TARGET CORPORATION

Target Corporation (TGT)

Target Corporation (TGT)

Basic Information

Target Corporation (NYSE: TGT) is an American retailing company that was founded in Minneapolis, Minnesota in 1902 under the name of Dayton Dry Goods Company. In 1962, the first Target store opened in Roseville, Minnesota, and in 2000 the company changed its name from Dayton Hudson to Target. It is the fifth largest retailer by sales revenue in the United States, behind The Home Depot, Kroger, and Costco. The company is ranked at number 31 on the Fortune 500 as of 2008. Target operates its retailing business exclusively in the United States. Target is a component of the Standard and Poor's 500 index.

Background/ History of Ticker Symbol

Target Corporation competes directly against other discount retailers, mainly Wal-Mart and Kmart. Since its founding in 1962, it has intended to differentiate its stores from its competitors by offering what it believes is more upscale, trend-forward merchandise at low cost, as opposed to the traditional concept of focusing on low-priced goods. Douglas J. Dayton, one of the Dayton brothers, explained John Geisse's concept:

“"We will offer high-quality merchandise at low margins, because we are cutting expenses. We would much rather do this than trumpet dramatic price cuts on cheap merchandise."

As a result, Target stores tend to attract younger and more educated and affluent customers than its competitors. Currently, the median Target shopper is 41 years old, which is the youngest of all major discount retailers that Target competes directly against. The median household income of Target's customer base is roughly $63,000 USD. Roughly 76% of Target customers are female, and more than 45% have children at home. About 80% have attended college and 48% have completed college. Ninety-seven percent of American consumers recognize the Target Bullseye logo.

In October 2008, Target announced plans to fight the perception that their products are more expensive than those of other discount retailers. The company planned to add perishables to their inventory, cut back on discretionary items, and spend three-quarters of their marketing budget on advertising that emphasizes value and includes actual prices of items featured in ads. Target also planned to slow its expansion from about 100 stores a year down to 70 stores a year.

Products and Services Produced

The retail industry is the major trendsetter and a driver of innovation in other industry sectors of the United States. As the competition is intense and consumers are more demanding than ever before, retail firms are bound to bring innovative changes in their setup to attract more and more consumers to their stores and to gain a competitive advantage over others. In addition to this, the rapid growth of technology has also deeply influenced the industrial practices of retailing. In some respects it has brought numerous challenges to the retailers but it has also brought numerous opportunities for the retailers. For instance, the emergence of the Internet and growing trend of the e-commerce industry allows the retailer to reach consumers all over the globe without investing huge amounts for the establishment of foreign ...