Target’s New Roadmap for Growth by Overhauling It’s SCM and Infrastructure

target-logoRetailers are faced with new challenges to meet the ever growing demands of the customers. New strategies are planned by the retailers with innovative initiatives to compete in the cutting edge competitive enviro. The Chief Executive Officer Brian Cornell of Target took over the reins of the reputed retail chain in July 2014. Prior to take over the Target, Brian Cornell served Amazon. Faced with the challenges of market trends in competitive retail business, Cornell has prepared a new road map for the growth of Target during March 2015 to be pushed in 2016. His objective was to revive the company which has been passing through a sluggish growth for several years. He planned to save on cost, reduce the workforce by cutting jobs and closing operations in Canada. Cornell aimed to cut the number of sizes and brands it stocks.

During 2015 itself, Cornell invested about $1 billion in upgrading its supply network and technology. The idea to catch up with the new strategy of the retail sector is to meet the requirements of the customers anytime from anywhere to anywhere. Cost considerations are not the primary concern to fulfil this goal. Cornell plans to invest $1.8 billion during 2016 to further upgrading the supply network and technology of Target. Addressing the meeting of analysts in New York, Cornell unfolded his plan saying “We laid out a bold multi-year transformation agenda last March and we’ll be laser focused on those initiatives in 2016.” After taking over the leadership role of Target in 2014, he focused on a handful of product range where Target felt to have an edge on the quality and price. Target plans to make a change in its sale strategy by increasing the online selling and selling on mobile. It is further planned to assort the items in stores. On the product side, Target will concentrate on the sale of in-house products and introduce additional organic products. The focus is on giving the customers a better quality products by selecting grocery with higher freshness. Cornell projected an increase in sales by 3 percent or more every year from the next year through its existing stores and online sales.

Results achieved

Strategic initiative taken by Cornell enabled Target to gain in many ways. It could reduce its stocks by 40 percent during holiday season in comparison the previous year. Sales were also more than the expected level. The online sales increased by about 34 percent. Target expects an increase in its profit in the range of $5.2 to $5.4 per share by the end of January 2017 against the market expectations of $5.16. Although total sales of Target are expected to be lower by 3-4% percent due to the sale of its pharmacy business but it is expecting an increase in sales by 1.5-2.5 percent during 2016. Due to the encouraging results in its performance, Target’s share value was closed at $81.10 with an increase by 0.17 percent.


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