When the game is stacked against you, create a new game!
Knowing how they did it, how Target Corporation became one of the most successful retailers in the world begins with understanding a powerful strategic principle: don’t compete in a game you can’t win — redefine the game entirely.
When the first Target store opened its doors in 1962, retail competition largely revolved around becoming either a better department store or a better discount store. The founders of Target recognized that trying to outperform entrenched competitors within existing models would be extraordinarily difficult. Instead, they chose to create something fundamentally different — neither traditional department store nor conventional discount retailer.
Today we would describe this as market disruption.
Decades ahead of much of modern strategic thinking, Target’s success was set in motion by rejecting the binary limitations of the business models of the day.
In his book The Opposable Mind, Roger Martin popularized the concept of integrative thinking — the idea that successful leaders do not accept strategy (A) or strategy (B), but instead create a superior alternative (C). As Roger Martin explains, “there is a way to integrate the advantages of one solution without canceling out the advantages of an alternative solution.”
Before Target Was Target
Before Target was Target, it was the Dayton Company, a family-owned Minneapolis-based operator of three department stores. While reasonably successful, the company — like many traditional retailers at the time — faced growing pressure from emerging discount chains.
It was Dayton vice-president John Geisse, together with Douglas Dayton, who asked the transformative question:
Why must retail be either department store or discount store? Could there be an entirely different model that captured the strengths of both?
That question changed the trajectory of the company.
Other business leaders would later arrive at similar conclusions. Roger Martin quotes A.G. Lafley, former Chairman and CEO of Procter & Gamble, reflecting on the company’s success: “We weren’t going to win if it was an ‘or’ — everybody can do ‘or’.”
Target avoided competing on the same levers as conventional discount stores — off-price goods, irregular merchandise and purely low-cost positioning — while also overcoming the limitations of traditional department stores.
Instead, they fused department store aesthetics, merchandising and customer experience with discount pricing accessibility to create the first truly successful upscale discount retailer.
Planting the seed for the fashion-forward brand Target would later become known for, they created a more attractive shopping environment, carried trend-relevant merchandise and elevated the perception of value beyond price alone.
Often It Takes an Outsider
One of the more interesting strategic decisions during Target’s formation was staffing the new venture with relatively few executives from Dayton’s traditional department store business.
A Harvard Business School case study from the 1960s noted that Dayton leadership believed department store executives were often “too wedded to that type of operation” and that Target could benefit from developing people specifically oriented toward a new model.
This highlights an important strategic reality: incumbents can become deeply invested in existing assumptions, operating norms and definitions of success. Industry expertise can be valuable — but it can also create blind spots.
Organizations seeking transformational growth often benefit from introducing perspectives that are not constrained by “how the industry has always done it.”
At enabling ideas®, this principle is frequently explored through our Strategic Blueprint™ process. One of the key objectives is helping leadership teams challenge embedded assumptions, uncover new strategic possibilities and define differentiated pathways for growth that competitors may not readily see.
Strategic Blueprint™ engagements are designed to help organizations:
- Clarify strategic direction
- Reframe growth opportunities
- Identify differentiating market positions
- Align leadership perspectives
- Redesign business models and operating priorities
- Create actionable pathways for sustainable advantage
In many cases, breakthrough strategy emerges not from incremental improvement, but from redefining the competitive landscape itself.
Target’s Enduring Strategic Position
Target’s positioning continues to reflect the integrated thinking that shaped its founding. The company consistently blends value, style, customer experience and emotional brand engagement in ways that differentiate it from both traditional discount and department store competitors.
Humour, design, accessibility and cultural relevance became part of the brand identity — reinforcing its long-standing positioning promise: “Expect More. Pay Less.”
What makes the Target story enduringly relevant is not simply retail success. It is the strategic lesson underneath it:
When the existing game is stacked against you, sustainable advantage may require creating a different game altogether.
By Blair Severn and Marlene Bonigut of enabling ideas®. Research by Heather Wilson of Information Solutions, Rotman School of Management, University of Toronto.
Further reading:
1 Bullseye: Target’s Cheap Chic Strategy, by Barwise Patrick and Sean Meehan, Harvard Business School Working Knowledge (August 16, 2004)
2 In a Test, Target Plans to Add an Apple ‘Store’ Inside 25 Stores, by Clifford Stephanie, New York Times (January 13, 2012).
3 The Opposable Mind: How Successful Leaders Win through Integrative Thinking. by Martin Roger, Boston: Harvard Business School Press, 2007.
