MEMO To: Bobby C. Vaught, Ph.D. Date: July 11, 2000 Professor of Management From: John Schindele Subject: Target Corporation (Formerly Dayton Hudson) The main issue facing Target Corporation is what it should do with its department store and Mervyn's divisions. The company has considered closing or selling the divisions several times over the past few decades. Although both divisions continue to make a profit, the company could be better off focusing all of its attention on the Target stores. On the other hand, maybe the company needs to take a different approach with the divisions and try to make them more successful to generate greater profits. Target 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 st!
             art conducting business in the same fashion as the Target stores. 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. The goal for the new change is that within a few months the change will be in full swing. After a year the companies should be making not only more revenue but also more profit. Unfortunately, if the changes do not work as planned, Target Corporation will not be able to keep the businesses. Background Dayton Hudson Corporation changed its name to Target Corporation in January this year. The origins of the company date back to 1891 when Joseph Hudson opened a men's clothing store in Detroit. In 1903 George Dayton opened Dayton Dry Goods Company, which changed its name to Th...