Marketing in Action Case Real Choices at TargetWhen can offering too many choices become too much tohandle? Target has gone through a period of bad press asa result of an unacceptable level of stock-outs that upsetcustomers and decreased sales. The discount retailer believesthat it can solve the problem by reducing the number ofbrands and varieties of product options on the shelves. BrianCornell, CEO, believes that the increased efficiency will allowfor more focus on priority categories "like wellness, stylishhome goods, apparel, and baby products."Target's distribution process became more complicatedwith the expansion of its grocery business to include per-ishables like meat, fresh produce, and dairy products. Then,the situation became even more complex when it beganallowing online customers to receive orders directly from itswarehouses or pick up their online orders in stores. Becauseof the mess, Target has committed to redesigning its supplychain to make it more streamlined.Target has a rich history of success. In 1902, GeorgeDayton founded a company in Minneapolis, Minnesota, caledDayıon Dry Goods Company. Over the years the companywent through various retail format changes and in 1962, thefirst Target store opened in Roseville, Minnesota. It called itselfthe "new idea in discount stores" differentiated by mergingkey department store features with the lower prices of a dis-counter. Target became "a store you can be proud to shop in,a store you can have confidence in, a store that is fun to shopand exciting to visit." The retailer is the third largest US. storechain, operating over 1,800 retai locations throughout theefficiency. Amy Koo, an analyst with Kantar Retail, says, "Intheory, everything can move faster, and they will have lessstuff in the system."Target's supply chain transformation includes otherchanges as well. Store shelves are being physically restruc-tured to hold more product, pushing inventory out of back-rooms and onto the sales floor. Suppliers are being requiredto adjust case sizes (how many individual items are inside ashipped carton) to increase inventory turnover and decreasethe number of times a store employee has to handle themerchandise. In addition, Target wants suppliers to give asingle-day arrival date for shipments to Target's warehouses,eliminating the prior practice of a "grace period" that al-lows shipments to arrive a few days after the promised datewithout penalties. These and other changes will help Targetachieve its goal of better inventory management.John Mulligan, chief operating officer, thinks that includ-ing suppliers in planning and executing the transformation isa key to success. Stock-outs not only hurt Target, the lost salesalso mean that everyone in the supply chain suffers. How wellthe company uses this reinvigorated supply chain to deliverits value proposition to customers will be critical to its futurecompetitive success.You Make the Call11-34. What is the decision facing Target?11-35. What factors are important in understanding this deci-United States.sion situation?11-36. What are the alternatives?Despite this lofty history, more recently growth at itsestablished stores has been hindered by unacceptable stocklevels because of their overly complicated supply chain.Target is spending more than $5 billion (yes, BILLION), toupgrade its distribution network and technology infrastruc-ture to reduce stock shortages and facilitate the capabilityfor online growth. In addition, the retailer is shrinking thenumber of different products it keeps in stock and reducingthe number of sizes across those products. These changeswill result in less overall inventory and improved handling11-37. What decision(s) do you recommend?11-38. What are some ways to implement your recommen-dation?Based oe: Fi Wata, "Thisla Haw Taget is Soung ts Os-eol Protlem:" FotuneMach 2,201, haportune.con/20rG/neyaue (amead My 30n, Nanda Ra anlatan lana "Target fats ghaih landure Spand ih Ruaply Cain Radere May4.219.meadescomarictlstirputeples-adshedSHOIDSE coasad tay 5, 21Nandta Base, Targut GesTaugh win Vendos to Speadip Sppe Chain" Reus Mach 2, 2016), tpsas.antrickisapeattek-LBOO423pcosset Ma, 0s

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Marketing in Action Case Real Choices at TargetWhen can offering too many choices become too much tohandle? Target has gone through a period of bad press asa result of an unacceptable level of stock-outs that upsetcustomers and decreased sales. The discount retailer believesthat it can solve the problem by reducing the number ofbrands and varieties of product options on the shelves. BrianCornell, CEO, believes that the increased efficiency will allowfor more focus on priority categories &#34;like wellness, stylishhome goods, apparel, and baby products.&#34;Target's distribution process became more complicatedwith the expansion of its grocery business to include per-ishables like meat, fresh produce, and dairy products. Then,the situation became even more complex when it beganallowing online customers to receive orders directly from itswarehouses or pick up their online orders in stores. Becauseof the mess, Target has committed to redesigning its supplychain to make it more streamlined.Target has a rich history of success. In 1902, GeorgeDayton founded a company in Minneapolis, Minnesota, caledDayıon Dry Goods Company. Over the years the companywent through various retail format changes and in 1962, thefirst Target store opened in Roseville, Minnesota. It called itselfthe &#34;new idea in discount stores&#34; differentiated by mergingkey department store features with the lower prices of a dis-counter. Target became &#34;a store you can be proud to shop in,a store you can have confidence in, a store that is fun to shopand exciting to visit.&#34; The retailer is the third largest US. storechain, operating over 1,800 retai locations throughout theefficiency. Amy Koo, an analyst with Kantar Retail, says, &#34;Intheory, everything can move faster, and they will have lessstuff in the system.&#34;Target's supply chain transformation includes otherchanges as well. Store shelves are being physically restruc-tured to hold more product, pushing inventory out of back-rooms and onto the sales floor. Suppliers are being requiredto adjust case sizes (how many individual items are inside ashipped carton) to increase inventory turnover and decreasethe number of times a store employee has to handle themerchandise. In addition, Target wants suppliers to give asingle-day arrival date for shipments to Target's warehouses,eliminating the prior practice of a &#34;grace period&#34; that al-lows shipments to arrive a few days after the promised datewithout penalties. These and other changes will help Targetachieve its goal of better inventory management.John Mulligan, chief operating officer, thinks that includ-ing suppliers in planning and executing the transformation isa key to success. Stock-outs not only hurt Target, the lost salesalso mean that everyone in the supply chain suffers. How wellthe company uses this reinvigorated supply chain to deliverits value proposition to customers will be critical to its futurecompetitive success.You Make the Call11-34. What is the decision facing Target?11-35. What factors are important in understanding this deci-United States.sion situation?11-36. What are the alternatives?Despite this lofty history, more recently growth at itsestablished stores has been hindered by unacceptable stocklevels because of their overly complicated supply chain.Target is spending more than $5 billion (yes, BILLION), toupgrade its distribution network and technology infrastruc-ture to reduce stock shortages and facilitate the capabilityfor online growth. In addition, the retailer is shrinking thenumber of different products it keeps in stock and reducingthe number of sizes across those products. These changeswill result in less overall inventory and improved handling11-37. What decision(s) do you recommend?11-38. What are some ways to implement your recommen-dation?Based oe: Fi Wata, &#34;Thisla Haw Taget is Soung ts Os-eol Protlem:&#34; FotuneMach 2,201, haportune.con/20rG/neyaue (amead My 30n, Nanda Ra anlatan lana &#34;Target fats ghaih landure Spand ih Ruaply Cain Radere May4.219.meadescomarictlstirputeples-adshedSHOIDSE coasad tay 5, 21Nandta Base, Targut GesTaugh win Vendos to Speadip Sppe Chain&#34; Reus Mach 2, 2016), tpsas.antrickisapeattek-LBOO423pcosset Ma, 0s

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