Target, founded in 1881, has been a very fast growing retail store that appeals to people from all over. From ages 1-100, Target is seen as a fun store, that brings customers in because of their aesthetics, well designed brands, and specialty items. Although it was not an easy start for the company, from leadership changes to only one location, they have kept up with their competitors in recent years. Target is constantly coming out with new products, redesigning store layouts, and developing new ideas involving generational and holiday trends.
History and Major decisions made within the company's history
Target, a fast growing, well known retail/grocery store has not always been known by the famous name and bulls-eye symbol. A man by the name of George Dayton was travelling around the country, trying to figure out a reasonable place for growth in the merchandise market. He began Dayton Dry Goods Company, in 1881 in Minneapolis, Minnesota. The store quickly soared above others, being known for quality customer service, products and always giving back towards the community. What started as just one store soon grew to across the nation.
In the first decade of the 1900's, the name was changed to The Dayton Company, since expanding from just dry goods. People referred to it as “Dayton's department store.” Beyond just the store, George Dayton was the founder of The Dayton Foundation. This was created in order to help others get on their feet, give money if needed, and to begin the value of giving, that has been invested in Target stores since the very beginning. The Dayton Company gave 5% of profits before tax to help people around the country. As George D. Dayton said, "Success is making ourselves useful in the world, valuable to society, helping in lifting in the level of humanity, so conducting ourselves that when we go the world will be somewhat better of our having lived the brief span of our lives” (Dayton, Bullseye, 2018, p.4) This is a value that has always put Target ahead, compared to most retail stores.
In the midst of the 1920s, a strike occurred that caused merchandise to not be shipped, which in turn withheld products from The Dayton Company's shelves. The company acted fast and used planes to bring in their products. Before this, planes had not been used frequently for the delivery of merchandise. People were so fascinated and intrigued with how innovative The Dayton Company brought in their products through air travel, that the goods started flying off of the shelves. In addition to the store and foundation, The Dayton Company founded a radio station in Minneapolis. In 1938, George Dayton died, leaving the company to his son, also named George Dayton. The leadership of the company was slowly disbursed among others in the Dayton family, with many of the men in the family as leaders of The Dayton Company.
Dayton Co. quickly realized that they had potential to be something big in the retail world, and added on an interiors department to their store, which came to be known as Target Commercial Interiors. Other stores slowly started to open in suburbs, malls, and shopping centers. With other stores open, Dayton Co. branded themselves as a discount store with above average products, appealing to shoppers who want a high quality shopping experience. The idea of the discount store was then developed. “A quality store with quality merchandise at discount prices, and a discount supermarket...75 departments in all” (Bullseye View, 2013, p.5 ). The store was to be family friendly and easy to navigate. All that was left was a new name. The creative team wanted to use and red and white, so they went with the current bullseye logo and named it Target.
The reason it was named Target was, “As a marksman's goal is to hit the center bulls-eye, the new store would do much the same in terms of retail goods, services, commitment to the community, price, value and overall experience" (Chase, 2018, p.3). Target took to the idea of celebrating holidays, and changing the store based on the season. This is where the Christmas decorations, summer fun items and fall necessities came into play. In the 1960s and 1970s, Target was expanded outside of Minnesota, becoming a national retail company. In 1975, Target ads began, capturing the eyes of people across the country. In 1979, Target reached $1 billion sales in revenue. By the 1990's, the size of stores was expanding to “Target Greatland,” which is what we refer to today as “Super Target.” The promise of the store to “Expect More, Pay Less”, was created along with the Target credit card (now the Red Card), in order to increase revenue and give customers 5% off with use of it. Staying ahead of its time, Target went online with a website and online ordering in 1999. By 2001, they were in 47 states, opening the 1000th store. The annual revenue was $50 billion in 2005, and currently it is around $72 billion. In the last 20 years, Target has taken off with new brands, partnerships, celebrity connections and organic products. From the cartwheel app to the Chip and Joanna Gaines “Hearth and Home” collection, Target leads the retail industry in the creativity category.
