Dayton Hudson

Statement of Problem:

Dayton Hudson Corporation; the fourth largest discount and fashion retailer in the United States, is facing a plethora of problems, that is causing top management to implement new strategic actions to try to salvage the company. The first of their problems dealt with an inability to generate profits. Their first quarter earnings had fallen 72%, and their net earnings were down 28%. The Mervyns division has reported that their profits were down 51% from the previous year. Second, they experienced trouble with the U.S Labor Department. Hurting their image of being a socially responsible firm. Finally, they face personnel problems. This occurred due to numerous top-level employees leaving the firm abruptly.

Company History:

Dayton Hudson Corporation has retail operations in all segments of the discount and clothing industry. These range from their national upscale discount stores (Target), to a moderate-priced family department store (Mervyns), as well as a Department Store Division which is a centrally operated full-line, full-service chain, emphasizing fashion leadership (Marshall Fields, Dayton, Hudson). However it was not started this way. Initially, Dayton and Hudson were two separate companies that both specialized in shopping centers. Both realized they had market potential and grew through mergers and acquisitions. Dayton focused on internal growth ventures as well, hoping to capitalize on low margin merchandising. In 1962, Dayton opened their first Target stores, hoping to obtain this goal. In 1969, the two companies merged to form the Dayton Hudson Corporation (DHC). This merger made DHC the 14th largest general merchandise retailer in the United States. DHC continued with its growth strategy and merged with Mervyns in 1978. Mervyns was a West Coast department store chain. The following merger allowed DHC to become the countries 7th largest general merchandise retailer.