Case Study-Target

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University of Mary Hardin-Baylor *

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Management

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Apr 3, 2024

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Case Study 1 Case Study #3 Gannon A. Parker Student-Athlete at the University of Mary Hardin-Baylor

CASE STUDY 2 Case Study #3 Target Case Study As completely as possible, diagram the value delivery network for Target’s grocery business, from raw materials to finished consumer goods. Here is a diagram that outlines the value delivery network for Target's grocery business: Raw materials -> Food processing and packaging -> Distribution centers -> Target stores -> Consumer. Raw materials include agricultural products such as fruits, vegetables, grains, and meat that are used in food processing and packaging facilities. These facilities process and package the raw materials into finished goods, such as canned goods, frozen foods, and snack items. The finished goods are then shipped to Target's distribution centers, which are strategically located throughout the country. The distribution centers receive the products, store them, and then distribute them to individual Target stores. Once the products arrive at Target stores, they are stocked on the shelves and made available for purchase by consumers. Target stores are designed to provide a convenient and enjoyable shopping experience for consumers, with wide aisles, attractive displays, and helpful staff. Consumers then purchase the products and take them home to consume. Target's grocery business focuses on providing consumers with a wide variety of affordable and high-quality food products, including organic and specialty items. This value delivery network is critical to the success of Target's grocery business, as it enables the company to efficiently source, process, and distribute food products to consumers across the country. Is Target a producer, a consumer, or an intermediary? How about Shipt? Explain. Target is a consumer-facing retailer that operates both physical stores and an online platform to sell a wide range of products to end customers. Therefore, Target can be classified as a producer as well as a retailer or a consumer. As a producer, Target has private label brands such as

CASE STUDY 3 Up&Up, Archer Farms, and Good & Gather, which are exclusive to Target stores and online platforms. Target also sources products from various manufacturers and sells them to its customers. However, the majority of its revenue comes from retail sales to end consumers, which makes Target a consumer-facing retailer. On the other hand, Shipt is a delivery service company that acts as an intermediary between customers and retailers. Shipt partners with retailers such as Target, Costco, and CVS, and provides same-day delivery of their products to customers. Shipt does not produce or sell products directly; instead, it connects customers with retailers and facilitates the delivery process. Therefore, Shipt can be classified as an intermediary. An external reference to support this classification can be found on Investopedia, a financial education website. According to Investopedia, intermediaries "act as middlemen or intermediaries between producers and consumers to facilitate a transaction." Examples of intermediaries include delivery companies like Shipt and Instacart. In contrast, producers create or manufacture products, while consumers buy products for their own use. Discuss Target’s channel management procedures. Target's channel management procedures involve working closely with suppliers and distributors to ensure that products are delivered efficiently and effectively to Target stores and online platforms. Target's goal is to provide customers with a wide range of high-quality products at affordable prices, and effective channel management is a critical component of achieving that goal. According to Target's website, the company works closely with suppliers to ensure that products meet their quality and sustainability standards. Target has a Supplier Code of Conduct that outlines its expectations for ethical sourcing, environmental responsibility, and labor practices. The company also has a dedicated team that works with suppliers to optimize the supply chain and minimize waste. Target also uses technology to streamline its channel

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CASE STUDY 4 management procedures. The company has implemented an advanced supply chain management system that allows it to track inventory levels, monitor delivery times, and optimize product placement in stores. This system enables Target to improve efficiency, reduce costs, and enhance the customer experience. An external reference to support this information can be found on Supply Chain Dive, a publication focused on supply chain management news and analysis. According to an article on the website, Target has invested heavily in supply chain technology in recent years, including a $7 billion investment in its supply chain infrastructure. The company has also implemented advanced forecasting and inventory management systems to optimize its supply chain operations. Regarding the same-day delivery venture, why are Target’s partnerships important? Target's partnerships are crucial to its same-day delivery venture because they enable the company to expand its product offerings and reach more customers. By partnering with third- party delivery providers such as Shipt and Instacart, Target is able to offer same-day delivery of a wide range of products, including groceries, household essentials, and electronics. These partnerships also allow Target to reach customers in new markets and expand its customer base. According to an article on Forbes, Target's partnerships with delivery providers are part of a broader strategy to compete with Amazon and other online retailers. By offering same-day delivery, Target is able to provide customers with the convenience of online shopping while also offering the immediacy of in-store shopping. This strategy has proven successful, as Target's same-day delivery service has seen strong growth in recent years. Target's partnerships also enable the company to leverage the expertise and resources of its delivery providers. For example, Shipt has a network of more than 200,000 personal shoppers who can fulfill orders and

CASE STUDY 5 deliver products to customers. By partnering with Shipt, Target is able to tap into this network and provide customers with a reliable and efficient same-day delivery service. Will Target’s acquisition of Shipt result in growing revenues in the coming years? Explain. It is likely that Target's acquisition of Shipt will result in growing revenues in the coming years. By acquiring Shipt, Target gained access to a well-established same-day delivery network that has proven popular with customers. This has allowed Target to expand its product offerings and reach more customers, which should lead to increased revenue over time. According to an article on Retail Dive, Target's same-day delivery service has seen strong growth since the acquisition of Shipt. In the fourth quarter of 2020, same-day services grew by more than 300% year over year, and the service is now available to more than 80% of Target's customers. This growth has been driven in part by the COVID-19 pandemic, which has accelerated the shift to online shopping. In addition to driving revenue growth, the acquisition of Shipt has also helped Target improve its margins. By leveraging Shipt's delivery network, Target is able to fulfill orders more efficiently and reduce the costs associated with last-mile delivery. This has helped the company improve its profitability and compete more effectively with Amazon and other online retailers. Overall, it is likely that Target's acquisition of Shipt will result in growing revenues in the coming years, as the company continues to expand its same-day delivery offerings and reach more customers.

CASE STUDY 6 References Target. (2022). Grocery. https://www.target.com/c/grocery/-/N-5xt1k "Intermediary Definition." Investopedia. https://www.investopedia.com/terms/i/intermediary.asp "Target makes 'aggressive' investment in supply chain, digital as it looks to the future." Supply Chain Dive. https://www.supplychaindive.com/news/target-investment-supply-chain- digital/557909/ "Target, Walmart And Amazon Take Different Routes To Last-Mile Delivery." Forbes. https://www.forbes.com/sites/walterloeb/2021/02/11/target-walmart-and-amazon-take-different- routes-to-last-mile-delivery/?sh=7f8b8e2b7c08 "Target Same-Day Delivery Grew 300% YoY in Q4." Retail Dive. https://www.retaildive.com/news/target-same-day-delivery-grew-300-yoy-in-q4/596099/

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