Regarding retail store giants, Target is one of the giants in this area. Over 2000 stores in the USA alone have made it possible to conduct business this big.
With a global presence and various product lines, Target has internal strengths and multiple opportunities. But it has to compete with giants like Walmart and Amazon. Doing a Target SWOT analysis will give us an overall idea of the company’s position.
Let’s get into it!
Target Corporation: Company Overview
| Company | Target Corporation |
| Industry | Retail |
| Founded (Corporation) | June 24, 1902 |
| Founder (Corporation) | George Dayton |
| Chairman & CEO | Brian C. Cornell |
| Headquarter | Target Plaza, Minneapolis, Minnesota, USA. |
| No. of Employees | 400,000+ |
| Annual Revenue | $106 Billion (FY 2021) |
| Website | www.target.com |
Founded over a hundred years ago, Target has become a necessity brand among young people. Target has reached a new level by continuously keeping up with the trend depending on the country or area.
With over 400K+ employees, Target has placed among the top 10 employers in the USA. With offline and online loyalty programs, strong and efficient SCM, and partnerships with various giant corporations, Target has gained a loyal customer base.
With a growing business, Target is doing financially well and expanding rapidly. But Target has weaknesses and threats to its business, as well as its strength and opportunities.
Product & Services of Target Corporation
Food | General merchandise | Clothing | Household Goods | Electronic Products | Toys | Many More
Target Competitors
Marshalls | Walmart | Best Buy | Amazon | GameStop | Dollar General | Kroger | TJX | Macy’s
Did You Know?
Target donated one million dollars to repair the Washington Monument with world-renowned architecture Michael Graves. Besides, they even helped maintain the national park service.
Strengths – Target SWOT Analysis
Product Line Variety: One of the major strengths lies in the vast product category of products the target offers. It’s an all-in-one solution for every customer, making the customer more foot traffic in the stores. Besides, focusing on the best-selling categories and pivoting and adapting to the market demand keeps Target where it is today.
Brand & Financial Positioning: When Target’s biggest competitor was lacking in a few spaces, that became Target’s focus and strength. You can get the cheapest product at Walmart or other retail shops, but the quality is not promised. Whereas, Target has this insane strategy to position itself, where they promise to provide premium quality products at lower, affordable, or discounted prices. Because of that, the company’s cash flow and overall financial positioning are impressive. Just two years back, profit increased by more than eighty percent. And, during covid and later, the brand’s online presence skyrocketed, and it’s now the sixth largest online retailer.
Loyal Customer: For the brand positioning and offering, customers know they can get premium items at affordable prices. That single factor worked like a charm; most customers stayed with Target for a long time. Most customers are young and love trends when they have a fun shopping experience with discounted prices. And a loyalty program for the customized offer only for them that works as a hook.
User Experience: The affordable price and premium quality weren’t only the crucial factor, but the customer’s overall shopping experience was one of the significant factors. Target ensures that customers have the best shopping experience once they enter the shop. To make that happen, their highly skilled sales are always ready to help you find the best possible deal. Besides, once the customers have the experience of fun, that makes them loyal to the brand.
Online & Offline Presence: Though only around 20% of the purchases on Target in online, it doesn’t say everything. These purchases come with extra benefits to the shopper, such as customized gifts, discounts, rewards, and loyalty programs, which make them return to the shop to redeem those services. And offline, Target has over forty brands, which are exclusive to the company with discount prices and are private-labeled. Besides these, Target has exclusive deals with giant brands or corporate partnerships. That helped them to expand their offline presence with more traffic in the shops.
Weaknesses – Target SWOT Analysis
Higher Price: Even with all the private-label brands, and partnerships, Target couldn’t lower the price to the competitor’s level. Sometimes, people want the lowest-priced product and will go to the other competitors, such as Walmart.
Data Security: People negatively react to those companies with data breach issues or when there are concerned with their personal information. Hundreds of thousands of people’s personal information are stored on Target’s server, and the server security was breached several times. Even hackers could hack customers’ credit card information, which was a huge concern.
Global Presence Shortfall: Even though the target has gained popularity in most North American countries and the states, you won’t find little to no presence in most continents. For this reason, Target’s competitors are gaining more presence and positioning in the local markets. Not being able to expand to other regions could put the company’s overall business and finance at risk.
Lower Diversified Products: Target’s product line is diversified but not enough to attract customers from all categories. And, compared to the other competitors, Target has way less in this section. For this reason, Target is losing a potential customer to its competitors and can’t monetize the traffic in the store.
