Target 2003 Annual Report Download - page 12

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At Target Financial Services, we are driven by dual objectives:
(1) to build retail sales by deepening our relationships with our guests,
and (2) to sustain outstanding profitability and growth in delivering
financial services to our guests.
o achieve these joint objectives, we’re offering
our guests more reasons to shop our stores
— like loyalty programs that speak to what
matters most in their lives and financial
product innovations that make shopping
and saving easier than ever before. We strive to fully
integrate our efforts into a unified guest experience, while
operating with the discipline, expertise and strategy of a
stand-alone financial services business.
Adhering to Core Principles
Since our credit card operations were consolidated in 1995,
our business decisions and growth have been guided by
four core operating principles.
The first principle is that we drive our growth through
value-added programs, not through aggressive credit
decisions. Our various Rewards programs, for example,
give guests compelling reasons to use our cards, rather
than other general purpose credit or debit cards.
Our second principle is that we exercise strong financial
controls in the management of our business. We never
compromise our underwriting standards for short-term
gain or growth. This discipline ensures that we are able
to sustain our profitability as we grow our portfolio over
the long-term.
Our third principle is to make strategic investments,
particularly in state-of-the-art technology that will
contribute to increased efficiency and performance.
Investments in recent years have enabled us to mean-
ingfully reduce our operating expense rates and achieve
levels of guest service that are among the best in the
credit card industry.
Our fourth and final guiding principle is our commit-
ment to building a superior organization by attracting
and retaining talented and dedicated team members.
The majority of our financial services management has
significant prior experience at other leading financial
institutions.
More Great Reasons to Shop at Target
Similar to our focus in other areas of the company, our
financial products and services are designed to profitably
increase shopping frequency and average transaction
amount, while reinforcing and enhancing our brand identity.
Financial Services
Target Visa During 2003, we
enjoyed continued success in
the growth and performance
of the Target Visa card,
reflecting our guests’ strong
positive bond with our brand.
As of year-end, the Target
Visa portfolio included more
than four billion dollars in
accounts receivable and over
nine million cards issued and
represented a substantial
portion of the annual increase
in our credit card operation’s
profit contribution.
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