TARGET CORPORATION: MAINTAINING RELEVANCE IN THE 21ST CENTURY GAMING MARKET Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Target Corporation: Maintaining Relevance in the 21st Century Gaming Market Case Study Solution

Introduction

Target Corporation is one of the top 5 retailers in the U.S which was founded in the year 1902. It was established in Minneapolis, Minnesota as the American’s original department store. At the time of its establishment, it only dealt with few products but as the time passed, it had started to create value through product quality, high service, and fashion flair. Target Corporation earned a revenue of $65 billion and was able to compete with many of the top department store companies such as Kroger, Costco, and Home Depot. However, the company had been trailed far behind from Wal-Mart as it had annual sales of $406 billion.

Target Corporation differentiated itself from its competitor not through effective prices but from excellent customer service. Target Corporation’s aim was to give the customer the best experience. It also focused on how products were grouped, located, displayed and communicated to attract both the customer and its vendors. Target Corporation was mainly a brick and mortar department store, however, it had diversified its business by developing websites, applications and others for making it into an online store.

The digital retailing had been negatively impacting on the Target Corporation product sales as many of the customers are switching on buying books, music, and movies through digitally which meant they directly dealt with the companies instead of going to the department stores in physically purchasing the product. It was forecasted that in few years the video games products would be mostly purchased through software such as downloading games online digitally instead of buying CDs and DVDs.

The Target Corporation also dealt with video games products such as new games CDs and also gaming consoles such as Xbox, PlayStation, Nintendo, Wii, and others. Out of all the electronic products, the profit margins on the gaming sector were much attractive than the others, however, the profit margin on the consoles was less. The Video Game sector overtook the electronic and entertainment market since the year 2000. Ever since the company’s growth relied on the sales of video games and gaming consoles, the three managers and president of online division decided to take three options which would improve sales on its gaming sector. The three options are the traditional brick and mortar, contemporary digital and the next generation hybrid.

Digital Retailing

In the last few years, technology has become essential for every company. Companies have to catch updated technologies so that they can compete effectively. In last few years, customers moved from the traditional method of buying to the digital method.

In the current era, there is an increasing trend towards the digital retailing as the customer prefers online shopping as opposed to land-based shopping, therefore, companies have to make their presence on the digital media so that customers can easily approach them.

Although in 2010 Target introduces itself in the digital retailing sector the company did not take effective steps to catch the appropriate market share, the company only offers prepaid iTunes and debit cards to compete with of its competitors like Walmart and Best Buy. Target Corporation should catch emerging opportunities like enabling TV Shows and Movies on their websites as this will bypass the cable and their fees, therefore, the chances of success are greater in catching this opportunity. Furthermore, as the company has its own website, therefore, the company can enhance this website in order to gain market shares. Moreover, due to the digital retailing the company can make its presence all over the world which will increase the profitability of the company, this will also diversify the company in different regions which will further reduce the risk of the company and in result improves the confidence of its shareholders.

It is the fact that retail stores like Target needs a huge workforce to fulfill customer’s desires after converting on digital retailing the need of workforce can be reduced which will help in saving the labor cost. Along with this after converting into the digital market company can close some of its stores because after digitalization customers can buy the products through the internet, therefore, there is no need to maintain traditional stores. The main risk of digitalization is that due to the digitalization the customer base of the company may increase significantly and due to increase in customer base the demands of the products will also be increased hence if company manage a huge amount of inventory then the risk of damages and obsolesce will be increased so significantly.

The company can use the search engines as a source of marketing this will improve its rating because this will lead to the company’s site being displayed on the screen when customer will search related websites and hence can increase the market share and the sales of the company. Along with this, it will also create awareness in the potential customers about the company and its products. This cheap marketing will help to reduce the marketing cost of the company and hence due to saving cost on different segments company can create aprice war in the market.....................

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