Lower Online Presence: Not just that, Target lacks the expertise and overall trends in its online presence. Being the 6th most browsed retail store in the USA, Target has less than 20% of its total sales. The reason behind this is the site’s compatibility issues, slower and complicated transaction process, etc.
Opportunities – Target SWOT Analysis
More Online & Offline Presence: As presence is a major weakness, Target can start working on that. To make that happen, there should put more effort into offline presence. Expanding the business to other continents would be the first move. Depending on the location of the shops, they can work on the smaller format shops too.
Better Delivery System: One of the main reasons the online shopping experience didn’t reach its full potential is because of the lacking of a delivery system. They have a decent chain, but not good enough compared to the other competitors, such as Amazon. Start with better delivery systems in the larger states or regions and move into the urban and other areas where they can give their best to reach their full potential, such as same-day delivery.
Expand Partnerships: Target needs a better pricing strategy to compete with its competitors. They can find the solution by doing more partnership deals.
More Private-Label Brands: Besides, more deals and private-label brands will reduce the overall cost and better customer prices. And as discussed, they need to expand to more categories and increase the product line into more variety.
Use Customer Insights: Using data to target customers for better insights could increase overall sales. As they can provide crucial information about customers’ overall purchasing patterns, Target could benefit from focusing on those categories and creating better pricing.
Threats – Target SWOT Analysis
Fewer Entry Barriers & More Competitors: With enough capital to burn and a bit lower pricing, anyone can enter and become a direct competitor. Even if it’s a local competitor in an urban area, It can hurt the business. Target must always be at the top of its game to survive in the market. As more and more competitors enter the market with disruptive offerings, Target must expand to more areas and product lines into more categories.
Staying Trendy With The Market: As more day goes, the more disruptive the market becomes. With trends and everything, sometimes it’s difficult for a brand to keep up with everything to stay on top of the game. Keeping up with customers’ new wants and demands could be challenging in different regions and continents. If Target fails to keep up with the trend, customers will switch to competitors.
Giant Online Competitors: People are switching more and more to online purchases. Keeping up with giant online retail stores like Amazon will always take work.
[Bonus Infographic] SWOT Analysis of Target
Recommendations for Target Corporation
Keeping the balance between the aspects is crucial for a business to survive in the long run, and Target is no different. Here’s my recommendation for the company;
- Expand the market to more continents and areas.
- Focus the business on the urban areas.
- Better security system and maintenance planning.
- Find new marketing channels for online presence.
- Expand to more private-label brands and partnerships.
- Better online purchasing experience.
Frequently Asked Questions (FAQs)
What Country Did Target Fail In?
Target failed in Canada. After heavy marketing and capital burning, Target couldn’t survive in the Canadian market. They had to shut down all the stores and didn’t conduct any business there.
Final Words on Target SWOT Analysis
We can all agree that Target’s diverse strategy with premium quality and affordable pricing was one of the significant reasons Target is still thriving in the market. With a loyal customer base and royalty program, youth is easily motivated to return to the shop with trendy products.
But, there are many opportunities to work on and minimize the threats by solving the weakness. Besides expanding the categories and continents, focusing on the urban area will benefit the company in the long term.
References
- Wikipedia contributors. (2022, December 23). Target Corporation. Wikipedia.
- Lekus, E. (2021, September 29). Washington Monument under wraps art. The Baltimore Sun.
- Target’s Products & Services. (n.d.). Target Corporate.
- Hanbury, M. (n.d.). 8 clever tricks that target uses to get you to keep spending money in its stores. Business Insider.
- Peters, L. (2022, October 14). E-Commerce net sales of target.com from 2014 to 2022. Statista.
- Tuttle, B. (2013, September 11). Millennial Shoppers: Big on browsing, not splurging. Time.
- McCoy, K. U. T. (2017, May 24). Target to pay $18.5M for 2013 data breach that affected 41 million consumers. USA TODAY.
- Target’s Newest Deals and Fast, Easy Same-Day Services Take the Scramble Out of Last-Minute Shopping. (n.d.). Target Corporate.
- Ozarowski, C. (2022, December 9). Does Target Price Match?. GOBankingRates.
- Staff, R. (2020, May 20). Target profit sinks 64% as COVID-19 costs offset gains from sales surge. Reuters.
- Grants: Target. (n.d.). Target Corporate
- Genovese, D. (2020, March 4). Target’s small stores getting even smaller. Fox Business.
- Redman 1, R. (2020, March 4). Target accelerates omnichannel game plan. Supermarket News.
- Mislinski, J. (2021, October 29). Household Incomes: The Decline of the “Middle Class” 2020 Update. Advisor Perspectives.
- Climate & Energy: Target. (n.d.). Target Corporate
