Target Corp. has had a rough year — they are still trying to recover from a massive data breach where millions of customers’ credit cards were compromised. On top of that, business has been sluggish compared to competitor Wal-Mart. In an attempt to push through, Target corp. has decided to eliminate several thousand jobs and regroup to come up with a new business strategy. Their goal is to cut costs by $2 billion over two years.
Brian Cornell, Chief Executive Offer, headed the plans for change at Target. The biggest change is that Target is now going to focus on a smaller number of brands. They feel this will help them optimize profits from a logistics standpoint. Additionally, Target can choose the brands that they believe will give them an edge over Wal-Mart in quality and price both online and in their retail stores. Their focus will be in style, kids, baby, and wellness. Grocery will also see major changes.
In addition to a complete overhaul of the products sold at Target stores, the corporation is cutting thousands of jobs across the country. This is mainly to save money. A large chunk of the job cuts will be made at corporate offices. No stores were slotted for closure because of the regrouping, but this is expected to come. Target has already closed all of their stores in Canada because they were not profitable.
In order to compete better in the market, Target wants to become more customer centric. This is reflected in their new company culture and the products they choose to sell. For instance, target will rely on demographic information to choose products at certain locations. The Hispanic population will be targeted more strongly in the future. Of course, only time will tell if Target’s new procurement strategy will pay off.