Target Corporation Ackman versus the Board Case Solution

1. How does Target's business model differ from that of Walmart?

According to the findings in the case study, the comparative analysis for Target and Wal-Mart in 2009 shows that with nearly $64 billion in total sales, Target was the second-largest retail business in the United States. This was so because the company’s focus was more reliant on smaller stores, and there was an emphasis on the upscale approach; and this was one of the differentiating factors for Target. Building on its “expect more, pay less” motto, Target’s upscale offerings consisted of a collaboration between higher quality, fashion or designer, which were a rarity to find at other stores. These product offerings were more dominant in, home furnishing, kitchenware, and apparel. This was derived from the apprehension that not every consumer would be willing to pay more for a designer build, hence these better-looking pieces were an attraction for them. What gave Target a cutting edge over its biggest competitor was the introduction of the credit card in 1995, and labeled itself as the first major discount store to have its own store card. This strategy not only increased sales, substantially, but also gave customers a wide-ranging options for the mode of payment preferred by them.

With global sales of more than $400 billion, Wal-Mart was the biggest retailer in the world. The business model for Walmart was divided into three segments: Wal-Mart Supercenters, Walmart discount stores and Walmart neighborhood markets. The main objective of Wal-Mart was to provide the cheapest pricing attainable every day. Its tagline is "Save Money. With the money they saved at Walmart, shoppers could "live better," according to the slogan "Live Better." This goes to show how the two giant retailers, providing similar products, were at the same time differentiating and competing with one another. While Walmart continued to be competitive, Target developed strategies which gave it a competitive edge and a differentiating factors over Walmart during a stable economic regime.