Fortune on Target

By Jennifer Hopfinger


On the heels of the March 17th cover story, "What Makes Apple Golden," and the March 3rd cover story, "The Pepsi Challenge," Fortune magazine turns it sights on another corporate giant in its March 31st cover story, "How Target Does It." Writer Jennifer Reingold profiles the retailer, which has had a great run but is now facing new challenges: a tough economic climate, a strengthening competitive threat from walmart and a new CEO.

Oddly, according to the article, neither the outgoing CEO Robert Ulrich, who has been at Target's helm for 14 years, nor the company itself has ever been featured on the cover of a major magazine. This, despite the fact that Target ranks 33rd on the Fortune 500 list, which means it's bigger than Microsoft and PepsiCo and more than twice the size of Cisco Systems.

In fact, unlike other CEOs of companies of similar size, few people have ever even heard of Ulrich. Despite the fact that he's worked at Target for 23 years, he isn't often recognized by his own employees. According to Reingold, Ulrich's No. 2, Gregg Steinhafel, who will take over as CEO in May, is just as low-profile. During the interview for the article, Reingold writes, Steinhafel was reluctant to talk about himself, saying the conversation should be about the brand.

"Thanks to the efforts of this mysterious Minneapolis-based crew, it has been," she writes. "Target has been around since 1962, but in the past decade its red-and-white circles have become as instantly recognizable as the swoosh or the bitten apple. A recent survey showed that an amazing 97 percent of Americans recognize Target's target."

But while the company has experienced impressive growth in recent years, Target is about to change leadership in an uncertain economy. "It might look bleak," she writes, "until you understand that Target's real competitive advantage isn't a logo or a line of designer purses or a catchy slogan. It's the team that created them." The article delves into the little-known people behind the well-known brand.

Online Shopping Brokers: WalMart

Rollback Savings at Walmart.com

Wal-Mart Teams with 1-800 CONTACTS to Expand Vision Care Offerings
Companies estimate first of its kind alliance could save customers approximately $400 million on contact lenses over the next three years

BENTONVILLE, Ark. and DRAPER, Utah – In the latest move to help drive down healthcare costs, Wal-Mart Stores Inc. (NYSE: WMT) today announced a long-term agreement with 1-800 CONTACTS that will bring contact lenses to more Americans at lower prices. The alliance combines Wal-Mart savings and the convenience and high quality care of independent eye doctors located in nearly 3,000 Wal-Mart Stores and Sam’s Clubs with 1-800 CONTACTS’ convenience and customer support to help customers save money and live better, healthier lives.

Wal-Mart, Sam’s Club and 1-800 CONTACTS will create efficiencies across their call centers, websites, purchasing, and distribution efforts – resulting in customer savings the companies estimate could reach $400 million over the next three years. By offering greater accessibility and savings on contact lenses, the alliance also aims to make it easier to replace lenses according to a schedule doctors recommend, a practice that may result in better eye health.

According to a 2004 Federal Trade Commission report, a McKinsey & Company survey showed that contact lens wearers use lenses longer than their doctor prescribed. Some consumers in that same survey specifically cited cost and “purchasing them is inconvenient” as reasons for over-wearing their lenses.*

“Our $4 prescription program is proof that Wal-Mart is committed to meeting America’s healthcare challenges. Our commitment to affordable eye care is no different,” said Dr. John Agwunobi, senior vice president and president for Wal-Mart’s professional services division. “Lowering costs and increasing convenience will make it easier for patients to follow their doctors’ advice and replace their lenses as recommended.”

Jonathan C. Coon, chief executive officer of 1-800 CONTACTS stated, “The majority of contact lens wearers experience high prices and limited service. This alliance can save these customers nearly 20 percent on their contact lenses while also offering the convenience of 24/7 live service from an associate by calling 1-800 CONTACTS or online at www.1800contacts.com.”

The companies expect to integrate store, web, and phone service this fall so customers can order when they want, how they want, and have their lenses delivered quickly to wherever they want.

About Wal-Mart
Wal-Mart Stores, Inc. operates Wal-Mart discount stores, Supercenters, Neighborhood Markets and Sam’s Club locations in the United States. The Company operates in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico and the United Kingdom. The Company’s securities are listed on the New York Stock Exchange under the symbol WMT.

About 1-800 CONTACTS
1-800 CONTACTS offers consumers an attractive alternative for obtaining replacement contact lenses in terms of convenience, price, breadth of inventory, and speed of delivery. Through its easy-to-remember, toll-free telephone number, “1-800 CONTACTS” (1-800-266-8228), the Company sells all of the popular brands of contact lenses. 1-800 CONTACTS offers products at competitive prices, while delivering a high level of customer service. In a public-to-private transaction, 1-800 CONTACTS was acquired by an affiliate of Fenway Partners LLC, a middle market private equity firm with approximately $2.0 billion under management.