isinvolvedin offeringeverydayessentials andfashionabledifferentiated merchandiseat discountedprices.TheCorporationoperatesin two mainsegments:Canadian andUnited States. TheCanadian segmentprovidesretailoperationsin Canada whiletheU.S segmentencompassesall thefirms’ retailoperationsplus digital sales.Through a networkof about 1801 storesin U.S andCanada targetssellsan assortmentof generalmerchandiseandfood.ItskeybrandsincludeWine Cue, up&amp up,Gilligan &amp O`Malley, Boots &amp Barkley, Embark andSpritz andArcher Farms (Target Corporation, 2014). Target Corporation (2014).Theveryfirststorewasopenedin Minnesota in 1962, launchinga neweraof affordable retailmerchandise.Todaythecorporationhasmorethan1800 storesin 49 states,240 of which are mega Targets that offeran upscale groceryshoppingexperience(Barwise&amp Meehan, 2004).This paper shall provide a review of Target Corporation to identifybusiness strategies, company performance (profit) and employeeturnover report.

StrategicManagement

Targetssuccessis peggedon two keystrategiesconductingtheaptkindof differentiation anddistinctivemarketingcommunications.Alignedwith its goalto fabricatea brandaround theTarget namebackedy thecompanysteadygrowth,thecorporation’svicechairman,explainedthatfirm has facedthree strategicchoicesto dealwith theincreasedcompetitionin theretailmarketin theUnited andCanada (Barwise&amp Meehan, 2004).Thethree choiceshavebeento specializeto be a low-cost producerandto differentiate.Evidentlythecorporation’sfuturegrowthfollowingthefirstchoicewould havebeenthwartedy giantssuchas Wal-Mart, which has beena low-costproducer.In thisline,Targethas opted to pursuethethirdoptionandchoseto reposition itself as a massmerchandiser of inexpensive,stylishgoods.In thisway,thecorporationhas beenableto avoiddirectcompetitionfrom Wal-Mart andsoughtto outperformitrivalsthoughkeydimensions suchas providinggoodshoppingenvironment,shorter waitingtimeto payandcleanlinessof stores(Barwise&amp Meehan, 2004).

HighTurnover RateIs Target’s MajorStaffing Problem

Oneof themostteething problemsfacingTarget todayis thehighemployeeturnover rate.In fact,theturnover rateis estimatedtobebetween 70 to 80 percent. Towson Target storemanagerLomax Shawn indicatedthateventhoughit’shard to statepreciselytherateof employeeturnover,Target is facinga majorproblemin retainingstaff(Barwise&amp Meehan, 2004).Thishas not auguredwellforthefirm since itisestimatedthatthecostof turningoverof $8 per hourjobis between &amp3,500 to $25,000 (Kukreja,2011). Targetpays$8.7 per hour,andthismeansitisfacingthebluntedgeof such a highemployeeturnover rate.

Inthefinancialyear2014, thecompanyhadabout366,000 employees(full-time, part-time andseasonal)commonlyreferredto as teammembers(Barwise&amp Meehan, 2004).Thefirm providesa broadrangeof benefitsto theteammembersdepending on thestatusof theteammember.Thefirm has a pensionplan,dental andmedicalplans,disabilityinsurance,tuitionreimbursement,lifeinsuranceandmerchandisediscounts,retiree medicalplan,paidvacation,anda widerangeof teammember’sassistanceprograms(Barwise&amp Meehan, 2004).

Behindthefaçadeof Target corporate responsibilitylaysan anti-union rhetoricthat frightensits teammembersawayfrom third partrepresentation.In spiteof thefactthatthefirm regardsitself as a responsibleemployer,manyteammembershavemaintainedthatTarget doesnot allowan employeeto joinunions(Kukreja,201).

FundamentalsforthePreviousYear

Inthefiscalyearending2014 theseweretheessentialfundamentals of Target corporationsrevenuewas$72,6, P/E ratiowas20.2x, earningper sharewas$3,81, a returnon equityof 16.20% anda profitmarginof 3.37% (TargetCorporation, 2014).Thiswasan improvementfrom financialfundamentals of thepreviousyear.In2013 earningsper sharewas$3.07 andsaleswere$72,596 million,which wasalsoan increaseof 0.9 from thepreviousyear.In thelastquarterofthefinancialyear2014, Target indicatedthatits profithadrisenby 3.1 % whileearningper sharewas$1.50 beatingtheprojectedestimatesof $1.46 (TargetCorporation, 2014). Saleshadincreasedby 3.8% whilerevenuestoodat $21.75 billion which wasa 4% jumpfrom thesameperiodthepreviousyear.

WhileIwould investin thefirm becauseof thehighEPS and fair return of equity, I would loathto workin thecorporationdue to theanti-union rhetoric,laborviolationandpoorworkingconditionsforaverageworkersin storesandabroad.

References

Barwise,P &amp Meehan, S. (2004). Bullseye:Target`s Cheap Chic Strategy.Havard Business School Press. Retrieved on 1, 2015 from:http://hbswk.hbs.edu/archive/4319.html

TargetCorporation (2014). TargetCorporation Annual Report.Minneapolis, Minnesota

Kukreja,P.(2011).EmployeeRetention of Target Corporation.Retrieved on 1, 2015 from:http://www.managementparadise.com/forums/human-resources-management-h-r/220093-employee-retention-target-corporation.html