Target Company Background - Essay Example

In this situation, Target will learn that the marginal value of liquidity declines as company holds more cash by learning to use cash more efficiently and investing cash whenever possible (Beasley, 2006). When accounts receivable is low and accounts payable remains the same, investing in marketable securities and other short-term instruments could provide the company with a safety net. Due to these ideas, the company will become a more liquid, self-sufficient company. Plus, the CEO of the Target Company should be aware on how employees should be treated since he should be required to treat employees as a partner in his business. From there, there, he should use Emotional Intelligence, which is a theory that managers and CEO's understand their employees emotions. This helps them to communicate effectively and it makes the employees feel they are on the page. This approach generated loyalty and challenged the employees to make the business a success. Each employee should be offered stock options and given a portion of the profits as an incentive to keep working toward higher customer satisfaction. Motivation and communication are additional ways the CEO could create happy employees. Challenging employees allows him or her to be creative and generate new ideas or product lines that will increase sales and or customer satisfaction. Listening to employees opinions is vital to success. The people who work the frontline of any business will have ideas on how to better the processes. Some companies used an approach uncommon to most CEO's; walking around the store to meet and greet the associates and customers. This approach allowed the consumers the opportunity to tell him how well he or she liked the store and offer suggestions for change. The associates liked this approach because it made him an approachable CEO who was willing to listen to employees and customers. In this report, it is apparent that the company should use strategic planning in order to deal with the issues since it determines the overall direction and goals of the organization. Consequently, strategic planning influences numerous aspects of the organization, including what, In strategic planning, a) Products and services will be provided by the business and how those products and services will be designed b) Organizational design and roles are needed by the organization. c) Performance goals are established for positions throughout the business. d) Board committees should be developed (in the case of corporations. e) Resources are needed to reach those goals, and consequently, how much money is needed to procure those resources -- ultimately, the goals determine the content of various budgets ("Develop strategic plan" 2007). Competition from similar products, changing technology and increasing costs all play their part in putting pressure on firms to keep rethinking and expanding. Mergers are more and more frequent and many businesses have expanded to become global organizations. But if growth is sometimes the only option it is also very often a risky one. Expansion demands investment of time, money and people and has to be carefully managed to bring the desired returns. Though there is a way to increase the odds of success: simple and effective communication in all directions. For the fiscal February period, reported comparable store sales decreased 4.1%. Just over half of this sales performance was due to a decrease in average transaction size with the remainder due to a decrease in comparable store transactions. Comparable store sales in February 2008 increased 0.5%. The current month's sales release quotes Gregg Steinhafel, Chairman, President and Chief Executive Officer of Target Corporation, as saying, "February sales were in line with our planned range for the month as our sales results continue to reflect the significant economic challenges facing our guests (Target Corporation Pre-recorded February 2009 Sales Conference Call - Final 2009). At the heart of Target's growth is the unique culture that has been built on the business philosophy was based on the simple idea of making the customer No. 1. They believed that by serving the customer's needs first, his business would also serve its associates, shareholders, communities and other stakeholders. Within this company, outflows exceed inflows and the shortfall is being made up by a credit line that is maxed out. Along with that, an interest that fluctuates depending on the amount borrowed is also an issue for the company, which is extremely costly. The company needs to look at working capital management as an opportunity to better serve its stakeholders and improve its current economic standing. The first step for the company is to identify the issues and recognize the opportunities that exist for the company, which would be to meet short-term and long-term financial obligations through the development of effective working capital management, cash management and the revision of its present credit policy. To be a successful company, the Gap company considered group thinking and conformity so that everyone can work together. Working on a team can be very rewarding and exciting, but also frustrating if some of the team member are not committed to the team. Building a high performance team requires time, collaboration and most importantly communication. A team is described as a small number of people with complementary skills who are committed to a common purpose and approach for which they hold themselves mutually accountable. Group thinking and conformity focuses on the interpersonal transaction between managers and employee. Leaders are seen as engaging in behaviors that maintain a quality interaction between themselves and followers. The company is lacking group thinking and conformity because no one is willing to work together. In order to be an effective company, they have to conform as one so that productivity can be increased to make high profits. This effective form of communication and teamwork allowed people in the park with no problems because the team was organized and knew the proper procedure. A successful team also requires active listening, empathy, and being truly committed. By taking on a team effort, "suppliers of products to general merchandise stores include manufacturers and distributors. Large companies buy from a large number of suppliers, ensuring that they are not reliant on any one particular supplier. Companies may have long-term relationships with suppliers, although there are generally few long-term contracts. Supplier power may by weakened by the fact that players usually have