Although new competitors are emerging throughout various markets and regions of the world, putting pressure on merchandise trends, TGT still competes on differentiation of merchandise at a high quality and service (See Exhibit 2).
Exhibit 2.
TGT is the second leading retail company with its large selection of general merchandise in 1,249 stores nationwide (including 119 Super Target Stores). Its subsidiaries, Mervyn's (266 stores), and Marshall Fields (62 stores) help to finance further expansions of TGT to new market segments nationally. With merchandise geared towards men, women, and children in the apparel, home, electronics, sports, toys, and entertainment departments, it's easy to see high quality brand names that people love. Although Target stores are the corporations' cash cow, it's moving towards some strategic analysis of what to do with its subsidiaries lagging revenues. Its stated mission is to strategically position each of there divisions to compete effectively in its respective segment. TGT also prides itself on giving back $2 million each week, to neighborhoods, schools, and social services. Along with the second highest market cap in the industry of $39.5B, it also trades on the NYSE as TGT and its current share price is around $44 (As of May 7, 2004).
As mentioned before, TGT stocks merchandise from various departments in its stores. It is abundantly apparent that suppliers force on TGT is highly in favor of the buyer. Since our stores have a higher market cap and higher profitability ratio then other retailers we do have some say in vendor prices and deals to us. By having a shear larger size of orders to buy we are able to command vendor reliability and good ethics. Both national and international vendors must plead their case to get a spot in a Target store so that they may be seen first and we have taken advantage of this by only having the best vendors out there to provide us with our merchandise.
