CASE 28
Target Corp’s Tarnished Reputation: Failure in Canada and a
Massive Data Breach
I. CASE ABSTRACT
Target is a US mass–market discount store catered to shoppers seeking
high–quality products. In a crowded market, Target was eager to grow its
business outside the US and online. It expanded to Canada in 2011 by
acquiring a failed retailer. A move that seemed prudent actually saddled
Target with inconveniently located stores and strained its logistics and
Decision Date: 2015 FY Sales: $72.6 billion
FY Net Loss: $1.6 billion
II. CASE SUBJECTS AND ISSUES
CEO Transition First Mover Advantage
Strategy Formulation Competitive Advantage
III. STEPS COVERED IN STRATEGIC DECISION–MAKING PROCESS
IV. CASE OBJECTIVES
1. To discuss Target’s challenges surrounding global expansion.
CASE 28
Target Corp’s Tarnished Reputation: Failure in Canada and a
Massive Data Breach
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2. To discuss Target’s business level strategy with regard to online
shopping.
V. SUGGESTED CLASSROOM APPROACHES TO THE CASE
1. This is an excellent case for instructor–led discussion.
2. This is an excellent case for an exam or written case analysis.
VI. DISCUSSION QUESTIONS
1. How did Target compete with online giants Amazon and WalMart?
2. Why did Target fail in Canada?
3. How was Target effected by the Great Recession of 2008?
VII. CASE AUTHOR’S TEACHING NOTE—Not Available
VIII. STUDENT STRATEGIC AUDIT
CASE 28
Target Corp’s Tarnished Reputation: Failure in Canada and a
Massive Data Breach
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I. Current Situation
A. Performance
• History
o George Dayton founded Fairfield Language Technologies
(1902).
• Economic Performance
o Sales increased $1.34 billion (2015)
• Rankings and Accolades
o 2012
▪ Fortune magazine ranked Target No. 25 on its list of
“World’s Most Admired Companies.“
▪ DiversityInc magazine ranked Target No. 30 on its list
of “Top 50 Companies for Diversity.“
▪ Working Mother Media ranked Target among its 2012 Best
Companies for Hourly Workers.
▪ The Hispanic Association on Corporate Responsibility
gave Target a score of 70 on its Corporate Inclusion
Index (HACR CII).
CASE 28
Target Corp’s Tarnished Reputation: Failure in Canada and a
Massive Data Breach
▪ Newsweek Magazine ranked Target No. 85 out of 500 on
its U.S. Green Rankings 2012.
▪ Target was named a member of the United States
Hispanic Chamber of Commerce 2012 Million Dollar Club
for its commitment to supplier diversity and Hispanic
Business Enterprises.
o 2013
▪ Target ranked No. 5 on the 2013 list of “America’s 25
Most Inspiring Companies,“ based on a survey conducted
by Performance Inspired, Inc.
▪ The Human Rights Campaign gave Target a score of 100
on its 2013 Corporate Equality Index.
▪ The National Association for Female Executives named
Target one of the Top 50 Companies for Executive Women
for 2013.
▪ The Hispanic Association on Corporate Responsibility
gave Target a score of 80 on its Corporate Inclusion
Index (HACR CII).
▪ Corporate Responsibility Magazine ranked Target No. 62
on its list of “100 Best Corporate Citizens.“
CASE 28
Target Corp’s Tarnished Reputation: Failure in Canada and a
Massive Data Breach
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▪ The Chronicle of Philanthropy recognized Target as No.
9 on its list of most generous companies, according to
its annual corporate giving survey.
o 2014
▪ No. 3 America’s 20 Most Inspiring Companies.
▪ 100 percent Corporate Equality Index by Human Rights
Campaign.
▪ No. 29 World’s Most Admired Companies (Fortune
Magazine).
▪ DiversityInc magazine ranked Target No. 22 on its list
of “Top 50 Companies for Diversity.“
▪ The Hispanic Association on Corporate Responsibility
gave Target a score of 85 on its Corporate Inclusion
Index (HACR CII).
▪ The Council of Urban Professionals presented Target
with its Corporate Diversity & Inclusion Leadership
Award.
▪ The League of American Bicyclists named Target a
Platinum Bicycle Friendly Business.
▪ Corporate Responsibility Magazine ranked Target No. 61
on its list of “100 Best Corporate Citizens.“
CASE 28
Target Corp’s Tarnished Reputation: Failure in Canada and a
Massive Data Breach
Club for its commitment to supplier diversity and
Hispanic Business Enterprises.
o 2015
▪ Fortune magazine ranked Target No. 48 on its list of
“World’s Most Admired Companies.“
B. Strategic Posture
1. Mission
a. We fulfill the needs and fuel the potential of our guests.
2. Objectives
a. Create a more customer-centric experience.
