This breach had a huge impact internally which led to the “resignation” of Target’s Chief Information Officer and CEO.Then Target announced two key positions :Executive Vice-President and Chief Information Security Officer and Executive Vice-President and Chief Compliance Officer to be recruited externally.These events might force a review of the presence of certain members of the Board themselves and have significant repercussions on Target’s leadership.
Shareholders and Investors:
1.Target’s share price dropped significantly following the announcement of the breach, leading to losses for shareholders.
2.The company’s profits declined by 46% in the fourth quarter, and revenue dropped by 5.3%, affecting investors’ returns.
3.The missed Wall Street targets for both quarterly and full-year results further eroded investor confidence.
Customers:
1.Millions of customers’ personal data were stolen, including credit card information, putting them at risk of fraud and identity theft.
2.Target had to reimburse banks for card reissuing costs, but customers still faced inconvenience and potential financial losses.
3.Target offered credit monitoring services to affected customers, but this did not fully mitigate the damage to their trust and loyalty.
Employees:
1.Employees faced increased workload and stress as the company scrambled to respond to the breach and mitigate its impact.
2.Morale may have been affected, especially among those working in customer service who had to deal with angry and concerned customers.
3.The breach also damaged Target’s reputation, which can negatively impact employees’ sense of pride and belonging.
Suppliers and Partners:
1.Target’s reputational damage may have made it a less attractive partner for suppliers and other business partners.
2.This could affect pricing, terms of contract, and other business deals.
3.Suppliers may also have faced increased scrutiny and regulation due to their association with Target.
Community and Society:
1.The breach highlighted the importance of data security and consumer privacy, leading to increased scrutiny and regulation in the retail industry.
2.Target’s response to the breach (or lack thereof) became a case study for other companies to learn from or avoid.
3.Target contributed financially to public awareness programs around cybersecurity, reflecting the societal impact of the breach.
In summary, the Target data breach had far-reaching consequences for all stakeholder classes, including significant financial losses for shareholders, privacy risks and inconvenience for customers, increased stress and workload for employees, reputational damage for suppliers and partners, and societal implications around data security and consumer privacy.
For Target itself, Target reported a significant decline in profits and revenue due to decreased customer confidence and increased costs associated with card reissuance and customer management.
For financial institutions, particularly banks, the cost of issuing new cards and managing fraudulent transactions post-breach was substantial. However, banks typically recover only a small portion of these costs under merchant-card company contract clauses.
The immediate consequences for customers are the inconvenience of cancelling their credit cards, which can lead to identity theft if personal data is stolen, resulting in potential financial loss.
Financial Impact: Target reported a 46% decline in profits for the fourth quarter of 2013 and a 5.3% drop in revenue. The breach cost the company millions in immediate response efforts, including $61 million in expenses and potential long-term costs exceeding $500 million.
Reputational Damage: Consumer trust in the brand plummeted, leading to negative consumer perception scores and reduced foot traffic in stores.
Legal Repercussions: Target faced over 140 lawsuits, including class-action suits from financial institutions, consumers, and shareholders.
Leadership Changes: The breach led to the resignation of the CIO and eventually the CEO. The company restructured its security and compliance teams to prevent future incidents.
Consumers:
Fraud and Inconvenience: Millions of customers had their credit and debit card information compromised, leading to fraudulent transactions, card cancellations, and significant inconvenience.
Identity Theft: Consumers face the risk of identity theft and the associated long-term consequences.
Operational Costs: Banks incurred substantial costs reissuing over 15.3 million cards and managing customer relations. JP Morgan Chase, for instance, had to place temporary limits on card usage for affected customers.
Legal Actions: Financial institutions pursued lawsuits against Target to recover costs related to the breach.
Vendors and Third Parties:
Trust and Security: The breach highlighted vulnerabilities in the security practices of vendors like Fazio Mechanical Services, leading to increased scrutiny and the need for stronger security measures in vendor relationships.
Regulatory and Legislative Impact:Policy Changes: The breach prompted discussions in the U.S. Senate on data protection laws and led to industry initiatives like the shift to chip-and-PIN technology to enhance payment security.
Liability Rules: New rules were implemented to shift fraud liability to the weakest link in the security chain, encouraging stakeholders to upgrade their systems.
The consequences of the breach for the stakeholders were significant. Target’s image suffered greatly, resulting in negative consumer perception and a 46% decline in profits in the fourth quarter of 2013. Revenue dropped by 5.3%, attributed to fearful shoppers. The breach cost Target $61 million initially, with total costs potentially exceeding $500 million, including reimbursement to banks, communication expenses, customer management, PCI DSS fines, credit monitoring, and legal fees. Target faced over 140 lawsuits from financial institutions, consumers, and shareholders. Internally, the breach led to the resignation of the CIO, an overhaul of the security structure, and the eventual dismissal of the CEO .
