Target lost Its Sway Because Tar-zhey No Longer Drew the Customers Target became known by consumers as Tar-zhey, the retailer of cheaper but 'chic' products. The rm offered a step up in quality goods at a slightly higher price than discount retailers such as Walmart, but was targeted below major, rst line retailers such Macfs and Nordstrom. Additionally, it promoted its stores to offer onestop shopping with clothing, toys, health products, and food goods, among other products. For many years, Tarzhey \"hit the bullseye" and performed well serving this large niche in the market. But the company took its eye off the target and began losing market share {along with other poor strategic actions]. The rst major crack in the ship appeared with theannou ncement ofa massive cyberattack on Target's computer system that netted customers' personal information. The attack exposed customers idata on To million customers] to potentially substantial losses due to credit card fraud. Not only was this a public relations disaster, it drew a focus on Target that identied other problems. The "light" on Target showed that the strategic decision to enmr the Canadian market in a major way {133 stores across multiple geographic areas} was failing. Finally, the careful analysis showed that Target was losing customers to established competitors and new rivals, especially Internet retailers {e.g., Amazon.com]. Target's marketing chief stated that "it's not that we became insular. We were insular.\" This suggests that the firm was not analyzing its environment. By allowing rivals, and especially newer Internet competitors, to woo the company's customers, it lost sales, market share, and prots. It obviously did not predict and prepare for the signicant competition from Internet rivals. Competitors were offering better value to customers {perhaps more variety and convenience through online sales]. when combined with the loss of consumer condence berause of the massive hack of personal customer data, Target's reputation and market share were simultaneously harmed. The unparalleled failure of the Canadian operations within a very short time [two years} also showed a lack of market understanding likely stemming from the failure to analyze the market. It is probable that all of the problems Target was experiencing were transfened to its Canadian operations as well. In addion, it failed to attract customers from its major Canadian retailers, such as Loblaw Companies, Canada's largest grocer that recently introduced low-dost clothing boutiques. Costco and walmart were also well-established in the Canadian market. Target was unable to differentiate the value it provided from the established retailers in Canada. It also experienced problems in its Canadian supply chain suggesting again that it did not fully understand the business markets in Canada before entering the market. Because of all of the problems experienced, Target's CED resigned in May 2014. A new CEO, Brian Cornell, was hired three months later. He was a top executive at PepsiCo and had experience heading Sam's warehouse for walmart as well. Cornell is the rst CEO to be hired from outside the company, and most of his experience is from outsidethe industryas well. Since arriving on the job in August of2014, Cornell has started making changes. For example, he is trying to regain Target's \"chic\" image by focusing on fashion, infant's, children's, and health departments to increase customer traffic and sales. The focus in foods is more upscale, more organic food, specialty granola, cof fee and tea, wine, and beer. Sales exceeded the forecast in the fourth quarter of 2014 with the highest growth in three years. In January 2015, Cornell also closed all Canadian stores and thereby laid off 12,600 employees, a painful but necessary move. Finally, he announced another layoff of close to 2,000 employees in March 2015. Most of these employees will come from the main ofce with the intent to make Target more nimble and agile. Interestingly, Cornell did not take the large corner suite accorded to the former CECJIs but instead chose a smaller office near the company's market data collection site. There a staff of ten employees gather information from social media sites such as Pinterest, Facebook, and Twitter and from television news from nine large TV screens. The CEO stops by every morning to learn the latest information. These acons alone suggest the importance he places on gathering and analyzing data on the market and competors' actions. 1. Enumerate and define the facts of the case. 2. Define and discuss the different strategies mentioned in the case. 3. What are the key learnings from the case? 4. What strategic implication did you learn from the case? How can such a strategy be applied in another business strategy, for example