Case Study Description of Target Corporation Rewards Program, June 2010
It was May 2010, and the results were in. For Doug Scovanner, CFO of Target Corporation, there was good news, and there was bad news. The recent trials of a new REDcard Rewards Program in Kansas City, Missouri, and San Antonio, Texas, had yielded mixed results. In San Antonio, the new rewards program offered customers a 3% discount on Target purchases when using a REDcard, but it had not produced a meaningful increase in sales in that market. On the other hand, the trial in Kansas City, with a 5% discount on Target REDcard purchases, resulted in a significant sales increase. In fact, if the results were applicable to the rest of the chain, this program would add 1% in comparable-store sales in the fourth quarter of 2010 and provide an even bigger boost in 2011. There were risks involved in the decision-without incremental sales, the 5% discount would hurt the company's bottom line. Opting for more testing would raise its own set of questions: Would the company learn a lot more? And what about the opportunity costs of waiting to roll out the program nationwide? Scovanner needed to decide then if the program should be in place for the fall and holiday seasons.
Swot Analysis of "Target Corporation Rewards Program, June 2010" written by Robert M. Conroy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Redcard Scovanner facing as an external strategic factors. Some of the topics covered in Target Corporation Rewards Program, June 2010 case study are - Strategic Management Strategies, Strategy and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Target Corporation Rewards Program, June 2010 casestudy better are - – central banks are concerned over increasing inflation, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions,
increasing transportation and logistics costs, increasing commodity prices, etc
Introduction to SWOT Analysis of Target Corporation Rewards Program, June 2010
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Target Corporation Rewards Program, June 2010 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Redcard Scovanner, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Redcard Scovanner operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Target Corporation Rewards Program, June 2010 can be done for the following purposes –
1. Strategic planning using facts provided in Target Corporation Rewards Program, June 2010 case study
2. Improving business portfolio management of Redcard Scovanner
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Redcard Scovanner
Strengths Target Corporation Rewards Program, June 2010 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Redcard Scovanner in Target Corporation Rewards Program, June 2010 Harvard Business Review case study are -
Sustainable margins compare to other players in Finance & Accounting industry
– Target Corporation Rewards Program, June 2010 firm has clearly differentiated products in the market place. This has enabled Redcard Scovanner to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Redcard Scovanner to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Redcard Scovanner is present in almost all the verticals within the industry. This has provided firm in Target Corporation Rewards Program, June 2010 case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Redcard Scovanner digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Redcard Scovanner has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Superior customer experience
– The customer experience strategy of Redcard Scovanner in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Redcard Scovanner is one of the most innovative firm in sector. Manager in Target Corporation Rewards Program, June 2010 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Target Corporation Rewards Program, June 2010 Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High brand equity
– Redcard Scovanner has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Redcard Scovanner to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Redcard Scovanner has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Low bargaining power of suppliers
– Suppliers of Redcard Scovanner in the sector have low bargaining power. Target Corporation Rewards Program, June 2010 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Redcard Scovanner to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Redcard Scovanner has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Target Corporation Rewards Program, June 2010 Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Analytics focus
– Redcard Scovanner is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Robert M. Conroy can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to recruit top talent
– Redcard Scovanner is one of the leading recruiters in the industry. Managers in the Target Corporation Rewards Program, June 2010 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Target Corporation Rewards Program, June 2010 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Target Corporation Rewards Program, June 2010 are -
Capital Spending Reduction
– Even during the low interest decade, Redcard Scovanner has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Lack of clear differentiation of Redcard Scovanner products
– To increase the profitability and margins on the products, Redcard Scovanner needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Redcard Scovanner, firm in the HBR case study Target Corporation Rewards Program, June 2010 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Target Corporation Rewards Program, June 2010, is just above the industry average. Redcard Scovanner needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High cash cycle compare to competitors
Redcard Scovanner has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Target Corporation Rewards Program, June 2010 HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Redcard Scovanner has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Redcard Scovanner has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Target Corporation Rewards Program, June 2010, it seems that the employees of Redcard Scovanner don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Products dominated business model
– Even though Redcard Scovanner has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Target Corporation Rewards Program, June 2010 should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Redcard Scovanner is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Target Corporation Rewards Program, June 2010 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Redcard Scovanner has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities Target Corporation Rewards Program, June 2010 | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Target Corporation Rewards Program, June 2010 are -
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Redcard Scovanner in the consumer business. Now Redcard Scovanner can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Redcard Scovanner can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Redcard Scovanner is facing challenges because of the dominance of functional experts in the organization. Target Corporation Rewards Program, June 2010 case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Redcard Scovanner can use these opportunities to build new business models that can help the communities that Redcard Scovanner operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Creating value in data economy
– The success of analytics program of Redcard Scovanner has opened avenues for new revenue streams for the organization in the industry. This can help Redcard Scovanner to build a more holistic ecosystem as suggested in the Target Corporation Rewards Program, June 2010 case study. Redcard Scovanner can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Redcard Scovanner can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Better consumer reach
– The expansion of the 5G network will help Redcard Scovanner to increase its market reach. Redcard Scovanner will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Redcard Scovanner to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Redcard Scovanner to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Redcard Scovanner can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Redcard Scovanner can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Redcard Scovanner has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Target Corporation Rewards Program, June 2010 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Redcard Scovanner to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Redcard Scovanner can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Finance & Accounting segment.
Learning at scale
– Online learning technologies has now opened space for Redcard Scovanner to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats Target Corporation Rewards Program, June 2010 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Target Corporation Rewards Program, June 2010 are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Redcard Scovanner business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Redcard Scovanner has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Redcard Scovanner needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Redcard Scovanner needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Redcard Scovanner can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing wage structure of Redcard Scovanner
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Redcard Scovanner.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Redcard Scovanner can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Target Corporation Rewards Program, June 2010 .
High dependence on third party suppliers
– Redcard Scovanner high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Redcard Scovanner.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Redcard Scovanner in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Redcard Scovanner in the Finance & Accounting sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Redcard Scovanner can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Redcard Scovanner with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Target Corporation Rewards Program, June 2010 Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Target Corporation Rewards Program, June 2010 needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Target Corporation Rewards Program, June 2010 is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Target Corporation Rewards Program, June 2010 is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Target Corporation Rewards Program, June 2010 is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Redcard Scovanner needs to make to build a sustainable competitive advantage.