Financial Impact: Target’s profits fell by 46% in the fourth quarter of 2013, from $961 million to $520 million, with a 5.3% drop in revenue. The breach costs were estimated to exceed $500 million, potentially reaching $1 billion, covering card reissuing, customer management, credit monitoring, legal fees, and fines.
Leadership Changes: The breach led to the resignation of the CIO and the departure of the CEO, prompting the creation of new executive roles focused on information security and compliance.
Reputation Damage: Target’s brand reputation took a significant hit, particularly as the breach occurred during the pre-Christmas shopping season, affecting consumer trust.
-Consumers: Risk of financial loss, disclosure of personally identifiable information.
-Companies: Loss of customer trust, financial loss, damage to company goodwill.
-Shareholders:Potential reduction in stock value, resulting in financial loss.
-Employees:As the company’s financial situation deteriorates, employees face income problems and increased workloads, employees need to work harder to restore the company’s goodwill.
-Community:Decrease in tax revenue and decrease in local government tax revenue due to decrease in sales.
-Business partners:Some business partners are facing contractual implications due to data security clauses in the agreement with Target.
(1) Shareholders: Default may cause investors to lose confidence in the company’s prospects, leading to a decline in stock prices and a decrease in shareholder wealth. In some cases, shareholders may face legal action for a company’s breach of contract, especially when the breach involves improper corporate governance or insufficient information disclosure.
(2) Creditors: Default events may increase the company’s credit risk, affect the reputation and position of creditors in the market, and result in collateral losses.
(3) Employee: Breach of contract may lead to a deterioration of the company’s financial situation, which in turn affects employee salaries and benefits. If the company is in trouble due to default, employees may face the risk of unemployment.
(4) Supplier: Suppliers may not be able to collect the company’s accounts payable on time, resulting in liquidity issues. Breach of contract may disrupt the long-term cooperative relationship between the company and suppliers, affecting the stability and efficiency of the supply chain.
(5) Customer: Breach of contract may result in the company being unable to provide stable products or services, affecting customer satisfaction and loyalty. In some cases, customers may have legal disputes with the company due to the company’s breach of contract, such as contract breach litigation, etc
Breach of contract will have far-reaching consequences for every stakeholder of the target company. Firstly, for shareholders, default may lead to damage to the company’s reputation, a decline in stock prices, and thus directly affect its investment returns. Secondly, creditors may face the risk of financial losses due to the company’s inability to repay on time, which may lead them to demand higher interest rates or stricter repayment conditions. For employees, default may lead to a deterioration of the company’s financial situation, which in turn affects salary payments and welfare benefits, and may even lead to adverse consequences such as layoffs.
In addition, suppliers and partners may lose trust due to company defaults, leading to supply chain disruptions or partnership breakdowns. For consumers, if a company’s breach of contract involves product or service quality issues, it may harm their rights, lead to damage to brand image, and thus affect the company’s market competitiveness.
In summary, breach of contract will have varying degrees of negative impact on various stakeholders of the target company. Therefore, the company should try to avoid breach of contract and maintain good business reputation and cooperative relationships.
For the bottom line,
(1) In terms of image, he was severely criticized for failing to take action on the initial alert, delaying the disclosure of violations, and the inability of the customer service department to respond to customers. And for the first time, it scored negative in all consumer perception surveys.
(2) On the customer side, the cost of customer churn and default has affected quarterly and annual performance, far from meeting Wall Street’s goals. The difficulties brought about by the company’s expansion in Canada were a factor that led to the failure to achieve its goals.
(3) Target faces multiple lawsuits, each demanding millions of dollars in compensation.
For internal Targett,
(1) Target announces the resignation of its Chief Information Officer
(2) The first step is to comprehensively reform its information security and compliance structure and practices.
(3) Step 2, announce the establishment of two key positions that will be recruited from external sources
For Target’s project,
(1) Implement a chip card and personal identification number payment (chip and PIN) system six months in advance.
For customers:
(1) If the card is cancelled and the cardholder has pending or recurring transactions, they must contact every relevant merchant. Canceling credit cards can also lead to further headaches.
(2) In addition to violating personal privacy, the resulting identity theft also forces victims to embark on a long and arduous process to defend their identity and prove to all parties that they have not committed any illegal acts.
The stakeholders’ interests suffered significant short-term losses, and future gains will also decrease, potentially causing further losses due to ongoing lawsuits. This crisis, caused by the failure to act on the initial alerts, the delay in making the breach public, and the inability of its customer service department to respond to customers, will lead to a loss of trust from customers and the market. Consequently, this will result in customer attrition, lower market and investor expectations, and a decline in stock prices, thereby affecting the stakeholders’ interests. If the company fails to restore its reputation promptly, it will lose market share to competitors, impacting sales performance and further affecting shareholder returns. Additionally, the legal proceedings stemming from the data breach represent a significant future cost.
