Target Scandal, Essay Example

In the wake of scandals embezzlement, fraud, corruption, bribery, and countless others that have a significant impact on the economy and the way in which consumers look at businesses. Scandals in companies is nothing new and have been going on as far as businesses have been built. Businesses usually will end at some point, others fail on their own resonance, with the changing times, and some fail in spectacular fashion that it makes headlines. Some companies such as Enron, WorldCom, Tyco International, Lance Armstrong and Livestrong Foundation, HP spying scandal, and several others that have plagued the news in their respective times. More recently a company that has been inundated with headlines since Christmas and has continued to top news stories with more information coming out. Target Corporations have been hit one of the biggest security breaches in recent history that will cost the corporation millions of dollars, a mark on their reputation, and unforeseeable damage in customer and revenue loss. At the first Target Corporation was hesitant about releasing the information to the public, but after many of the information leaked about the total number of customers credit card information stolen it was only a matter of time. While this type of scandal is not yet known in its entirety on the direct cause, it does question the type of security, and if questionable activity was going on behind the scenes.

Target Corporation is a superstore much like Wal-Mart, howeveris aimed at providing more stylish products at affordable prices. Their mission is, “to make Target your preferred shopping destination in all channels by delivering outstanding value, continuous innovation and exceptional guest experiences by consistently fulfilling our Expect More. Pay Less. ® brand promise.” (Target 2014) Founded in 1902 by George Draper Dayton in Minneapolis, Minnesotais considered the second largest discount retailer behind their main competition Walmart. (Target 2014) According to Forbes Fortune 500 in 2013 it was ranked as the 36^th company, and had a value high valued stocked on Standard & Poor 500 index. The first Target opened in Roseville, Minnesota in 1962, and has grown substantially to include stores throughout the United States and Canada with 1,921 stores including over 100 Canadian locations alone. Officially named Target in 1962, it lost millions in its early establishment until a changing tide in 1965 after it reported its first gain of 39 million.During 1979, they celebrated achieving their first $1 billion in annual sales when they have 74 stores in 11 states. (Target 2014) From then on the company continued to expandcoast to coast opening stores in California, southeast, northwest, and throughout the United States. Target is most noted with being the first store to implement the UPC bar-code packaging technology in their stores during 1988, which helped with increasing automation, inventory management, and short lines, which was adopted throughout the industry. In 1995 to compete with Walmart, they opened their first superstore that offered customers groceries and other home and entertainment needs in Omaha, Nebraska. (Target 2014) The company has begun to expand in Canada looking to establish international chains with a revenue of $73 billion last year and over 300,000 employees.  Target has enjoyed much publicity on their diversity programs, billions of dollars given towards philanthropy, and have been a part of major sponsorships throughout their history.

The scandal has placed a major dent on the company’s reputation as well as overshadowed all their many years of excellent customer service. The start of the scandal happened when security expert, Brian Krebs of Krebs on Security, was the first to break the news on December 18, 2013 a week before Christmas that sources from 10 credit card issuers were investigating a potentially major data breach that involved millions of customers debit and credit card information at Target. (Krebs, 2013) The next, Target confirmed that there was a data breach to credit and debit card users between the dates of November 27the and December 15, 2013. These dates included the biggest shopping day, Black Friday, and the holiday season shopping that Target reported to hit 40 million customers. (Press Room, 2013) They also provided information that hackers were able to gain access to the customer’s information, card numbers, CVV security codes, and expiration dates. A week late on the 27^th, Target disclosed that hackers were additionally able to gain debit car PIN data, contradicting initial reports thatit wasn’t part of the breach, although they ensure that they PIN data was encrypted, so it is safe and secure. (Press Room, 2013)  After much prodding into the situation it was revealed that in all over 110 million customer’s information was stolen, reversing the information that only 40 million were affected. (Rosenblum, 2014)  It was made additionally that customers’ information such as phone numbers, email addresses, home addresses, and customer names were stolen as well from the same database. (Rosenblum, 2014) Although they are still investigating the matter, the reports are that a 17 year old Russian, a part of the cyber intelligence group IntelCrawler, was the ring leader in the point-of-sale malware software used in hacking Target, Neiman Marcus, and other large U.S retailers. (Newman, 2014)

There are several problems with this case, as it found out that Target knew of the hack in early December but did not disclose information until Krebs started to investigate. No arrest has been made, and many credit card and financial institutions have re-issued new cards to their customers, as well as set up credit monitoring services. A class action lawsuit has been filed against Target, with more sure to come, as Target tries to reassess the situation and ensure customers that they have the situation handled. At the moment, several agencies and advocates have voiced for federal invention as the situation seems to be out of control and Target still not sure of the major fallout of the scandal.

References

Krebs, Daniel. (2013). Sources: Target Investigating Data Breach. Krebs on Security. Retrieved from http://krebsonsecurity.com/2013/12/sources-target-investigating-data-breach/

Newman, Lily Hay. (2014). A 17-Year-Old Was Behind the Target, Neiman Marcus Credit Card Hacks. Slate. Retrieved from http://www.slate.com/blogs/future_tense/2014/01/20/target_neiman_marcus_credit_card_number_hacks_were_caused_by_a_17_year_old.html

Press Room. (2013). Target Confirms Unauthorized Access to Payment Card Data in U.S. Stores. Target. Retrieved from http://pressroom.target.com/news/target-confirms-unauthorized-access-to-payment-card-data-in-u-s-stores

Rosenblum, Paula. (2014). The Target Data Breach Is Becoming A Nightmare. Forbes. Retrieved from http://www.forbes.com/sites/paularosenblum/2014/01/17/the-target-data-breach-is-becoming-a-nightmare/

Target Through the Years. (2014). Target. Retrieved from https://corporate.target.com/about/history/Target-through-the-years