Outlook of the company going forward
Target has been very successful, since it began as The Dayton Company. It continues to be a leading company in the New York Stock Exchange, and on the list of Fortune 500's, with revenue sky rocketing. Because of the new age of online sales, Target has been doing very well. It has become much easier for people to order items from the comfort of their own home. With home delivery and in store pick-up, there is minimal effort required by consumers in order to receive the products that they want. Although Target has big competitors like Amazon, they are still keeping up. As said in Financial Times, “During the quarter, comparable digital channel sales were up 41 per cent year on year to make up 1.5 percentage points of the 6.5 per cent overall like-for-like sales growth during the quarter — which was Target's best in 13 years, the company said” (Dye, 2018, p.3). The fact that Target has continued to still be a competitor for companies like Amazon and Walmart prove the ability for them to keep succeeding in the retail world. In the article, it also said, “…We note that working capital continues to improve, with accounts payable exceeding inventory, indicating improved leverage with vendors” (Dye, 2018, p.8). With all of the competition of the growing online stores and online ordering, Target still is projected to continue to keep up and have a thriving revenue for the years to come. Although people do enjoy ordering from the comfort of their home, lots also enjoy going into the Target store. It has created a wholesome, fun environment that appeals to shopper of all ages, genders, and cultures.
The market for super stores over the past few years has been challenging. with forcing Large corporations such as Target have been forced to to change the way they function. Target recently has had to take on some large investments in order to combat the structural changes. The CEO of Target is putting forth a massive $7 billion investment that he hopes will help Target survive through the changes and be a thriving organization of the future (Gustafson, 2017, p.1). Investments include closing down massive brick and mortar stores that have been steadily losing money and replacing them with smaller more convenient ones to fit consumer's needs. The CEO of Target felt like the current store models were very much out of date and he feels as if new innovative design will draw in more customers. One of Target's largest threats is online retailers who are trying to dominate the market. Target is making an attempt to improve their online presence with this investment in addition to making delivery times much faster and profitable. One of Target's biggest competitors is Wal-Mart, who is known for having some of the lowest prices around. Target is hoping to drop their own prices in order to compete with Wal-Mart as well as online retailers (Gustafson, 2017, p.5 ).
It can be seen that the future of Target is up to millennials and younger generations, as they make many of these changes within the corporation. With the opening of new smaller store fronts, they hope to open these first in urban areas and college towns with high populations of young people. Along with creating a modern and more welcoming design within the stores, Target has also decided to part ways from some of their past featured brands which some would consider to be out of style (Danziger, 2017, p.4). They now hope to compete with more high class brands such as H&M and Lululemon. Target started to move towards having more premier brands recently and they continues to make improvements, in order to be a competitor. According to the CEO, Cornell, he feels as though it is easy to implement great business strategies but the real success to overcoming these structural changes has come from the team Cornell has put together as they have done an excellent job of revamping Target and keeping it alive (Danziger, 2017, p.5).
In addition to changes within the brick and mortar stores, the company has decided to also invest in some in-store technological advances. A huge part of the upgrade includes improving the self-check-out machines to make the process much smoother and easier for customers (Target Corporate, 2017, p.2). Another great addition that will be beneficial to customers is the ability for consumers to order products online from the store in case they are unable to find exactly what they are looking for in the store. Employees will be able to help customers do this in store through the use of an app called “myCheckout” and customers will be able to have those products delivered directly to their homes.
Wi-Fi is also very important to young people as they feel the need to constantly be connected with the world around them no matter where they are. Target has taken measures to provide a higher quality Wi-Fi within the store. This upgrade will certainly benefit those who enjoy spending time at the coffee shops within the stores. Target hopes to make technical issues a thing of the past for employees and customers. They have created bots to scan the systems and fix issues before they are even noticed (Target Corporate, 2017, p.11).
In addition to changing the design and structure of the stores, Target also wanted to alter some of their products within the fashion and beauty categories. Target removed some of their older clothing brands including Merona and Mossimo and has since added the brands of Cat and Jack, A New Day, and Goodfellow & Co (Gustafson, 2017, p.16). Target hopes these new brands will increase customer visits as well as revenue. The fashion brands were the first to launch but just this year Target has now also added eight new cosmetic brands (Target Corporate, 2018, p.2). These brands are meant to cover every type of beauty and expand the range of products so everyone can find exactly what they are looking for. The brands were also originally online so this is the first that they will be available in stores, making it more convenient for some consumers (Target Corporate, 2018, p.2).
How an employer views his company can give insight into why that company is successful or unsuccessful. Looking at the mindset of an employer of a successful company and an employer of an unsuccessful company and contrasting the two can show what type of mindsets work well in creating and sustaining a wealthy company. If someone is trying to start a company, they would want to take the mindset of successful companies' employers and avoid the mindsets of employers that controlled unsuccessful companies. Target has a lot of ideas that they try to follow to create a good business. The main motto that Target uses is “Expect more. Pay less,” as previously stated. This motto is the ideal shopping experience that everybody is looking for. People want to have the best quality products at the lowest price. Additionally, Target has other values that they want their company to follow. These other values include: “great shopping, anytime, anywhere”; “celebrating diversity & inclusion”; “design for all”; “more for your money”; “community support & engagement”; and “a fun and rewarding place to work” (Target Corporation, 2018, p.5). Target appears to be doing a great job in the business world because of these values.
