A popular USA chain, Target sells various products from its stores across the USA. Their extensive distribution network and retail outlets provide the best selection of unusual goods in one accessible spot.
Despite all of Target’s best efforts, the retailer is behind in digital marketing. Marketers need to adapt to the changing tastes of consumers. As a result, successful marketing initiatives are increasingly focusing on digital channels.
The SWOT Analysis of Target Corporation are the subject of this blog. But, first, let’s do some background research on Target, including the company’s history, offerings, financial health, and significant rivals.
SWOT analysis of Target
There are many SWOT analysis examples out there – and today, we will be looking at Target.
The Target Corporation is a chain of American department stores that carries brand-new products, including hardlines and soft lines. This store ranks eighth in terms of retail sales in the USA. The firm’s headquarters are in Target Plaza, which is situated in Minneapolis, Minnesota.
Target’s primary objective was to “personalize each store to assure a locally relevant experience.” It was established on June 24, 1902, in Roseville, Minnesota, making it 194 years old.
In 1962, Dayton’s company created the first Target store in Minneapolis, and in the 1980s, as part of the Hudson organization, Dayton started expanding Target throughout the nation.
It introduced a new format for its namesake stores in the 1990s. As a result, the company has done quite well as the “cheap-chic” leader in its field. The company rebranded itself as the target corporation in 2000, and by 2004 it had sold all of its department store brands.
Products by Target Corporation
Here are some of the things commonly found at Target:
- Provisions and Drinks
- Cosmetics and Health Aids
- Apparel, Accoutrements, and Shoes
- Pet Stuff
- Textiles and Furnishings
- Products for the Home, Including Electronics
- Goods for the Garden and Lawn
- Preparation for a Trip
- Stationery, Crafts, and Other Miscellaneous Goods
SWOT Analysis of Target: Strengths
The positive aspects of an organization are a direct result of its strengths in SWOT Analysis of Target. Target has an advantage over its rivals due to the causes above. Here are some of Target’s best features:
1. Loyalty Program
With the introduction of the REDcard Rewards membership software program in 2010, Target has retained and expanded its customer base while also providing its regular consumers with a convenient way to save money when shopping in-store or online.
Within five years of its establishment, REDcard had a 21% penetration rate, ensuring the company’s continued success thanks to its dedicated client base.
2. Corporate Partnerships
Most Target locations also have a Starbucks, a significant customer draw. CVS also took over all of Target’s pharmacy operations, creating a close partnership between the two major corporations. Joint efforts like this benefit everyone involved financially.
3. Financial Position
The financial foundation of Target Corporation is strong. They’ve been steadily increasing their popularity for well over a century.
4. Variety of Merchandise
Customers may get anything from fashionable clothes to high-quality sports gear at Target. Once inside, the buyer doesn’t have to travel anyplace else to fulfill his shopping needs.
In addition to making precise product suggestions, the Target molecular app can recommend related products based on a customer’s tastes.
5. Private-label Brands Products
Private-label items are manufactured just for a retailer, such as those sold by Target. These products are often offered at lower prices than rivals, with a significant percentage of the proceeds going to the retailer.
It is one the important part of SWOT Analysis of Target. Target’s private-label items include exclusive fashion lines, culinary brands, and more, and they have many dedicated fans.
SWOT Analysis of Target: Weaknesses
Consumers’ reactions and problems with management might reveal a company’s weaknesses in SWOT Analysis of Target. When a company’s performance falls short of its rivals, it’s typically because it lacks some resources that those rivals have in plenty.
1. High Prices
Target is often accused of being too trendy by its detractors. However, according to a survey undertaken by business leaders, Target’s pricing at some of the country’s top rivals, such as Walmart, is similar across various shopping centers.
2. Technology Sector
The Target Corporation is spending enough to expand its technological sites, but it is still far behind in this field. It is one the important part of SWOT Analysis of Target.
To a large extent, Target is hampered by the fact that many of its rivals are already established as market leaders in this sector.
3. Data Security Issues
Target has been the subject of many high-profile data breaches. As a result, protecting the client’s financial information is crucial. In addition, Target offers credit services, and because of this, customers’ credit accounts have been breached, putting their private financial details at risk.