According to the material “…the Target brand scored negatively in all surveys of consumer perceptions. These negative sentiments were reflected in the company’s fourth-quarter results. Indeed, Target announced a 46% decline in profits and a 5.3% drop in revenue, which management attributed to fearful shoppers…The exodus of customers and the costs related to the breach affected not only the quarterly results, but also full-year results, which fell far short of Wall Street’s targets……However, experts speculate that, when all is said and done, the total cost of the breach will exceed $500 million, and may even approach the $1-billion mark……It is difficult to predict the long-term financial impact of the data breach. Target is currently facing over 140 lawsuits, each seeking millions of dollars in damages.
1. The enterprise itself
The company may face direct financial losses. Breaches can seriously damage a company’s reputation, lead to a decline in customer trust and affect long-term brand value. Companies may face penalties and legal action from regulators, which not only increases legal costs, but may also lead to stricter regulatory oversight. Dealing with breaches can consume significant resources and time, impacting a company’s day-to-day operations and strategic plans.
2. Customers
Customers’ personal information, financial data and other sensitive information may be leaked, bringing the risk of privacy infringement and financial loss. Once customers’ trust is broken, they may choose to switch to other companies, affecting the company’s customer base and market share. Violations may result in disruption of the company’s services and affect the normal use and experience of customers.
3. Suppliers and partners
Corporate violations can lead to supply chain disruptions, affecting suppliers and partners. Suppliers and partners who work with offending companies may suffer reputational damage due to joint and several liability, affecting their business prospects.
For Target’s different stakeholders, the consequences of a data breach are as follows: 1. Target customers: Customers are the biggest victims of data breaches. Once a fraudulent transaction is detected on the credit card, the customer simply contacts the bank to cancel the card, which only takes a few minutes of regular operations. However, once the card is cancelled, customers will have to contact each merchant if they have pending or recurrent transactions. The cancellation of a card can also lead to further hassles, such as making it difficult to return items paid for with a can-celled card. In addition, the serious and long-term consequences of personal data theft cannot be ignored. In addition to the invasion of privacy, identity theft forces the victim to go through the long and difficult process of proving to all parties (merchants, lenders, government authorities, etc.) that they have not done anything wrong. 2. To Target’s shareholders and investors: The data breach has negatively impacted Target’s shareholders and investors. Target faces more than 140 lawsuits, each seeking millions of dollars in damages, as a result of lawsuits and compensation claims stemming from the data breach. Some of them are class actions. Victims accused Target of violating multiple laws, being negligent in how it handled customer data, and waiting too long to publicly disclose the data breach, thereby increasing customers’ vulnerability. 3. Damaged brand image.
1. For Target, the image was severely damaged, it announced a decline in profits and revenue. Target is currently facing over 140 lawsuits, each seeking millions of dollars in damages. It also had a huge impact internally, resulting in the resignation of the CIO and the CEO. And some projects had to move up.
2. For shareholders, suffered a decline in revenue.
3. For customers, faced the risk of identity theft and had to deal with the inconvenience of canceling and replacing their cards.
4. For financial institutions, they had to bear the costs of reissuing cards, customer relations, refunds for fraudulent transactions, investigations, etc.
1 Customer :(1) Loss of personal and payment card data, putting them at risk of identity theft and fraud. (2) It reduces people’s trust in the target brand and increases the negative impression.
2. Financial institutions :(1) More than 15 million illegal debit cards were reissued, which cost a huge amount. (2) Compensate customers for fraudulent transactions.
3. Target company :(1) Compensation leads to an increase in costs, resulting in a decline in profit and revenue. (2) The brand value is eroded, resulting in a large number of consumer losses.
4. Shareholders :(1) The stock price drops and the company’s valuation drops. (2) Class action for damages.
5. Employees :(1) Layoffs and restructuring may occur due to financial problems. (2) Leadership changes in IT and security teams.
In summary, customers faced fraud risks, banks faced reissuing costs, Target faced massive financial losses and lawsuits, and there were negative impacts on shareholders, employees, and Target’s reputation overall.
Financial Losses to Consumers Consumers’ credit and debit card information was stolen, resulting in unauthorized transactions and financial losses.
Financial Losses for Target Facing significant financial losses, including compensation paid to banks, legal fees, and the cost of upgrading security systems. Loss of reputation could result in the loss of years of business. In addition, there are associated legal liabilities.
For Target’s stakeholders, the data breach had different consequences.
For Target customers, the data breach had serious consequences. Their personal information can be compromised, leading to identity theft and fraudulent activity. Customers have to spend a lot of time and effort protecting their identity and contacting various merchants, banks and government agencies to prove they are not involved in any wrongdoing. In addition, customers may face problems such as credit card cancellation, card replacement, cancellation of pending or scheduled transactions, causing them inconvenience and trouble.