These beliefs are the basis of the company and are make Target what it is today. Some extra comments of importance can be found in Target's financial records. It was stated that Target has succeeded because of the “positive perception of Target” (Target Corporation, 2018, p.2). Target understands that the success of their company is fully dependent on how the public perceives them. Naturally, Target tries their best to present themselves as a great company and tries to influence a positive perception of the public.
An additional comment of importance found in Target's financial records is that Target is always trying to provide relevant and reliable experiences for their customers both in high sales regions and low sales regions (Target Corporation, 2018, p.4). Being relevant to customers is a vital aspect of business. If a company is not relevant, they will not keep customers. Additionally, being reliable is important for any business. If a company is unreliable then people will feel less trusting of that company and may not continue doing business with them
Target is a corporation that is doing very well in the business world due to the people that they hire. The employees of a company make it what it is. If a company has employees that are unmotivated, unskilled, unproductive, and always in a bad mood, that company is going to fail or in the least be in a very unhealthy position. The employees of a company are the people that interact with customers, run human resources services, and prepare the company's product. All this work that is accomplished by employees is what a company's customers will notice and reflect on when they think of that company. Because of that, the employees that a company hires are one of the most important factors to a it's success.
Target has had some bad publicity when it comes to hiring practices. At one point, Target implemented a system that rejected applicants for criminal charges that were not relevant (Jones, 2018, p.1). Target was trying to hire good employees and tried to set certain standards that would disqualify “bad” employees from being able to work for them. This is why Target did not want people with criminal records working for them. They assumed that if there was any criminal record then that is not the type of person they want working for them. This type of “filtering” can be considered stereotyping. While it is possible that most people with criminal records may prove to be bad employees, that will not be the case for everyone with a criminal record. Target may be disqualifying some of the best employees they could hire just because they have a criminal record.
While Target did have some trouble with their “filtering” of applicants they have fixed their mistakes and have sought professional help for their new hiring practices (Jones, 2018, p.10). Target still does care if their employees have a criminal record, but now they don't ask about that until after they are hired, showing that they are willing to work through that issue (Jones, 2018, p.11).
Target looks for employees through the internet. They post jobs that need to be filled on websites like Jobs Online, where an individual can apply and see the benefits and compensation that are offered for that job (Jobsonline, 2018). In addition to finding employees on the internet, Target finds some of their employees through different events such as different conferences and career fairs (Target Corporate, 2018, p.1-4). When hiring these new employees either through the internet or in person, Target is looking for a diversified work force, and culture. (Target Corporate, 2018, p. 1). Having a diversified work force can provide many benefits, such as: More diverse ideas, different views about the same topic, and allows for growth within the work force.
Review of Financials
Target's financial position has been relatively stable over the last 5 years, having minimal changes in their sales revenue (Target Corporation, 2018, p.5). While being consistent is a good quality, consistently growing is something that is more desired. Looking at Target's financial statements, one can see how well Target is doing financially. Looking at different ratios such as the “quick” ratio and “gross profit margin” ratio and comparing these ratios to the industries average will give a good understanding of how well Target is doing.
The “gross profit margin” ratio is a ratio that tells how much gross profit is received for each product sold. This ratio is important to see how well the company is doing at selling profitable products, the higher the ratio the better. Targets “gross profit margin” ratio average over the last 5 years has been 29.54% according to Ycharts (Ycharts, 2018). Compared to Dollar General's 30.65% “gross profit margin” ratio and The Kroger Co's 21.31% “gross profit margin” ratio (Ycharts, 2018). Target appears to be average in its “gross profit margin” ratio. They are slightly behind Dollar General but also way ahead of The Kroger Co. Although The Kroger Co is also a smaller company which could explain why they have a weaker “gross profit margin” ratio.
The next ratio to be compared is the quick ratio. This ratio measures the company's ability to pay off its debt with its highly liquid assets. A high ratio number is also preferred for the quick ratio because the higher the number the more capable the company is in paying off its debts. Targets quick ratio is 0.17 according to gurufocus.com (gurufocus, 2018). The retail industries average is 0.44 according to CSImarket.com (CSImarket, 2018). It appears that Target is not doing that well compared to the industry average. This means that compared to other companies in Targets industry, Target can not pay off its debts as easily with its liquid assets.