4. Lack of Global Reach
Though it has been around for a century, Target hasn’t had the same global impact as other corporations. Although they have never been defeated in the United States, they are not a major player internationally.
The company opened 133 stores throughout the North American nation between 2011 and 2015 but was eventually compelled to shut them all down. Given that it was one of Target’s worst failures in international markets, the retailer decided against it.
5. Store-Centric Approach
Stores now need to prioritize online sales. Despite being one of the few companies to profit from the increase in internet shopping, Target is seeing its brick-and-mortar sales drop, which is offsetting any online benefits.
Even though accessories and clothing have a modest profit margin, Target has seen a decrease in sales in these categories. Low-margin items are more sensitive to drops in sales, which reduces profitability more than for higher-margin products.
SWOT Analysis of Target: Opportunities
Chances may arise from various sources, including shifts in consumer habits, government regulations, technological advancements, etc. To maintain market dominance, businesses must be alert to and responsive to emerging possibilities.
1. Delivery System
The firm recently introduced a new service that enables users to return things in as short as one day, similar to Amazon and Walmart.
After Target spent over $500 million on acquiring Shift, a business utilized by numerous of its rivals, the idea became feasible. In addition, recent years have shown that the market for selling and shipping electronic devices online is quite competitive.
2. Urban Population Stores
Target’s image as a retailer is built on the spending of suburban families and millennials. However, in contrast to popular belief, big-box stores are not always located in highly populated urban areas. As a result, they may quickly increase their customer base by entering this sector.
3. Target’s Partnership with CVS
CVS Health purchased target’s clinic and pharmacy division in December 2015 for about $1.9 billion. This implies that CVS Health is in charge of the Target pharmacy department. So it’s a terrific chance for Target’s clientele to access first-rate medical care right in the shop.
4. Small–Format Stores
The Target Company has been expanding into smaller-format shops in populated locations near universities and other academic institutions. These shops are about a third as big as an ordinary one of their kind.
The one-hundredth small-format shop began for business in the summertime of 2019, with annual revenues expected to top billion dollars by the year’s end.
The first of the company’s 6,000 square foot “micro-stores” will open in crowded urban and university areas in 2021. Also, it aims to establish around three dozen new small shops extending from 12,000 to 40,000 sq ft.
Small-format shops have great promise and can fuel Target’s development for many decades.
SWOT Analysis of Target: Threats
Threats of Target corporation in SWOT Analysis of Target are as follows:
1. Increasing Competition
There is a recent proliferation of new companies operating in this field. Competitiveness will increase as a result of this. It is one the important part of SWOT Analysis of Target.
Walmart is one of Target Corporation’s most significant retail industry threats. We also face stiff competition from Amazon, Home Depot, Costco Wholesale, and many more.
2. Government Regulation
Target Corporation faces danger if it deviates from its profit-driven overall plan and is subject to the laws and regulations enforced by the government.
3. Changing Customer Preferences
Increases in internet purchasing might have severe consequences for Target’s financial success. There has been a recent uptick in competition from companies like Amazon, which drives supply chain management via e-commerce.
Although this might provide new growth prospects, Target could have challenges competing in densely populated areas due to Amazon’s increased focus on logistics and its ability to meet shifting consumer needs promptly.
Retail chains like Target may benefit significantly from doing a SWOT Analysis to dissect their business and evaluate the opportunities and threats facing their management. This concludes our Target Corporation SWOT analysis blog study.
Target’s status as the preeminent shopping destination in the United States is attributable, in no little part, to the fact that the retailer has been able to forge fruitful partnerships with other businesses, provide customers with a diverse selection of goods, establish customer loyalty programs, and sell its private-label goods, all of whom have contributed to an increase in revenue.
Target’s failure may be attributed to the absence of an urban mailing address and the company’s expansion into foreign markets. However, the company may keep its enviable position and increase sales by catering to these criteria, building a robust security system for client confidentiality, and entering the digital marketing sphere.
Target may take advantage of the low overhead and high return on investment of digital advertising by increasing its visibility across a variety of online mediums, including search engine optimization (SEO), email marketing (EMA), content marketing (CM), and social media marketing (SMM).