substantial negotiating power" (Global General Merchandise Stores 2009). When looking at changing a culture in a company, one can view it as a positive or negative change. The change of culture was positive when things went ass they had planned. Stock soared and rose after the second quarter, which is clear the company is not struggling to break above the flat-line. They found that to maintain and improve their technology more funds and resources were needed. Also the company gained thousands of customers due to satisfaction and service improvement for existing technology. The change in culture did not caused the employees more stress then necessary. According to McShane and Von Glinow (2005), organizational culture is a basic pattern of shared values, assumptions and beliefs considered to be the correct way of thinking about and acting on problems and opportunities facing an organization. This change in culture caused employees to be at ease and the beliefs and attitudes started to change about the future of their company. They were sure about the future of the company because many employees were reconsidering staying at the company. Overall, the change of environment caused an attitude change for employees in the company. Leadership can make or break any company based on their decisions and how they approach the employees they represent. It is apparent that consumers' environment influences their decision making and behavior no matter what the product consist of even if it comes general marketers stores. "Proportion of organic areas increased significantly in recent years caused not only by government subsidies but by growing demand and by more widely accepted 'environment consciousness'. Areas in concern expectably show further dynamic growth in near future. Described tendency did not fail to have its impacts on Hungary. In December 2002, prognostics showed 105,000 ha which is, of course, an estimation (Biokontroll Hungaria Plc controls 103,672 ha). It means 1.7% of total agricultural land has already been turned into organic land. From there, other studies show changes of organically cultivated area and number of producers from 1996 (Szente, Mth, Fejes, Szakly, 2002). From there, consumers influences the market of general stores food because of their interest and needs during a period of time. From there, in order to create an opportunity for the Target Corporation to influence consumers, marketers have to appeal to their personal preference, which can be affected by income and structure of the class. Marketers should consider targeting small towns where people take their time shopping and have it to observe what they are buying. In order words, they should target rural areas where people have the time to understand what they are buying. A consumer's behavior is also influenced by social factors, such as the consumer's small groups, family, and social roles and status. Because these social factors can strongly affect consumer responses, companies must take them into account when designing their marketing strategies. Groups - a person's behavior is influenced by many small groups. Groups which have a direct influence and to which a person belongs are called membership groups. References groups are groups that serve as direct or indirect points of comparison or reference in the forming of a person's attitudes or behavior. Marketers try to identify the reference groups of their target markets. The importance of group influence varies across products and brands, but it tends to be strongest for conspicuous purchases.(MODEL OF CONSUMER BEHAVIOR) Culture is the situational factor has the most indirect impact on individual buying decisions because it is as set of symbols and artifacts created by a society and handed down from generation to generation. From there, customer segmentation is important understanding consumer behavior so that marketers can know what they need to appeal to each consumer's social class. Since customer segmentation is at the root of CRM, each business that performs CRM is ready to address the bigger question of deploying unique messages to the right customer at the right time. The booming CRM industry has provided the in-depth customer data that is vital for successful direct mail campaigns and integrated channel strategies focused on keeping and growing profitable customers. Data can become customer insight. Customer insight can become action. Action can grow the value of customer base and grow net income (Gaffney, and Dobrow 2007). "A CRM strategy should analyze customer segments and make the appropriate determinations on whether each segment is profitable for their business and how to affect the purchase patterns of the segment so the business can experience the profitable attributes of CRM; loyalty purchasing, cross selling, up selling, etc. Direct Mail fits perfectly into the customer communication strategy for customer segmentation. With variable printing and data rich files a company can use their intelligence and print relevant Direct Mail that will move customers toward the purchase decision. Additionally customer communications should also enable the company to learn more about the customer over time so that it acts upon that information to better meet customer needs in the future. This is building "learning relationships" with customers, a fundamental CRM concept. A feedback loop must be built into the process so that the company can continually learn more about customers and their needs in order to improve the relevancy of its communications and offering in the future. Mail can provide the channel for this feedback, both in direct correspondence and by sending customers to web site, 800 #s or whatever channel they prefer"(CRM 2007). With the Relationship Marketing, the organic food market should have Database marketing with a friendly, more intelligent face for their customers. It is known that many database marketing types just use the database as a list and mail things to it. However, relationship marketing implies a deeper knowledge of the customer, which will become very profitable for the company because the customers will very satisfy. This is because there is some kind of give and take between company and customer (Relationship Marketing Program). Customers have the ability to make a choice about what they want to purchase. Customers want excellent service from the companies that they patron and they want competitive pricing. This may appear to them that the company is weakening or is inconsistent. By communicating goals and strategy early on, the organization pays respect to customers and employees, and deals openly with uncertainty and