Target Corporation

By: Bowei Wang, Peter Haldis, Yoichiro Hayakawa, Arjun Karanchi, Harrison Killefer, Tadhg Moriarty, Will Swaim .

Target Performance and Scope

Allocation in Percentages

Household Essentials Hardlines Apparel &

AccessoriesFood & Pet

SuppliesHome

Furnishings & Décor

2011 25% 19% 19% 19% 18%

2010 24% 20% 20% 17% 19%

2009 23% 22% 20% 16% 19%

2008 37%* 22% 20% *combined 21%

2007 37%* 22% 22% *combined + other 19%

• Based on Fiscal 2011 data (ending January 28, 2012):-Total revenue Y/Y growth of 3.7% (to $69.87B); five-year GAGR of 3.3%-Net earnings Y/Y growth of 0.3% (to $2.93B); five-year CAGR of 1.0%-Diluted EPS Y/Y growth of 7.0% (to $4.28); five-year CAGR of 5.9%

• Product purchase mix by year:

• For comparison, Wal-Mart had global revenue Y/Y growth of 5.9% (to $443.9B), and net earnings Y/Y growth of -3.6% (to $16.4B).

Three Competition Questions

Who

• Amazon• Walmart• Kmart

Where

• Rural • Urban• International

How

• Diversify• Alliance• M&A

Create Value GrowthCapture Value Differentiation

Current Profit Drivers

Resources

Capabilities

CompetitiveAdvantage

• Target REDcards• target.com & target apps• Successful Private Labels• Wide network of Stores

• Relation with suppliers• Fast Expansion• Customer Loyalty

• Value for Money• Trendy Aesthetics

Identify+

Upgrade

Sustainable Competitive Advantage

Value? Rare? Costly to Imitate?

Organization Fit?

Yes YesYes Yes

Conclusion

E-Commerce

• Target needs a competitive e-commerce platform• Currently 23rd in annual online sales

• New Competitors• “Showrooming”

E-Commerce

• Strategy for Website Development–Must make the development of Target’s

online retail platform the number one priority–The website must offer reliability and ease

of use – Leverage brick & mortar presence

Painting Canada Red

• Acquisition+Remodel+Model

7 Provinces-200 Stores

Conclusion:

It is impossible to take on Wal-mart directly!

Online presence is the biggest market for growth

Partnerships are our best friend

Canada, eh?

Additional Slides

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Number of Stores per State

Total stores # of Target stores # of Wal-Mart stores

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People per Store (Target and Wal-Mart)

Competitor Profiling

• Reaction from Amazon

• Reaction from Walmart

Painting Canada RedState or Province Population Wal-Mart

StoresPopulation-Store Density

Quebec 7,903,001 54 146352Alberta 3,645,257 35 104150

Manitoba 1,208,268 12 100689Ontario 12,851,821 138 93129

British Columbia 4,400,057 50 88001Saskatchewan 1,033,381 13 79491

New Brunswick 751,171 12 62598Nova Scotia 921,727 17 54219Maryland 5,828,289 57 102251

Plus 36 Target Stores, density in MD: 62670Far away from market saturation

Painting Canada Red

• Income Analysis–Household income in Canada provinces–Comparable to top 10 of U.S states– Example: Maryland

• Capacity Analysis• Financial Capabilities Analysis

State or Province Population Wal-Mart Stores

Population-Store Density

Quebec 7,903,001 54 146352Alberta 3,645,257 35 104150

Manitoba 1,208,268 12 100689Ontario 12,851,821 138 93129

British Columbia 4,400,057 50 88001Saskatchewan 1,033,381 13 79491

New Brunswick 751,171 12 62598Nova Scotia 921,727 17 54219Maryland 5,828,289 57 102251

Plus 36 Target Stores, density in MD: 62670Far away from market saturation

Capital Requirement

Free Cash Flow

•$11m •135•1485m

6 Provinces-135 Stores

•$1254m •3%•$1454m

Feasible