Target Corporation Case Study

Our group, upon much deliberation, decided to conduct our research on the Target Corporation. This decision was based partially on the interesting class presentation done by one of its Wisconsin store managers, and also a genuine interest in the company. We have all been to a Target store or one very similar in our lives. A great number of Americans shop there on a weekly or bi-weekly basis, purchasing anything from a loaf of bread to a flat screen television. The broadness of its product and the way they conduct their business is what first appealed to our group. Digging deeper, we found that Target is more than just convenient shopping and friendly service. They are a multi-million dollar corporation that hasn't forgotten about their community or their employees.

Target Corporation was founded in 1902, though it was not known as Target Corp. at the time. George Dayton opened Goodfellows in downtown Minneapolis, which remains at the same location today. In 1903 the company changed their name to Dayton Dry Goods Company. This name did not last long either as it was shortened in 1910 to The Dayton Company. In 1946 The Dayton Company began a tradition of giving 5% of their profit back to the communities and continues to do so today. In 1953 The Dayton Company adopted a new logo cutting out the word "company", and just having the word Dayton's as the new logo. In 1954 Hudson's was opened in Detroit Michigan by J.L Hudson who opened the store in Northland Center, the largest shopping center at the time. In 1956 Southdale was opened by the Dayton Company in Minneapolis; this signified the opening of the world's first fully enclosed two-level shopping center. The Dayton Company began to venture into discount merchandising with the opening of the first Target store in 1962. Surprisingly, it wasn't until 1967 that Dayton Corporation first had a public offering of common stock out on the market. The name of the Dayton Corporation changed yet again with the merger of the Dayton Corporation with the J.L. Hudson Company. These ties form the new Dayton Hudson Corporation (DHC). In 1971 revenues top $1 billion for the first time. Mervyn's is acquired in 1978 as the 7th largest retailer in the nation. Starting in 1979, Target stores are the number one revenue producer for DHC. In just over 10 years revenue goes from $1 billion in 1971 to over $5 billion in 1982. These numbers do not compare with the over $10 billion in revenue that the company reached five years later in 1987. One very important event was in 1990 when DHC acquired Marshal Fields. Four short years later revenue doubled yet again to $20 billion. In 1995 Target Stores launch the very first discount store credit card known as the Target Guest Card while at the same time opening the companies first Super Target stores. All this work paid off in 1996 when the company's revenues reached $25 billion. In 1999 DHC jumped into the e-commerce capabilities with the new website of target.com. This brings us to where we are today, as we watch the Target Corporation continue to increase revenue and attract new customers.

The Target Corporation has increased its revenue by a nice percentage for as far back as we could find. They have gone from a 1971 revenue of just over $ 1 billion to over $ 48 billion in 2003. Here is a chart that tracks the progress the company has made in just the last 7 years. Keep in mind that these numbers are in the MILLIONS of dollars.

Year Revenue Net Income

1998 $30,662 $970

1999 $33,702 $1,188

2000 $36,851 $1,264

2001 $39,826 $1,368

2002 $43,917 $1,654

2003 $48,163 $1,841

We also tracked the value of the Target Coroporation's stock, checking it once on April 7th and once on today's date, April 14th. It was listed at $50.74 per share as of 4/7/05 and dropped to $49.13 as of today. The Wisconsin store representative that came to class, unfortunately we couldn't remember his name, told us that it would be a good idea to invest in the Target corporation if one had the available funds. We discussed and came to the consensus

that indeed it would, since we see the company still actively trying to increase sales and productivity.

When it comes to social responsibilty, the Target Corporation really pulls its weight. As mentioned previously, Target has given 5% of its total profit back into their community for the last 59 years. They give to various charities and organizations across the nation. They give over $2 million a WEEK to education, the arts and social service, as well as local neighborhoods. They launched a program in 1997 entitled "Take Charge of Education", where 1% of all purchases in a Target with the Target Visa were donated, as well as 1/2% of all purchases anywhere else. Since this program was instituted, over $120 million has been raised to help fund schools.

Target funds more than just education. Target gave $1 million to aid the Tsunami Relief efforts through the Red Cross. They also support and donate generously to the men and women responsible for the protection of our country. The donate to military organizations regularly and have given money to support memorials such as The Wall That Heals and the WWII memorial in Washington D.C. Target also has a food donation program, where unsold groceries are given back to their respective communities. In 2003 they gave over 1.3 million pounds of food product to those in need. Finally, Target sponsors what they