doubt. (Baron, A. p. 13, 2006). In this paper, it has been discussed in order for marketers to understand consumer behavior, they must design a relationship marketing program that is customized to their needs. Even though Relationship Marketing is not commonly used anymore, it has become a dominant form of marketing theory since it has evolved from other forms of marketing and has countless benefits for businesses that use the relationship strategy. It can be adopted by technology and media making. The focus of marketing shows a considerable shift in thinking. From there are different situational factors that influence consumers. In order for marketers for Target to understand the situational factors surrounding consumers, they must research a program prior to implementation to ensure it will be successful, and to determine any potential failures. Companies realize a successful process at another company does not guarantee the program will work in every business model. Research is a diligent and systematic inquiry or investigation into a subject in order to discover or revise facts, theories or applications. Benchmarking is a way to compare how one company does business with another in the same industry. Benchmarking occurs when a company wishes to develop new plans and ideas and wishes to see how other like companies has been successful. Benchmarking requires many hours of research to determine the risks associated with implementing the processes and removes the stigma of "it has always been done this way" while allowing for a variation to problem solving. It uses a review of best practices and though costly, the benefits will outweigh the costs. By using benchmarking practices, companies can implement new and improved business practices and develop plans which will help them succeed. In order to understand the situational factors of consumers purchasing preference, group thinking and conformity must be considered so that everyone can work together. Group thinking and conformity focuses on the interpersonal transaction between managers and employee. Leaders are seen as engaging in behaviors that maintain a quality interaction between themselves and followers. The company is lacking group thinking and conformity because no one is willing to work together. In order to be an effective company, they have to conform as one so that productivity can be increased to make high profits. - Assess: The first phase of initiating change is to define the starting point. It is important to examine those parts of the business that can be measured (such as quality metrics and revenue figures), but it is also important to take into account those aspects of your culture and values that cannot be easily measured. Getting employees involved at every level is important throughout the change process. However, their involvement at this stage is particularly critical, so that management does not end up subscribing to false beliefs based on strong egos or emotions (Frazee 2004). - Describe the Ideal Outcome: The next step in the process is to describe a vision of the future for the company. Most companies describe their vision in terms of future market share or revenue growth. A vision can be much more powerful for every individual in the organization if it extends beyond such competitive measures. Visions that align with each employee's sense of purpose will begin to bridge the gap between organizational success and employee empowerment (Frazer 2004). - Determine Ways to Achieve the Ideal Outcome: Create several methods for accomplishing your objectives. At this point, do not spend time evaluating each idea, because even bad ideas can generate fantastic ones. Precious little time is spent using our creative selves in the business world. Unleashed creativity and the ability to consider new ideas can result in success stories like eBay, Tivo and Amazon.com (Frazee 2004). - Create an Implementation Plan: After the healthy debate has taken place and the best ideas have emerged, it is time to create an implementation plan. The plan should consist of goals that are specific, measurable, realistic, have a deadline and establish individual and team ownership and accountability. Each department in the company should set individual plans that align with the overall goals, so that each resource in the company is harmoniously focused on achieving the same overall results (Frazee 2004). - Develop Contingency Plans: Having a solid plan can be a real asset in achieving your goals. However, all too often, things go wrong that were not anticipated during the planning process. Precious time can be lost as a new plan must be created to deal with new obstacles. We have the capacity to predict some of the aspects of our plans that could go wrong and determine ways to handle a change in course down the road. These plans do not have to be as detailed as your implementation plan, but they can serve as a tremendous guide, should things go awry in your initial plans (Frazee 2004). - Establish Mechanisms for Measuring and Rewarding Success: In order to execute a plan, you must determine how you will know if you are succeeding. Companies tend to fall into one of two extremes when it comes to measurement. Either they are led by analytical individuals and measure down to the most esoteric of statistics, or else they do not even bother to measure the most fundamental of success metrics. For each of your goals, you should have a clear, yet simple, way of assessing if you are hitting the mark (Frazee 2004). The company has been profitable, which has created a huge dip in sales and revenue. It has been discovered that with this growth in technology, people have been able to compete with in the industry. For example, the typical companies are not the only ones that are fighting for the market. Target decided that this type of competition has decreased in value of stock prices and has made the company look into different methods to increase profitability. Considering these factors, Target must change its business model to allocate for modern growth. It is clear that if a manager cannot bring people on board with the company's vision then they will be required to take the necessary actions to ensure the company stays on track in the business transformation by involving the employees. Along with that, it is necessary to have strong leadership when competition is intensified. Therefore, companies need strong leadership so that they have the ability to be innovative enough to set themselves apart from their competitors and maintain a successful and stable structure company, which benefits the employees and the overall company. Read More