Target Express Case Study Analysis
Introduction
Target Express is operating as a delivery service company that has a huge focus on customer satisfaction. The company has maintained its status by providing on-time delivery services and by showing professionalism and a positive attitude. The company was originated in 1983 by the three businesspersons and they progressed the company as an established business over the years.
The revenues of the company grew over by 135 million throughout the last two decades. Target Express provides express parcel delivery services including same-day delivery, rush delivery, weight, and overnight delivery services. Target Express has experienced employees functioning over 50 depot warehouses. Target Express’ management is using a B2B marketing strategy.
The company’s two-thirds of revenues are expected to be generated by its UK overnight delivery services and the company’s high-profit margin of 56% is generated by its service called Express Bag. The company was acquired by the renowned firms Gresham Private Company and 3i in February 2000. The entire company was bought from the three entrepreneurs for 220 million pounds.
The new owners proposed that the B2C marketing strategy is more beneficial than the B2B marketing strategy. Consequently, they proceed the company in the fast-growing B2C market. Meanwhile, the company is reported to face a deficiency of financial resources and turnovers.
However, some mistakes are made by PE investors related to increasing profitability and the management of the company was also lacking efficient decision-making. Hence in this case the major problems of the company are highlighted and selective measures are analyzed to develop an understanding of potential aspects that can be used to convert the company from loss-making into a profitable one.
Problem Statement
Gresham Private Company and 3i acquired Target Express in February 2000. The company used the B2B marketing strategy which was replaced by the B2C marketing strategy. since then. To start a certain process company has to tackle these lacking financial resources and turnovers.
Situational Analysis
Challenges Faced by Target Express
Target Express faced numerous challenges in the year 2001, that impacted its financial performance and operational efficiency. The major challenges faced by the company are a lack of financial resources and inefficient management. The factors that led to these problems are discussed below.
Causes of Financial and Management Problems
Lack of Financial Resources
The financial resources were not sufficient to support the deliveries for Dell Corporation (computers), a new business line that Target Express had taken on. This deficiency of resources directed Target Express to financial troubles and restricted the company’s ability to operate efficiently.
Inefficient Management
The management team of Target Express was not operative in making strategic decisions and managing the processes of the company. This gave rise to poor operational consequences and financial clashes.
Inadequate Knowledge and Expertise
The management team did not have the significant knowledge and expertise to sail across the challenges the company faced, chiefly in the capacity of financial management.
Emphasis on Turnover Profitability
To make the company more profitable, private equity investors who acquired Target Express in 2000 chiefly focused on growing the company’s turnover, without making an allowance for the likely impact on the company’s operations.
Unsatisfactory experiences in the business-to-consumer market
Target Express had predominantly focused on the business-to-business market before putting forward into the business-to-consumer market by taking on Dell Corporation’s computer deliveries. This lack of experience and proficiency in the new market impersonated a challenge for Target Express.
Inverse logistics
Target Express did not have adequate experience in dealing with reverse logistics, required for the business-to-consumer market. This resulted in operational challenges and financial struggles. (Hjort, 2019). Overall, these factors contributed to the financial and management problems faced by Target Express in 2001 and required a strategic approach to discourse them.
Analysis of B2B and B2C Marketing Strategy
Initially, Target Express operated on a business-to-business (B2B) marketing strategy, which involved providing parcel delivery services to other businesses. This (B2B) strategy proved successful, and the company showed a turnover of £135 million when it was acquired by private equity investors.
However, the investors supposed that the business-to-consumer (B2C) market was more profitable than the B2B market, and decided to drive the company towards the growing and developing business in the consumer market. The company then took on the computer deliveries of Dell Corporation, to take advantage of the evolution of online shopping and consumer delivery services..............
Target Express Case Study Analysis (1)
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