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Financial Analysis of a company

Student : Target was first established in 1902, but its original name was Goodfellow Dry Goods. George Draper Dayton then changed the name to Target (Target Corporation Company Profile). By the 1920s Target started to expand into other areas (Target Corporation Company Profile). The Target Corporation has now grown into the fourth-largest retailer in the United States. Target is also the second-largest discount retail store, with Walmart being the first (Target Corporation Company Profile). Target has continued to offer innovative, high-quality, eco-friendly zero waste products that todays customers demand.

The first strength is that they offer innovative products, and these products are of high quality. Target sells its own brands, but they also work closely with suppliers around the world to ensure they provide the best products possible. As they work with different suppliers, those suppliers have a long list of products which buyers must review and in turn commit to buying. The second strength for Target is price matches. Target does a good job to make sure products in the store match with offerings online. If a consumer finds an item that is cheaper online than in stores, Target will match the price and sell it to the consumer for a cheaper price. Also, if a consumer buys something and that same item is cheaper online, the consumer has fourteen days after the purchase to go back to Target for a price adjustment. The third strength that Target has is financial services. Target has several options which are: Target Red Card, Target Visa, The Target Card, and if purchasing online, Affirm. These payment options are open to all customers and can be used at any time. The consumer can also sign up for any of these financial options any time they shop at Target. If a customer wishes to sign up for the Target Red Card, Target Visa, or Target Card it is a simple process to check out with a cashier rather than using self-checkout.

Weaknesses: Target has several weaknesses. One of their largest weaknesses is their e- commerce department. Since the beginning of the COVID 19 pandemic, Target has done a good job of increasing its online sales. In the year 2020, their sales increased by 20.5% in just the 4th quarter. Before this time, Targets online sales were between 6.5% and 13.1%. Target needs to take more of an interest in creating a plan to grow online sales and have better pricing. Pricing is important because customers will go to one of their competitors if they find a better price for an item with comparable quality. With a lack of e-commerce comes a lack of marketing and campaigning. If Target began to view e-commerce, marketing, and campaigning as equally important as their brick and mortar retail stores, they could make significant inroads in the e-commerce arena and expand their sales and profits. Another weakness that Target has is its pricing. The company needs to start considering what competitors charge for items of equal value. If an in-depth study of competitor pricing was done, this could position Target for much more online sales. As with marketing and campaigning, competitor reviews of pricing would expand growth and increase profits for the company.

Opportunities: Target has many opportunities to expand and grow. One of these opportunities is to expand internationally. If Target put together a research team and a committee for international expansion, the company would see growth in this important market. After researching markets, they should start with a trial store in a target country based on their market research and if they do well, could slowly expand into other countries.Target has tried to expand into Canada in the past, but had to close the business due to consumers not having enough interest in the store. A good committee and research team could select a trial region for Target and therefore would be better able to predict future success. It is important for Target, if they grow internationally, to be more aware of regional needs and demands of consumers in the selected area. This would help Target become more of a household name. Target has done a pretty good job against its competitors to bring in eco-friendly products, but they can still do more to expand this. More families are asking for eco-friendly products because it is safer for children and pets. One of the strengths of Targets eco-friendly products is zero waste. Along with their eco-friendly products and zero waste products, Target has also introduced budget-friendly products. These budget-friendly products are very advantageous for low-income and middle-class customers. People who do not have excesses of disposable income want good quality products but do not want to overspend on these products. Target has done a good job of introducing products that are on the less expensive side without sacrificing the quality that the wealthier customers demand.

Threats: One of Targets biggest threats recently was COVID 19. Due to COVID, Target lost some customers due to them not having the financial means to buy. Target lost some lower-class families, but they also gained new customers that were once wealthy. Even though COVID was a threat to Target, they were able to stay open and to adjust to new and frequently changing CDC rules. Their continued efforts to keep customers safe while shopping at a local Target were successful .Target helped to keep the middle-class customers stay afloat and able to afford the quality of products they wanted. Another threat that Target has faced is the increase of government taxes and increasing interest rates. This can affect Targets growth rate by consumers not being interested in paying higher taxes which can hurt the corporation and consumer growth. With this comes inflation. Consumers do not want to pay higher prices for the same quality of products they were getting before. Inflation and rising interest rates lead back to e-commerce. Amazon is a big competitor for Target. Why would a consumer want to buy the same product at Target for a higher cost when they can get that same product on Amazon for less money, and in a larger container. Target needs to continue to provide their customers with budget-friendly products. If Target cannot do that, they will lose a large majority of their customers to their competitors. This is a critical time for Target to see how their e-commerce will step up and become a larger source for their financial growth.