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Target Corp

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Vinida Ma

on 12 May 2015

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Transcript of Target Corp

5 projects to consider

4 new stores opening

1 remodelling store
Target Corporation
design by Dóri Sirály for Prezi
1) Gopher Place
2) Whalen Court
Unique single-level store, open in October 2008

NPV prototype > NPV forecast

Currently operated 45 stores

Use lot of budgets to advertise Target's brand

Leased !!
5) Stadium Remodel
Remodel a SuperTarget store, open in March 2007

Remodel to restore Target's brand in this area

Already been remodeled twice
Summary 5 Project
3) The Barn
Build P04 store, open in March 2007

NPV prototype < NPV forecast

Resubmitted project

Represent new market (rural area)

2 nearest stores were 80 and 90 miles away
4) Goldie's Square
Build a SuperTarget, open in October 2007

NPV prototype > NPV forecast

Key strategic anchor for many retailers

Currently operated 12 stores (expected to have 24)

Affluent & fast growing population
Target's SLOGAN
Opening approximately 100 stores per year
2004
2007
2013
2010
2001
1995
1999
2005
2000
1962
First Target Store
First SuperTarget Store
First SuperTarget open in Omaha, Nebraska
one-Stop Shopping
Launched Target.com
Offer online shopping "www.target.com"
Renamed the company
Exceed $50 billion
Target's Timeline
NUTTA Chulathep
AEK
YIM
LIN
P
NUTTA
M
Located in Roseville, Minnesota
"New Idea in Discount Stores"
Create shoppers' new experience
Build P04 Store, open in October 2007

NPV prototype < NPV forecast

Population growth

Very favorable household income

Already have 5 existing stores

Walmart is going to add 2 more supercenters
Important Competitors
Current Issue
Eh! Should Target raise external fund for CPRS?
Select project with good economic return
Pick only low risk project
Fund it by external source and maintain Target's target capital structure
Also, don't forget firm's slogan
Maintain Growth
CEC approve all CPRs
Type of project
open new store
closing non-performing store
remodeling existing store
Real estate manager's responsibility
CPRs should be judged separately
Capital-Expenditure Approval process COMMENT
• Size of the store does not matter
• Create an incentive system for real estate manager
• Should not totally reject project that require more capital than normal
Q
A
How to ranking
weigh 0.33 each


ACCEPT 3 projects at the same time.

Target's Overview
Target Corporation
Focus on create customers' experience

REDcards



Domestic Growth strategy
5 Projects
Gopher Place
Whalen Court
The Barn
Goldie's Square
Stadium Remodel
Target's Goal
Dashboard in Details
...one day later...
Sensitivity vs Elasticity
Example
Cannibalization
Cannibalization
Different characteristics
Store 9%
Credit 4%
Different Discount Rate
5 Projects
Gopher Place
Whalen Court
The Barn
Goldie's Place
Stadium Remodel
1.Gopher Place, 2.Whalen Court, 3.The Barn, 4.Goldie's Square, 5.Stadium Remodel
Stadium Remodel
The Barn
Gopher Place
Thank you
for your attention
Capital Budgeting System
Weighted each criteria

NPV
Investment
Size
Cannibalization
Sensivity
Contingency
Brand
Awareness
6 Criteria for consideration
4%
9%
Full transcript