For Target employees and shareholders, the data breach also had a significant impact. The Chief Information Officer (CIO) was forced to resign, and the company’s information security and compliance structures and practices were overhauled. In addition, the company has created two key positions, Executive Vice President and Chief Information Security Officer and Executive Vice President and Chief Compliance Officer.
The changes show that the data breach has had a significant impact on Target’s leadership, with many current executives joining the company in the wake of the incident. In addition, Target’s CEO was fired, likely due to a combination of the company’s failed expansion in Canada and a massive data breach that led the board to conclude he was no longer fit to protect the company’s assets. The whole affair has also led to a second look from board members. In addition, the data breach will reduce customers’ trust in Target and affect the image of Target. Overall, the data breach had different consequences for different stakeholders at Target.
The breach had far-reaching consequences for different stakeholders. Customers faced potential identity theft and unauthorized transactions, financial institutions dealt with fraud-related costs and logistical challenges, Target suffered reputational damage, customer trust erosion, and costs related to investigations and remediation.
Explanation:
The incident also highlighted cybersecurity vulnerabilities and spurred law enforcement actionscooperation with law enforcement, and regular security audits are crucial to prevent, detect, and respond effectively to data breaches.
Breach of contract has a significant impact on Target’s stakeholders.
Target faces more than 140 lawsuits, each seeking millions of dollars in compensation, some of which are class actions. Financial institutions, consumers and shareholders constitute three groups of litigation respectively. Banks, in particular, believe that Target should bear all the expenses caused by data leakage, including a large number of reissued cards, customer relationship management, fraudulent transaction refund, investigation and so on. It is estimated that the cost of re-issuing a card is between $5 and $15. As of February 2014, more than 15.3 million debit and credit cards need to be replaced. However, banks can usually only recover a small part of the costs, because according to the terms of the contract between merchants and credit card companies, these costs are borne by banks. In addition, Target’s data leakage incident also led to the resignation of the Chief Information Officer (CIO). For consumers, although it is relatively simple to find and report fraudulent transactions, canceling cards will bring subsequent troubles, such as dealing with pending or repeated transactions and possible identity theft. Victims need to invest a lot of time and energy to restore their identities. Although IT is estimated that financial institutions alone will lose more than $200 million due to Target data theft, all parties in the industry (financial institutions, IT industry and businesses) have not taken necessary protective measures, mainly because of the huge investment required.
First, Customers are the biggest victims of data breaches. Once a fraudulent transaction is detected on the card, the customer simply contacts the bank to cancel the card, which takes only a few minutes of routine operations. However, once the card is cancelled, customers must contact each merchant if they have outstanding or duplicate transactions. Cancelling a credit card can also lead to further hassles, such as difficulty returning items paid for with a cancelled credit card. Moreover, the serious and long-term consequences of personal data theft cannot be ignored. In addition to violating privacy, identity theft forces victims to go through the process of claiming to all parties (merchants, lenders, government departments, etc.) that they have done nothing wrong. Second, The data breach had a negative impact on Target’s shareholders and investors. Target faces more than 140 lawsuits, each seeking millions of dollars in damages, as a result of lawsuits and claims stemming from the data breach. Some of them are class actions. Victims have accused Target of violating multiple laws, being negligent in its handling of customer data, and increasing the vulnerability of customers by waiting too long to publicly disclose the data breach. Lastly, Each company is seeking millions of dollars in damages due to lawsuits and claims stemming from the data breach. Some of them are class actions. Victims have accused Target of violating multiple laws, being negligent in its handling of customer data, and increasing the vulnerability of customers by waiting too long to publicly disclose the data breach.
For the first time, the Target brand scored negatively in all surveys of consumer perceptions. These negative sentiments were reflected in the company’s fourth-quarter results. Indeed, Target announced a 46% decline in profits ($520 million compared to $961 million in the same period the previous year) and a 5.3% drop in revenue, which management attributed to fearful shoppers. The exodus of customers and the costs related to the breach affected not only the quarterly results, but also full-year results, which fell far short of Wall Street’s targets. It should be noted, however, that the difficulties resulting from the company’s expansion into Canada were a contributing factor in the missed targets.’ On February 1,2014, Target reported that it had spent $61 million responding to the breach, but that this amount would be offset by $100 million worth of cyber insurance held by Target.? However, experts speculate that, when all is said and done, the total cost of the breach will exceed $500 million, and may even approach the $1-billion mark. This amount includes the reimbursement of banks for card reissuing, all activities related to communication and customer management, fines for non-compliance with the PCI DSS standard due to the vulnerability of the external vendor’s authentication method, the cost of credit monitoring for the tens of millions of customers affected by the breach and the huge legal costs for several years to come.