When looking at the overall performance of Target employees, there are many impressing behaviors that are represented. One organizational behavior that sticks out to man people is the emotions. As a shopper walks into Target, they will instantly feel the welcoming and happiness in the store environment. The employees are the heart of the culture, and really strive to make individuals feel welcome, in a retail store. The Target headquarters set very high standards and limits for the employees to give customers the best experience possible. Target tries to impress and show the customers more than they expected when visiting a store or even online shopping. Most companies keep their products and employees average; therefore, this leads to not standing out or presenting a different and unique outlook.
One of the most noticing things Target employees present is their teamwork. If a company or business does not show teamwork and that they are not capable of working diligently together, then that as a customer, is right away a way to lose business. When walking into a Target store, things are presented around the store that show diversity and inclusivity. Target strives to where anyone is welcome to buy their products without being judged. If a business does not show diversity, then they will lose business.
The products that Target put out on their shelves are of high quality. In the past, it was seen that Walmart and Ross Dress for Less sell cheaper products that do not last. Target has a very select variety, therefore Target shows and produces products that are a step ahead of Walmart and other stores. When shoppers buy a product at Target, there is a higher guarantee for it to be a quality item that is worth the money spent, for the product received.
Target has received many performance awards over the years. On the Corporate Target Site, there are many awards listed and given out to target for various aspects of their performance (Target Corporate, 2018, p.3). To briefly list the awards, some are the 2018 Corporate Citizen award and 2018 Great Place to Work. The 2018 Corporate citizen award is an award for the most sustainable companies and companies who can work to be energy efficient. From this award came the Energy Star Partner of the Year Award which was given to Target in 2018 for the environmental protection. This award has been given to Target for the last three years. The 2018 Great Place to Work award was given to Target because Target is a company who believes in diversity and believes in the importance of caring for employees and treating staff with respect. Within this award came certain rankings from a variety of magazines. The Diversity Inc. voted Target as number 24 on the list of Top 50. In addition to this, Fortune Magazine ranked them 38th and Human Rights gave a score of 100% to Target for inclusion and workplace environment. The National Association for Female Executives also name Target one of the top companies for executive women. In addition to all of this, Target was named the Omnichannel Retailer of the year in 2016 and Fortunes ranked Target number seven on the Social Media Champions list.
Among these awards, Target receives immense praise for their performance. Target is a company that continues to grow. On their corporate website, Target explains, “We're proud to be recognized as one of the most respected and responsible companies in the world” (Target Corporation, 2018). Target knows they are competing well and serving the needs of their workers and communities, but each year they continue to grow and improve all aspects of their store. Overall, Target is a business that strives to perform and perform well. Target will continue to grow and receive praise for their performance.
Target has continued to stand out in many areas of retail, from interior decorations, to dealing with social issues up front. It is one of the first companies to allow transgenders to use male or female bathrooms. This is a way that Target let customers from all genders and all beliefs feel more welcome and safe in store. As stated in an article about this social issue, “Inclusivity is a core belief at Target,” the Minneapolis-based retailer's post last year said. “It's something we celebrate. We stand for equality and equity, and strive to make our guests and team members feel accepted …” (Bourne, 2017, p.6). Another thing that stands out differently about Target are the red concrete balls in front of the stores. They are not only used to add a unique look to the store front, but they also serve a greater purpose-- to keep cars from entering or crashing into the front doors of the store.
A message that stands out on commercials and advertisement is the Target dog that flys in first class. This represents that the dog and Target are at the top of outstanding customer service and selling their product. They continue to lead in ads, and in the marketing category. When it comes to design, Target reinvented the shopping cart as well. This gives customers a better reason to shop at their store because the cart is 15 pounds lighter than a steel cart at grocery stores or other big company sellers (Rossen, 2016, p.13). This also allows the shelves in stores to not be damaged when a cart bumps into them. Because Target changed the cart to plastic, this is safer for small children and allows customers to not have to push as much weight.
Overall, Target is well known for reaching out to all kinds of consumers which makes them the second largest manufacture in the United States. There are many reasons why Target is so successful and why people keep supporting their brand across the country. From red cards (in sponsorship with MasterCard and given 5% discounts when making a purchase), free shipping from purchasing a product from their online seller, diversity, great employees that are willing the help etc. Target will continue to be successful because of the way they treat their customers and continue to advertise their product well.
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