Target's Information Breach Case Study

In today’s world, information technology (IT) is used everywhere, spanning from average consumers purchasing items like apps to the foundation of all informational systems within large corporations. The evolution of IT usage has led to great improvements in everyday conveniences, let alone business operations, but has also created many worries for companies such as information security, privacy protection, and the possibility of cyber breaches. Recent years have proven that security and information breaches are headline worthy due to the extent of damages possible, including loss of personal information (both public and non-public), direct financial losses, and subsequent costs firms incur to ensure the same breach does not happen again.

Operating its business under the moto “Expect More, Pay Less” since 1994, Target obtained a loyal customer base on the premise of offering quality goods at affordable prices (Srinivasan, Paine, and Goyal); based on Target’s brand image and representation, it is reasonable to assume that this customer base associated the brand with value, quality, and trust. However, facts made known after the breach imply that the state of the company’s IT infrastructure plus its use of procured cyber-security investments prior to the breach created a scenario where a breach was not simply possible, but inevitable. Furthermore, details later disclosed suggest that Target’s board and various committees were more committed to limiting the disruption of day-to-day operations, and thereby maximizing profits, than they were to ensuring the company built proper policies and procedures to safeguard itself from increasing cyber

After announcing news of the data leak on December 19, 2013, the public was still unaware of the depth of what had happened and what data was compromised (Harris, May 2014). It was not until over a week later, on December 27, that the company confirmed that credit card and PIN data from customers had been compromised. Following this disclosure, Target’s stock began a significant downward slide through the coming weeks, resulting in a very poor 4th quarter showing. Ultimately, Target ended Q4 with $520 million in net earnings which was down 46 percent in comparison to the year before (Harris, Feb 2014). Not only were profits down, but Target also had to deal with residual costs from the