It is difficult to predict the long-term financial impact of the data breach. Target is currently facing over 140 lawsuits, each seeking millions of dollars in damages. Several are class-action suits. The victims accuse Target of violating several laws, of negligence in its handling of customer data and of waiting too long to publicly disclose the breach, thereby increasing the vulnerability of its customers. On May 14, 2014,the court divided the lawsuits into threegroups: financial institutions,3 consumers and shareholders. The banks are at the heart of these suits (they alone account for 29 of them) and believe that Target should reimburse them for all costs arising from the breach, including the massive reissuing of cards, customer relations, refunds for fraudulent transactions, investigations, ete. Depending on the source, it is estimated to cost between $5 and$15 to reissue a card; between the announcement of the breach and February 2014, over 15.3 million debit and credit cards had to be replaced. Banks usually recover no more than a minuscule portion of the costs involved4 because they are liable for these costs under the contract clauses established between merchants and credit card companies.
In addition to the effect on Target’s bottom line, the breach also had a huge impact internally. On March 5, 2014, Target announced the“resignation”of its Chief Information Officer (CIO).
Has different consequences for different stakeholders.
1. Management: The CIO resigns, and management personnel of different levels are dismissed.
2. Shareholders: The stock price has plummeted, income has decreased, and investment returns have decreased.
3. Government agencies: Faced with doubts about inadequate public regulation.
4. Public: There is a possibility of personal information leakage, credit card theft, and other issues.
In the fourth quarter of 2013, profits decreased by 46% and revenue decreased by 5.3%. Consumer trust in the brand has plummeted, resulting in a negative consumer perception score and a decrease in store traffic. Target faces over 140 lawsuits, including class action lawsuits from financial institutions, consumers, and shareholders. This intrusion has highlighted vulnerabilities in the security practices of suppliers such as Fazio Mechanical Services, leading to increased scrutiny and the need for stronger security measures in supplier relationships.
The data breach had a huge impact. First of all, the failure to work safely will directly reduce the credibility of the company. In other words, for the target customers, their information may be leaked at any time, which will bring difficult to predict the loss of economic and personal safety. This means that customers will most likely cancel their cooperation with the company. Second, large-scale malfeasance can destabilize corporate governance. The CIO of Target was forced to resign. The company has added two key positions, Executive vice President and Chief Information Security Officer and Executive Vice President and Chief Compliance Officer, all from outside positions.
The company itself: Default not only leads to direct economic losses, but also damages the company’s reputation, reduces brand value, and may face regulatory penalties and stricter supervision.
Shareholders and investors: A default would hit investor confidence, resulting in lower share prices, reduced shareholder wealth, and possible risk of legal action.
Creditors: A corporate default will increase credit risk, damage the reputation of creditors, and may result in collateral losses.
Suppliers and partners: Default will affect the recovery of suppliers’ receivables, disrupt long-term relationships, and affect the stability of the supply chain.
Employees: A default can lead to a deterioration in the company’s financial position, affect employee pay and benefits, and increase the risk of job loss.
Customer: Breach of contract may cause the company to be unable to provide products or services steadily, harm customer satisfaction and loyalty, and even lead to legal disputes.
Violations have serious consequences for Target stakeholders. First, banks and financial institutions had to cancel the affected cards and reissue new ones, resulting in huge costs and labor input. Second, consumers have to contact various merchants to solve the problems caused by the cancellation of the card, which may include the inability to return or payment difficulties. In addition, the theft of personal data can also lead to the risk of identity theft and personal privacy leakage, and consumers need to spend a lot of time and energy to protect their identity and prove their innocence. Finally, Target itself has suffered a serious negative impact, including brand image damage, sales decline and profit decline. In conclusion, the irregularities impose a significant financial and significant loss of trust on Target stakeholders.
The impact of Target data breach on various stakeholders includes:
1. Shareholders and investors: Target’s stock price plummeted significantly after the data breach incident, resulting in shareholder losses. The company’s fourth quarter profit decreased by 46% and revenue decreased by 5.3%, affecting investor returns.
2. Customers: Millions of customers have their personal information stolen, including credit card information, putting them at risk of fraud and identity theft. Target has to bear the cost of reissuing cards for the bank, but customers still face inconvenience and potential economic losses. Target provides credit monitoring services to affected customers, but this has not completely alleviated the damage to their trust and loyalty.
3. Employees: Employees face increased workload and pressure as the company strives to respond to data breach incidents and mitigate their impact. Employee morale may be affected, especially those working in the customer service department who have to deal with angry and worried customers. The data breach incident also damaged Target’s reputation, which may have a negative impact on employee pride and sense of belonging.
4. Suppliers and partners: Target’s reputation damage may reduce its attractiveness to suppliers and other business partners. This may affect pricing, contract terms, and other commercial transactions. Suppliers may also face stricter scrutiny and regulation due to their association with Target.
