Target Case Questions

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Apr 3, 2024

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Corporate Financial Policy MGT 6432 Case 1: “Target Corporation: Ackman Versus the Board” 9-109-010 (HBS Jan 2011) You are a buy-side analyst for a long-term institutional investor with a 3% stake in Target. Consider the following questions: 1. How does Target’s business model differ from that of Walmart? Evaluate management’s execution of strategy at both companies. 2. How are the business model differences reflected in Target’s and Walmart’s financial performance? How would you evaluate Target’s relative (i) operating; (ii) investment; and (iii) financial management to Walmart? What are the key metrics most useful to understanding their relative performance? 3. Do you think Ackman’s criticism of the board and demands for changes at Target are justified, given Target’s strategy and financial track record? Should a large shareholder determine the strategic direction of the company? 4. If adopted, how will Bill Ackman’s recommendations affect Target’s financial performance? Should Target adopt any of these recommendations? 5. Who should the investor have sided with – Target’s current board, or Ackman’s proposed slate? Why?
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