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Target Corporation is currently located only in the Target Corporation is currently located only in the United States. There are 3 States (Alaska, Hawaii, and Vermont) that are currently void of Target stores (USSEC, 2011). They may benefit by expanding in these states as well as globally. As compared to its competitor, it has little or no international presence in the markets.
Unfortunately for Target, they have been the victim of numerous lawsuits in recent years. It has lost its focus from its markets and business goals in resolving lawsuits against the company. Its emphasis upon the quality of products makes its products expensive than its competitor Wal-Mart.
Trend and Comparative Analysis
Net Profit and Revenues
The net profit of the Target Corporation is more than the industry average and the also the main competitor of the target corporation Best Buy but in the as we go on to the year 2010 to the year 2012, the net profit of the Best Buy is increasing and it over taking the target corpations in terms of the revenues and the net profit.
The liquidity position of the Target incorporation is better than the industry average. This means the Target incorporation has more in pocket for the payment of the one dollar of the liabilities than the competitors of the Target incorporation have on average. The current ratio of the company is 1.65 which slightly higher than the industry average which 1.63. The quick ratio of the company is also more than the industrial average. So from this analysis we can say that the liquidity position of the Target incorporation is better that the average liquidity position of the competitors the Target incorporation.
The profitability of the Target incorporation is also good and it has increasing trend in the last five years. The company has 30.9 percent gross profit margin which is good but less than the industry average the reason for this is that some of the big players in the industry of the The Target incorporation has the biggest share in the market and they have well above the par profitability which make the industry average higher than it should be. But the The Target incorporation has better profitability than many of its competitors.
The asset utilization of the Target incorporation is also reasonable as we look into the asset turnover ratio, inventory turnover ratio, and the fixed asset turnover ratio of the Target incorporation. But if we compare these ratios of the Target incorporation with the industry averages this looks lower than the industry average again this is because of the share of the big players in the industry. The fixed asset turnover ratio of the Target incorporation is 2.1 which is good but still below the industry average.
The leverage that the Target incorporation management is applying in the business is positive as the financial leverage of the Target incorporation is 19.28 percent which is higher than the industry average.
ROI DuPont Analysis
Target has a wide presence in the U.S. market with over 1,700 stores in 50 states and District of Columbia. Due to its huge size, the retailer runs the risk of cannibalizing its own sales in the U.S. In 2010, Target’s comparable store sales increased by just 2.1% compared to a decrease of 2.5% and 2.9% in 2009 and 2008, respectively.  Even though the retailer returned to positive comparable store sales growth in 2010, the figure was low given compared to recession-hit 2009. The retailer attributes cannibalization as one of the important reasons for the slow growth in comparable store sales. Although the figure increased slightly to 3% in fiscal 2011, self-cannibalization still is an issue.
The Beta is an evaluation of the individual stock risk comparative to the overall precariousness of the stock market is considered based on very resonance finance theory which is the Capital Assets Pricing Model (CAPM).
Target= Covariance/Variance= 0.61
This study provided brief overview on the external environment analysis of The Target incorporation. The findings of the study suggested the The Target incorporation should focus on the following factors in order to excel its business and social image in the world Expansion of business operations to the other parts of the world. The The Target incorporation is currently conducts its business practices in US only. They should expand their business perspective and have a broader sense of a doing things. For this it should consider developing markets of Asia like India, China and Japan etc. these markets show great potential of expansion and profitability.
The Target incorporation is obsessed with the quality thing. Quality concern is a good thing but obsession is not. Target’s obsession of quality makes its products expensive as compared to that of its competitor. Therefore it must devise effective strategies to ensure high quality at economic prices.
- Bruce, Charley (July 9, 2013). Target fined $120,000 for ‘Spooky String, bizjournals.com. Retrieved on June 22, 2011 from http://www.bizjournals.com/twincities/stories/2007/07/09/daily20.htm