SWOT Analysis
Strengths
• Target is an innovative and influential retail store. Their mission statement focuses on four core roles: great guest service, clean stores, in stock merchandise, speedy checkout. These guidelines make up the culture of the fast, fun and friendly stores.
• Target focuses on new ideas and exclusive products, such as Clear Rx. This invention has grossed the company over 7% of their total sales and contributes to about 33% of the guests.
• Target is committed to having their location accessible to many of their current and potential guests
• Top designers have signed agreements with Target to sell their items at affordable prices under an agreed upon name. For example, Victoria’s Secret produces the Gillian O’Malley lingerie line.
• In some states, the police department will rely on Target’s Asset Protection systems to catch thieves and monitor fraudulent activity. Weaknesses
• Target is not global retailer, which means that they do not have a presence in countries worldwide. They should definitely look into traveling overseas, since their competitors are working internationally and boosting revenues.
• Pharmacy guests account for over 7% of their total sales. The turnover rate for Pharmacists is very high, since they are required to work 12-hour workday schedules.
• Target has a reputation for new product development and creativity.
Opportunities
• Gift cards can now be used in both the store and on the Internet, thus leading to more sales and reaching the computer literate market
• To take on competitions plans (i.e., Wal-Mart) and focus on opening stores in international markets
• New locations give Target the opportunity to be diverse in the market. More and more Targets are attaching to trendy malls in different market segments.
Threats
• Most Targets are located within a 10-mile radius of their major competition
• In some markets, Target’s prices are higher than competitors
• Target’s that do not possess a grocery department are a threat to retailers, such as Wal-Mart, who are now implementing the majority of their stores into Super centers
Balanced Scorecard
How I plan to measure
Financial Performance
• Positive Cash Flow
• To succeed financially, we will appear Target brand to our shareholders, guests, team members and the community. Target will provide timely and accurate data in an effective and efficient manner to the respective personnel. This will be a priority and management will do whatever it takes to increase sales.
Customer
• Customer Satisfaction
• Price with Competition
• To achieve the vision, Target should refer to their customers as guests. Guests should be treated as if this is their very first time shopping in the store. Guests should shop with clutter-free aisles and fast, fun and friendly team members.
• Target should do price match with their competitors
Internal Process
• Sales Performance Management
• Sales Managers need to be consistently trained on forecast accuracy, ongoing skills training and vertical management
• Managers should run the day-to-day businesses by the code of ethics with the store’s mission statement in mind.
Learning and Innovation
• Raise employee moral and productivity
• The business processes that Target must excel at is training and development of team members. This means turning opportunities into strengths and following up on corrective action data with rehabilitation methods. Target will also put more team members as mentors and tutors, to prepare the growth and progress of new associates still in their 90-day period.
4. In order to access the success of the company, the following information was gathered to determine the critical success factors of Target:
• Financial Performance
o Positive Cash Flow
• Customer
o Customer Satisfaction
o Price with Competition
• Internal Process
o Sales Performance Management
• Learning and Innovation
o Raise employee moral and productivity
I selected this particular CSF’s for Target from prior experience, interviews with executive leaders and team members and guest survey reports.
Positive Cash Flow.
Some of the busiest times of the year at Target include Back to School, Thanksgiving and Christmas. These seasons generate the most sales of the company and compensate for missed sales goals for the year. During the off-peak season, Target has missed sales goals, which affects every possibility in the store from Logistics to Payroll. When sales are missed, it affects the financial performance in a negative way. Any first line sales is equivalent to positive cash flow for the company. According to Business & Finance “Merchandise Optimization helps drive top-line profits of a company: generating revenue and gross margin as opposed to cutting costs through improving efficiency and operations. They focus on generating more gross margin for the retailer by enabling merchants to make better and faster buying, assorting, pricing, promoting, and markdown decisions that are based on customer demand. These methods also have a positive effect on inventory and customer loyalty” (Retail Industry, n.d., 1). Positive cash flow should be a day-to-day effort, with at least 96.5% attainability.
Customer Satisfaction.
Malcolm Fowler, EVP of Products and Marketing, says that in order to gain customer satisfaction “it is important to take advantage of the point of sale location – where interactions take place with your top customers and others. According to a recent Point of Purchase Advertising Institute (POPAI) consumer buying habits study, over 70% of purchasing decisions in mass merchandisers and supermarkets are made in the store. Perhaps as much as 70% of your opportunity to have effective communication with your loyal customer base occurs there as well. Adopt a strong strategy that expedites the introduction, and promotes the over-all customer benefits. Customers will take notice. But the benefits don’t stop there. By extending the same promotional practices to non-loyalty shoppers, you can take advantage of the in-person ‘face time’ to help encourage [customer satisfaction] and to press home those company differentiators” (Fowler, 2003, 1).
Price with Competiton.
Today’s marketplace is filled with competitors trying to beat one another’s price to gain the loyalty of a customer. Target distinguishes its product by offering a quality of service and attributes of the product. Most retail conglomerates are pricing with their competition, thus contributing to high customer satisfaction.
Sales Performance Management.
“Organizational sales success is not unlike the world of team sports – it starts with high quality sales talent. Understanding the critical sales skills required is the first step in talent selection. For example, a large consulting firm analyzed its top performers and found that qualifying, answering objections, perseverance, customer service, negotiation skills, personal responsibility, and a profit mentality were the critical sales skills that differentiated its top performers from its weakest performers. Understanding these critical skills led the firm to devise a critical skills test and tailor its interviewing process to test for those critical skills” (Marterella, 2005, 1). Managers should be trained on a continual basis, since success is measured by profit.
Raise employee moral and productivity.
It’s a hidden rule of sales that the majority of low paid workers come from low skilled individuals. Low wages never equals a satisfied employee, thus reflecting a negative disposition on the organization. Moral within the workplace can be raised in other ways other than wage. For example, does the quality of life offset the pay? Human Resources and Managers are responsible for ensuring that their staff is productive to their pay. Employees can be recognized on a cost-saving company sponsored methods, such as recognition walls, birthday parties, cookouts, etc. Target is given a requisition account that is used solely for that purpose.
Reference:
- References Blocher, E.J., et. la., (2005). Cost Management: A Strategic Emphasis (3rd Edition). Boston: McGraw Hill Fowler, Malcom (2003). Retail Strategy Center. Retrieved on September 9, 2006 from www.brianwoolf.com/articles/read.asp?id=11 Marterella, Jerry (2005). The Eight Critical Success Factors of High Performance in Sales and Marketing. Retrieved on September 9, 2006 from www.chally.com/enews/issue10/EightFactors.html
