Target vs Best Buy

Best Buy Incorporated and Target Corporation where both founded in Minnesota and have had a stronghold on their Initialized markets. Only being direct competitors within the consumer technology market, both businesses have managed to stay true to the consumers and provide a service that establishes a good repertoire.

The consumer to business relationships have increased total revenue, partnerships, and given investors the perception that the organization is worth future investment.Financial ealth of the two organizations evolves on a consistent basis, yet both companies have been able to retain a sense of quality demanded by the average consumer. Department stores represented one of the most advertising-intensive sectors of American interwar retailing. Yet it has been argued that a competitive spiral of high advertising spending, to match the challenge of other local department stores, contributed to an inflation of operating costs that eroded long-term competitiveness (Scott & Walker, 2011).With the use of Internet advertisement (social medial ommercial campaigns, and newspaper ads, both companies have maintained the ability to be prevalent to the targeted consumer.

Competition Initially came from other department stores, although the extent of competition was limited because each store occupied its own market niche, reinforced by aggressive branding and advertlslng (Scott & walker, 2011). Since Its Inception of 1962, Target corp. has been the pinnacle of department stores. The first store was opened in Roseville, Minnesota and has now grown to over 1,700 stores In the united States of America.

In addition, 201 3 has become Target Corp. argest year of growth; Target Corp. has decided to take their brand beyond the united States and into the Canadian market which will allow them to expand upon their current total sales of $72 billion (2012). Setting a precedent In the Industry has become Target Corp.

main objective, thus, showing in the organization's initial growth of revenue and continual market Innovations. Dedicated to their customers, Target Corp. has created a shopping experience that sets the gold standard in consumer appeal.From the Target Corp.

branding, to the super Target Corp. expansion, the organization has a strong arkeung structure that allows them to reach out to their consumers. With the expansion of the Super Target stores, 20% of the sales have came from food ; pet supplies alone. Over the course of the last five years, Target Corp. has regained strength in the department store market by restructuring the services to stay ahead of their competition through designer collaborations (Missonl, Niemen Marcus, plus twenty one other exclusive brands).With the use of various research and development techniques, Target Corp.

Is able to stay ahead of the curve. Moreover, Wal-Mart is a direct competitor to Target Corp. n a consistent basis; however, their financial health is more powerful when it comes to overall data. The focus of each department store affects the overall sales revenue, but there are major variations that show on both annual reports that show the difference in pure asset strength. For instance, In 2012, Wal-Mart total assets ($193 billion) were four times the amount of Target Corp.

48 billion).Although these profits margins are different in nature, it toys does not take away from Target Corp. from being a very successful company. Considering the fact that Wal-Mart has 8,500 stores in 15 countries around the world, t shows that they are operating at a much higher volume than Target Corp. Hypothetically, if Target Corp.

were to be operating 5 times the rate in which they currently are (1 ,700 stores to 8,500 stores), their total assets would most likely exceed $192 billion (Wal-Mart).This practice formula shows that Target Corp. s more financial strength than Wal-Mart based on a more condensed volume per store revenue profit. Moreover, Target Corp. focuses on quality over saving as much money as possible (quantity), so their customer returns happy with the product that they purchased.

In addition, based on the annual reports from both companies, Target Corp. ($17. 5 billion) has a substantial amount of less debt then Wal-Mart ($44. 07 billion). With this portion of liabilities, both companies still have great financial health due to the amount of total assets made within the fiscal year of 2012.

However, with the use of this data, investors may be able to make key decisions on the current ratio for Target Corp. By dividing the current assets ($48 billion) by the current liabilities ($48 billion), Target Corp. is able to keep the investors interested, or the cooperation's ability to pay short-term obligations is in the positive (1). When comparing Target Corp. 's current ratio to that of Best Buy Incorporated $16 billion/ $16 billion, they are both in good standing (current ratio).In contrast to Target Corp.

, Best Buy Inc. a dedicated multination consumer electronics corporation which was founded in West Saint Paul, Minnesota circa 1966. Operating 1,150 internationally, Best Buy has gone from "Company of the Year" (Forbes/1994) to losing $49. 183 billion of revenue in 2012. With the growth of the internet, companies like Amazon and Ebay have taken a fierce grip on the consumer technology industry.

Often times, Best Buy can't flourish due to the consumer having the option to value price shop online, and ultimately use Best Buy as a window shopping tool to make the final decision on a purchase.Establishing subsidiaries (Geek Squad, Magnolia, etc) has helped gain some ground for the corporation, however, a loss in operating income ($-1. 252 billion), net income ($-481 million), and total equity ($-3. 75 billion) doesn't develop a good sense of security for future investors. With skepticism, Target Corp. as become a more successful company (only negative in operating income at ($-4.

456 billion) than Best Buy Inc. due to the diversity of their sales portfolio. Target Corp. does not have to focus all of the resources on one type of consumer product.

In addition, Target has added the expansion of more consumer technology product offerings (apple, monster, etc) which has not hindered their consumer electronic sales (%18). Even though Best Buy may have had a rough year in 2012, they were able to bring in total assets with a value of $16. 787 billon. Furthermore, Best Buy ended their fiscal year (2012) with $1. billion of cash and cash equivalents. With a cash ratio of .

13= ($1. 2 billion/$8. 855 billion), it could be viewed as a subpar ratio, however, many companies do not keep a high level of cash assets to cover current liabilities.On the other hand, creditors and investors use qualitative measures for ways to predict an organization's financial standing up against other similar companies. Their objectives include firm performance evaluation, liquidity analysis, future profit estimation, competitor analysis prediction of corporate failure and cash flow potential (Zeller & Stanko, 1994).

Provided with the financial information, annual reports help to evaluate the direction each company is headed for the future. With Target Corp. e direct competition is Wal-Mart and Best Buy the competition lay with the internet and even Target.It is easy to say Target has less of a chance for failure than Best Buy due to these facts. Even though Best Buy has some positive profit data on their annual balance sheets, some of this information about the organization displays some potential problems.

In conclusion, with the use of the financial ratios, balance sheets, income, and cash flow statements, each organization an focus in on their own individual strengths and weaknesses in order to have a promising future in the business world.