Target Case Study

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.

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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. v)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 cheaper price compared to others.It means that its losing its premium image and this shift seemed subtle on the paper given that it would merely require a different weighting of the tagline “Expect more, Pay less,” the reality was that most people did not shop at the Target for the “Pay less” part. At one stage, Target’s low price strategy was working but its revenue and stock prices were suffering. At the same time, the retailers who did nothing in this kind of situation also suffered.

The best example would be Abercrombie & Fitch who did not lower their prices claiming that it would damage their premium image.As a result, they suffered in the retail industry. Walmart was not only able to convince the masses that it was not only cheap, but fashionable and highlighted how it can reposition a highly entrenched brand. This is also illustrated by how Target did not get the public to budge with its initial efforts to communicate better value. 4)Target should have attracted the customers by improving the style of their products while still maintaining their quality of the products.They could have also brought some new products which other competitors does not carry and attract the people towards them.

5)Target should have made some drastic changes for few months to improve their sales even if it meant losses. They should have pitched on stylish merchandise that walmart doesn’t carry; people might start to get the message. Once, people return and find that prices aren’t higher than walmart, they stay and target could ease up on the loss leaders.