5. Community and society: Data breach incidents emphasize the importance of data security and consumer privacy, leading to stricter scrutiny and regulation of the retail industry. Target has contributed funds to support public awareness programs, reflecting the social impact of data breaches.
The financial outlook is in brief: profit down 46% and profit 5.3% in the fourth quarter of 2013. The release of this data would allow companies to incur direct matching costs of several million dollars, including $61 million, and potential long-term costs of more than $500 million.
Loss of confidence: consumer confidence in the brand is seriously compromised. Their faith has been weakened and falsehood has been reduced.
Legal consequences: more than 140 disputes against targets such as financial institutions, consumers, shareholders, etc.
Leadership change = non-compliance results in the resignation of the CEO and possibly the resignation of the President. The company has reorganized its safety and policy group to prevent such incidents from happening again.
The consumer
Fraud and inconvenience: sending credit card and renovation data to millions of customers leads to inappropriate transactions, simplifications and serious hurdles.
Identity theft: long-term risks and consequences for consumers.
Business costs: this is a huge amount if Banks use more than 1.5 million new CARDS to renew their credit CARDS and business relationships. For example, JP Morgan had to temporarily restrict the credit CARDS of aggrieved customers.
Legal action: financial institutions have taken legal action against their target customers to reduce costs.
Suppliers and third parties:
Trust and security: we do not disclose flaws in the security policy of suppliers, such as machine manufacturers. This requires additional assessment, enhanced security measures in supplier relations.
Legal and regulatory Implications: policy change: data sharing has prompted discussions in the us senate on data protection mechanisms, including the use of computer chips and encryption techniques to improve payment security.
Liability provisions: liability for fraud is transferred to the weakest link in the security chain and new provisions are introduced to encourage stakeholders to improve the system.
The consequences of default for stakeholders include:
* Financial impact: This data breach cost the company millions of dollars in immediate response costs.
* Reputational damage: Consumer trust in the brand has plummeted.
* Legal implications: Target faces multiple lawsuits, including class-action lawsuits from financial institutions, consumers and shareholders.
* Leadership change: The incident led to the resignation of the chief information officer and ultimately the CEO. Consumers: Fraud and inconvenience: Millions of customers had their credit and debit card information compromised, resulting in fraudulent transactions, card cancellations and major inconveniences. Identity theft: Consumers are exposed to the risk of identity theft and the associated long-term consequences.
* Operating costs: Banks incur significant costs in reissuing cards and managing customer relationships.
This accident has had a significant impact:
1. Target’s image has been severely damaged, and the company has been heavily criticized for failing to take action on the initial alert, delaying disclosure of violations, and the inability of the customer service department to respond to customers.
2. The company’s performance has been affected, with a significant year-on-year decrease in profits.
3. Target may need to spend over $500 million to carry out the aftermath work for this vulnerability.
Target has faced over a hundred lawsuits from financial institutions, consumers, and shareholders, each demanding millions of dollars in compensation, making the long-term financial impact difficult to estimate.
5. For Target’s internal employees, this vulnerability led to the resignation of the Chief Information Officer, a comprehensive reform of the security structure, and ultimately the dismissal of the CEO. The company’s ongoing projects were also affected.
6.In addition, this incident has had a profound impact on all stakeholder groups, including significant financial losses for shareholders, privacy risks and inconveniences for customers, damage to the reputation of suppliers and partners, and social impacts surrounding data security and consumer privacy.
This breach had a huge impact internally which led to the “resignation” of Target’s Chief Information Officer and CEO.Then Target announced two key positions :Executive Vice-President and Chief Information Security Officer and Executive Vice-President and Chief Compliance Officer to be recruited externally.These events might force a review of the presence of certain members of the Board themselves and have significant repercussions on Target’s leadership.
Shareholders and Investors:
1.Target’s share price dropped significantly following the announcement of the breach, leading to losses for shareholders.
2.The company’s profits declined by 46% in the fourth quarter, and revenue dropped by 5.3%, affecting investors’ returns.
3.The missed Wall Street targets for both quarterly and full-year results further eroded investor confidence.
Customers:
1.Millions of customers’ personal data were stolen, including credit card information, putting them at risk of fraud and identity theft.
2.Target had to reimburse banks for card reissuing costs, but customers still faced inconvenience and potential financial losses.
3.Target offered credit monitoring services to affected customers, but this did not fully mitigate the damage to their trust and loyalty.
Employees:
1.Employees faced increased workload and stress as the company scrambled to respond to the breach and mitigate its impact.
2.Morale may have been affected, especially among those working in customer service who had to deal with angry and concerned customers.
3.The breach also damaged Target’s reputation, which can negatively impact employees’ sense of pride and belonging.
Suppliers and Partners:
1.Target’s reputational damage may have made it a less attractive partner for suppliers and other business partners.
