Wal-Marts Prerequisites of Solid Growth and Target - Report Example

The paper “Wal-Mart’s Prerequisites of Solid Growth and Target” is a brilliant example of a marketing report. In the midst of the economic crisis that started in 2007 in the United States and that was touched off by the mortgage and banking crisis that took down the likes of Lehman Brothers and Bear Stearns, the cascade of negative economic effects extended to the retail sector, where the reduced consumption by consumers and the shift towards low-priced essentials and away from non-essential discretionary products have hit some retailers harder than others.

Target, which was positioned for the better part of the previous ten years as a provider of quality general merchandise and quality retail experiences, was being badly hit in terms of reduced sales and reduced profits as a result, even though in truth it had also been about low cost.The successful marketing repositioning of Wal-Mart as not only a provider of low-cost essentials but also purveyors of higher quality of lives through savings in staples and essentials spending had hit Target and other higher-end retailers especially hard.

The new CEO Steinhafel found himself unable to change course successfully from a business plan that was set at least a year to a year and a half and was increasingly inappropriate given the rapid downward spiral of the economy and of consumer spending. Tactics to shift towards food, and to shift towards a marketing message that stressed low price, were not working, and as a result, the company found itself facing dwindling consumer and investor confidence, hammering the share price to its lowest in at least five years.

Management meanwhile saw, after a thorough review, that the core quality and low price positioning of Target was workable and in all the right strategy for the long term, but the problem facing the company in 2009 pertained to being able to shore up revenues and to reverse sales, profits, and share price declines. These prompted the company to look at trimming costs and making internal processes more efficient, pushing forward staff reduction plans, and re-engineering store operations so that they are more customer-facing focused as well as more efficient in the use of manpower and in the management of stocks on the floor and in the warehouses.