Dayton Hudson Case StudyEssay Preview: Dayton Hudson Case StudyReport this essayCASE STUDYDAYTON HUDSON CORPORATION 1998Brief BackgroundStatement of the ProblemDayton-Hudson Corporation should determine ways of how to make its divisions more cost-effective.ObjectivesTo be able to observe Dayton Hudsons strengths and weaknesses.To site Dayton Hudsons opportunities and threats.Areas of ConsiderationIn 1891, Hudsons was the largest retailer of mens clothes in America.Merchandise innovations were return privileges and price marketing in place of bargaining.Hudsons bought Marshall Fields Dept. taking on a billion dollar debt in the process.Targets system is “micro marketing”.Department Stores use a more conservative promotional strategy.Mervyns revenues declined 3.2 percent.Credit card transactions were handled by Hudsons wholly owned Retailers National Bank, chartered 1994.Since 1946, Hudsons has contributed 5 percent of its pretax profits for philanthropic purposes.Hudsons primary objective is to maximize share holder value over time.Alternative Courses of ActionThe Hudson Corporation is committed to serving their guests better than their competitors with trend right, high quality merchandise at very competitive prices.
Provide a low-cost, high quality distributor of merchandise through “boundary less” functioning.Dayton Hudsons Mervyns and Department store division should adapt Targets “micro-marketing” strategy.Hudson Corporation should liquidate the divisions which are not doing well in the market and expand those which are profitable.ConclusionHudson Corporation should liquidate the divisions which are not doing well such as the Mervyns division (Asset Sale). Mervyns performance in the recent years has been disappointing. Revenue declined 3.2 percent because Mervyns clothing line was bland and narrow. According to selected data for Mervyns Division, its operating profit was 280 (97), 153 (96), 100 (95), 206 (94), 179 (93), 284 (92) in millions of dollars were fluctuating which indicates that Mervyns financial standing were unstable. This is also evident in their number stores which declined from 300 stores in 1996 to only 269 in 1997.
Hudson Corporation, on the other hand, should expand their Target Division after liquidating Mervyns division. Hudsons Target Division is its most profitable division, its an upscale discount store that provides good quality, and family oriented merchandise at attractive prices. Targets performance has been strong and consistent across merchandise categories and geographical regions during the last several years. Targets micro-marketing program helped improve its merchandise assortments. Micro-marketing is for tailoring merchandise assortments to customers needs in individual stores or markets based on regional demographics and ethnic factors. In this case, Department store division should try to adapt Targets micro-marketing strategy against its conservative promotional strategy to help improve their financial situation.
Hudsons Target Division has some of the best line levels and pricing in the Target family.
