Question

Please Discuss the type of distribution strategy that Target most often practices. What does this type of distribution strategy entail and why is it an effective strategy for Target?

Answer 1

Target focusses on efficiency in supply chain management and incorporated hub and spoke distribution medium where One central store is the hub and all other smaller central stores are evenly distributed over geography as spokes. The smaller central stores are spread out such that inbound and outbound logistics cost is lowest and delivery and turnaround time is lowest because goods are packed together and transported in bulk.

The hierarchy of centres are as follows:

1. Regional general merchndise distribution central store
2. Redistribution central store
3. Perishable food distribution central store
4. Ecommerce fulfillment central store
5. Return pricessing stores.

Such strategies are effective because it adopts economies of scale and minimizes wastage and losses. Also it is adept amd optimally allocates resources within specific time slots.