Case Study: Target

Laval University 01/10/2013 To understand the struggles of Target during the economic crisis that started in 2008, one has to comprehend the relationship Target has with the biggest discount retailer in the United States; Walmart. The two stores are very often paralleled, so much that when one store is brought up, the other one is also brought up for a quick comparison. However, they still have one big difference in the fact that Target is considered to be more up scaled. Often described as “Cheap Chic”, the products at Target are of higher quality for a slightly higher price, while still staying affordable. Before the economic crisis, Target sales were always increasing and the business was growing at a faster rate than Walmart. Target’s profits and sales were increasing from one period to another, while Walmart was basically lagging; not decreasing in sales but not increasing neither. That situation alerted the biggest discount retailer so much that its top manager decided to change their marketing strategy and copy Target. They started to have more and more designer clothing and house furniture lines as well as more gourmet and organic food in its aisles. The well known “Always low prices. Always.” slogan was even changed to “Save money. Live better.” That new catch phrase was designed to take away the image of cheap products and convince customers that by shopping at Walmart, they could increase the quality of their lifestyle. But when the recession hit the United States in 2008, that tendency reversed and basically became the opposite. Instead of Target’s market increasing and Walmart’s decreasing, the former started recording decreases in profits and the latter started showing signs of