2.This could affect pricing, terms of contract, and other business deals.
3.Suppliers may also have faced increased scrutiny and regulation due to their association with Target.
Community and Society:
1.The breach highlighted the importance of data security and consumer privacy, leading to increased scrutiny and regulation in the retail industry.
2.Target’s response to the breach (or lack thereof) became a case study for other companies to learn from or avoid.
3.Target contributed financially to public awareness programs around cybersecurity, reflecting the societal impact of the breach.
In summary, the Target data breach had far-reaching consequences for all stakeholder classes, including significant financial losses for shareholders, privacy risks and inconvenience for customers, increased stress and workload for employees, reputational damage for suppliers and partners, and societal implications around data security and consumer privacy.
For Target itself, Target reported a significant decline in profits and revenue due to decreased customer confidence and increased costs associated with card reissuance and customer management.
For financial institutions, particularly banks, the cost of issuing new cards and managing fraudulent transactions post-breach was substantial. However, banks typically recover only a small portion of these costs under merchant-card company contract clauses.
The immediate consequences for customers are the inconvenience of cancelling their credit cards, which can lead to identity theft if personal data is stolen, resulting in potential financial loss.
Financial Impact: Target reported a 46% decline in profits for the fourth quarter of 2013 and a 5.3% drop in revenue. The breach cost the company millions in immediate response efforts, including $61 million in expenses and potential long-term costs exceeding $500 million.
Reputational Damage: Consumer trust in the brand plummeted, leading to negative consumer perception scores and reduced foot traffic in stores.
Legal Repercussions: Target faced over 140 lawsuits, including class-action suits from financial institutions, consumers, and shareholders.
Leadership Changes: The breach led to the resignation of the CIO and eventually the CEO. The company restructured its security and compliance teams to prevent future incidents.
Consumers:
Fraud and Inconvenience: Millions of customers had their credit and debit card information compromised, leading to fraudulent transactions, card cancellations, and significant inconvenience.
Identity Theft: Consumers face the risk of identity theft and the associated long-term consequences.
Operational Costs: Banks incurred substantial costs reissuing over 15.3 million cards and managing customer relations. JP Morgan Chase, for instance, had to place temporary limits on card usage for affected customers.
Legal Actions: Financial institutions pursued lawsuits against Target to recover costs related to the breach.
Vendors and Third Parties:
Trust and Security: The breach highlighted vulnerabilities in the security practices of vendors like Fazio Mechanical Services, leading to increased scrutiny and the need for stronger security measures in vendor relationships.
Regulatory and Legislative Impact:Policy Changes: The breach prompted discussions in the U.S. Senate on data protection laws and led to industry initiatives like the shift to chip-and-PIN technology to enhance payment security.
Liability Rules: New rules were implemented to shift fraud liability to the weakest link in the security chain, encouraging stakeholders to upgrade their systems.
The consequences of the breach for the stakeholders were significant. Target’s image suffered greatly, resulting in negative consumer perception and a 46% decline in profits in the fourth quarter of 2013. Revenue dropped by 5.3%, attributed to fearful shoppers. The breach cost Target $61 million initially, with total costs potentially exceeding $500 million, including reimbursement to banks, communication expenses, customer management, PCI DSS fines, credit monitoring, and legal fees. Target faced over 140 lawsuits from financial institutions, consumers, and shareholders. Internally, the breach led to the resignation of the CIO, an overhaul of the security structure, and the eventual dismissal of the CEO .
Financial Impact: Target’s profits fell by 46% in the fourth quarter of 2013, from $961 million to $520 million, with a 5.3% drop in revenue. The breach costs were estimated to exceed $500 million, potentially reaching $1 billion, covering card reissuing, customer management, credit monitoring, legal fees, and fines.
Leadership Changes: The breach led to the resignation of the CIO and the departure of the CEO, prompting the creation of new executive roles focused on information security and compliance.
Reputation Damage: Target’s brand reputation took a significant hit, particularly as the breach occurred during the pre-Christmas shopping season, affecting consumer trust.
-Consumers: Risk of financial loss, disclosure of personally identifiable information.
-Companies: Loss of customer trust, financial loss, damage to company goodwill.
-Shareholders:Potential reduction in stock value, resulting in financial loss.
-Employees:As the company’s financial situation deteriorates, employees face income problems and increased workloads, employees need to work harder to restore the company’s goodwill.
-Community:Decrease in tax revenue and decrease in local government tax revenue due to decrease in sales.
-Business partners:Some business partners are facing contractual implications due to data security clauses in the agreement with Target.
(1) Shareholders: Default may cause investors to lose confidence in the company’s prospects, leading to a decline in stock prices and a decrease in shareholder wealth. In some cases, shareholders may face legal action for a company’s breach of contract, especially when the breach involves improper corporate governance or insufficient information disclosure.