3. Strategies
a. Offer differentiated products at discount prices.
i. Design partnerships
ii. Exclusive products (e.g. Justin Timberlake CD)
iii. Price matching
iv. RedCard discounting of 5 percent
b. Create a shopping experience like no other—be the upscale
discount retailer.
i. Better designed, more spacious stores
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Target Corp’s Tarnished Reputation: Failure in Canada and a
Massive Data Breach
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ii. “Team Member“ treatment of all employees
iii. Development opportunities
f. Develop a strong omnichannel presence.
4. Policies
a. Blend teamwork amongst all levels of the corporation.
b. Continue to give back to the community (locally and
II. Corporate Governance
A. Board of Directors
• Twelve embers
o Eleven external
▪ Roxanne S. Austin (Austin Investment Advisors)
▪ Douglas M. Baker, Jr. (Chairman/CEO Ecolab Inc.)
• Past CEO Ecolab Inc.
• Target Corporation Board since 2013
▪ Calvin Darden (Chairman Darden Putnam Energy &
Logistics, LLC)
• Long-term, top level management in real estate
development
CASE 28
Target Corp’s Tarnished Reputation: Failure in Canada and a
Massive Data Breach
• Target Corporation Board since 2015
▪ Donald R. Knauss (Former Executive Chairman The Clorox
Company)
• Target Corporation Board since 2015
▪ Mary E. Minnick (Partner Lion Capital LLP)
▪ Derica W. Rice (EVP/CFO Eli Lilly and Company)
• Former SVP/CFO Eli Lilly and Company
• Target Corporation Board since 2007
▪ Kenneth L. Salazar (Partner WilmerHale)
• U.S. Secretary of the Interior
• U.S. Senator—Colorado
o One internal
▪ Brian C. Cornell (Chairman of the board/CEO Target
Corporation)
• CEO PepsiCo, Inc
• Yes, they all own a large amount of stock (some more than
others).
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Target Corp’s Tarnished Reputation: Failure in Canada and a
Massive Data Breach
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B. Top Management
o Eleven members
o Brian Cornell CEO
o John J. Mulligan EVP/COO
o Timothy R. Baer EVP/CLO/Corporate Secretary
o Casey Carl Chief Strategy & Innovation Officer
• All Members collectively share these talents:
o Bilingual
o Multilingual
o Global Business leadership
o Corporate Security
o Marketing
III. External Environment: Opportunities & Threats
A. Economic
o Opportunities and Threats (both)
▪ Distribution channels
o Threats
▪ New entrants
CASE 28
Target Corp’s Tarnished Reputation: Failure in Canada and a
Massive Data Breach
o Opportunities
▪ Product Design
▪ Product Development
• Technological
o Opportunities & Threats (both)
▪ Pricing
▪ Promotion
▪ Inventory Management
o Threats
▪ IT innovation
▪ Competing to gain competitive advantage in the
marketplace.
o Opportunities
▪ Online advertising
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Target Corp’s Tarnished Reputation: Failure in Canada and a
Massive Data Breach
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• Political/Legal
• Threats
o Data breaches
• Opportunities
▪ Internally and externally
• Sociocultural
o Opportunities/Threats (both)
▪ Glass ceiling theory
o Threats
▪ Trends that bring spending to other stores or
competitors.
B. Task Environment
– Threat of new entrants (low)
o High entry barriers
– Bargaining power of buyers (high)
o Buying products from another retailer
CASE 28
Target Corp’s Tarnished Reputation: Failure in Canada and a
Massive Data Breach
– Rivalry among competing firms (high)
o Competitors are of equal size or higher
C. Summary of External Factors
See EFAS Table
IV. Internal Environment: Strengths and Weaknesses (SWOT)
A. Corporate Structure
• Centralized corporate structure
o Organized on the basis of functions at corporate level:
• Structure is clearly understood by everyone in the corporation
(implied but not stated by case).
• Structure is not consistent with Target’s objectives, strategies,
policies, and programs.
B. Corporate Culture
• Values
o Positive employer/employee relations for positive
employee attitudes
o Diversity
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Target Corp’s Tarnished Reputation: Failure in Canada and a
Massive Data Breach
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o In team membership, supply chain, and the communities
Target operates in.
o Strong community relations through corporate giving.
o 5 percent of its income to local groups.
• Compatible with current objectives, strategies, policies,
and programs.
C. Corporate Resources
• Marketing
o Overview
▪ Strategy: attract the whole family
▪ Slogan: “Expect More. Pay less.“ Ties in with mission
clearly.
o Advertising
▪ 2014: $1.7 billion (increased by $0.3 billion from
▪ Perks (S)
• Free WiFi in store
• In-store pickup of online orders
• In-store concierges
▪ On-line presence (S)