BUS510.30: Target Case StudyThe Target Corporation is one of the most recognizable brands on the market today and has seen significant growth since 1962, becoming the second largest retailer in the world (Cathcart, 2016). In this paper, I will discuss how the Target Corporation was able to achieve this growth by focusing on its review process by the Capital Expenditure Committee (CEC) and the fi
...[Show More]
BUS510.30: Target Case Study
The Target Corporation is one of the most recognizable brands on the market today and has seen significant growth since 1962, becoming the second largest retailer in the world (Cathcart, 2016). In this paper, I will discuss how the Target Corporation was able to achieve this growth by focusing on its review process by the Capital Expenditure Committee (CEC) and the five projects that are currently under review and rank them from one to five based on which project add the most shareholder value.
One of Target’s major goals is to open at least 100 new stores per year (Cathcart, 2016). Opening a store requires a high upfront investment and must be evaluated for the advantage that it creates for the Target brand. Value cannot be represented by discounted cash flow analysis such as net present value (NPV) and internal rate of return (IRR). Target is involved with a low margin business that is competitive which means it also has to evaluate qualitative items such as brand awareness, customer demographics, sensitivities, and competitive market place in the region. Currently, Target’s CEC is reviewing five projects that include building of four new stores and the remodeling of an existing store.
References
[Show Less]
