dded to Target if the company did not have to strive to keep the other two divisions profitable could really add to Target’s success. Target is easily the strongest part of the company and needs to receive the majority of research and development. Currently the other two divisions are receiving much of the R&D and possibly holding back Target’s growth. RecommendationTarget Corporation is going to have to sell its department store and Mervyn’s divisions if they do not show significant improvements in next year after the new strategy goes into affect. These two divisions are holding Target back and depleting some of its much-needed resources. In the short run the other two divisions are going to start conducting business in the same fashion as the Target stores. They will use similar purchasing, inventory control, and marketing techniques. Target has been very successful using these practices so it is time to see if it will work for the other divisions. This new strategy should work better than what the company has been doing with its smaller divisions. The two divisions have been making a profit but not enough to justify all of the cost. If after a year the new strategy, which is making the other two divisions more like the target division, has not produced more profit for the company, it will be time to either sell or close the companies. Target would much rather sell the companies, but that can only happen if another company is willing to buy. This solution was derived from the fact that Target alone generated about 78% of the revenues while Mervyn’s generated only 12% and the department stores accounted for 9%. If it is found after a year that the smaller two divisions cannot generate more revenue, Target will begin receiving all of the resources that had been going to the other businesses and turn it in to greater profits. The changes will be implemented immediately with a new advertising campaig...