(2) Creditors: Default events may increase the company’s credit risk, affect the reputation and position of creditors in the market, and result in collateral losses.
(3) Employee: Breach of contract may lead to a deterioration of the company’s financial situation, which in turn affects employee salaries and benefits. If the company is in trouble due to default, employees may face the risk of unemployment.
(4) Supplier: Suppliers may not be able to collect the company’s accounts payable on time, resulting in liquidity issues. Breach of contract may disrupt the long-term cooperative relationship between the company and suppliers, affecting the stability and efficiency of the supply chain.
(5) Customer: Breach of contract may result in the company being unable to provide stable products or services, affecting customer satisfaction and loyalty. In some cases, customers may have legal disputes with the company due to the company’s breach of contract, such as contract breach litigation, etc
Breach of contract will have far-reaching consequences for every stakeholder of the target company. Firstly, for shareholders, default may lead to damage to the company’s reputation, a decline in stock prices, and thus directly affect its investment returns. Secondly, creditors may face the risk of financial losses due to the company’s inability to repay on time, which may lead them to demand higher interest rates or stricter repayment conditions. For employees, default may lead to a deterioration of the company’s financial situation, which in turn affects salary payments and welfare benefits, and may even lead to adverse consequences such as layoffs.
In addition, suppliers and partners may lose trust due to company defaults, leading to supply chain disruptions or partnership breakdowns. For consumers, if a company’s breach of contract involves product or service quality issues, it may harm their rights, lead to damage to brand image, and thus affect the company’s market competitiveness.
In summary, breach of contract will have varying degrees of negative impact on various stakeholders of the target company. Therefore, the company should try to avoid breach of contract and maintain good business reputation and cooperative relationships.
For Target Company:
For the bottom line,
(1) In terms of image, he was severely criticized for failing to take action on the initial alert, delaying the disclosure of violations, and the inability of the customer service department to respond to customers. And for the first time, it scored negative in all consumer perception surveys.
(2) On the customer side, the cost of customer churn and default has affected quarterly and annual performance, far from meeting Wall Street’s goals. The difficulties brought about by the company’s expansion in Canada were a factor that led to the failure to achieve its goals.
(3) Target faces multiple lawsuits, each demanding millions of dollars in compensation.
For internal Targett,
(1) Target announces the resignation of its Chief Information Officer
(2) The first step is to comprehensively reform its information security and compliance structure and practices.
(3) Step 2, announce the establishment of two key positions that will be recruited from external sources
For Target’s project,
(1) Implement a chip card and personal identification number payment (chip and PIN) system six months in advance.
For customers:
(1) If the card is cancelled and the cardholder has pending or recurring transactions, they must contact every relevant merchant. Canceling credit cards can also lead to further headaches.
(2) In addition to violating personal privacy, the resulting identity theft also forces victims to embark on a long and arduous process to defend their identity and prove to all parties that they have not committed any illegal acts.
The stakeholders’ interests suffered significant short-term losses, and future gains will also decrease, potentially causing further losses due to ongoing lawsuits. This crisis, caused by the failure to act on the initial alerts, the delay in making the breach public, and the inability of its customer service department to respond to customers, will lead to a loss of trust from customers and the market. Consequently, this will result in customer attrition, lower market and investor expectations, and a decline in stock prices, thereby affecting the stakeholders’ interests. If the company fails to restore its reputation promptly, it will lose market share to competitors, impacting sales performance and further affecting shareholder returns. Additionally, the legal proceedings stemming from the data breach represent a significant future cost.
According to the material “…the Target brand scored negatively in all surveys of consumer perceptions. These negative sentiments were reflected in the company’s fourth-quarter results. Indeed, Target announced a 46% decline in profits and a 5.3% drop in revenue, which management attributed to fearful shoppers…The exodus of customers and the costs related to the breach affected not only the quarterly results, but also full-year results, which fell far short of Wall Street’s targets……However, experts speculate that, when all is said and done, the total cost of the breach will exceed $500 million, and may even approach the $1-billion mark……It is difficult to predict the long-term financial impact of the data breach. Target is currently facing over 140 lawsuits, each seeking millions of dollars in damages.
1. The enterprise itself
The company may face direct financial losses. Breaches can seriously damage a company’s reputation, lead to a decline in customer trust and affect long-term brand value. Companies may face penalties and legal action from regulators, which not only increases legal costs, but may also lead to stricter regulatory oversight. Dealing with breaches can consume significant resources and time, impacting a company’s day-to-day operations and strategic plans.
2. Customers
Customers’ personal information, financial data and other sensitive information may be leaked, bringing the risk of privacy infringement and financial loss. Once customers’ trust is broken, they may choose to switch to other companies, affecting the company’s customer base and market share. Violations may result in disruption of the company’s services and affect the normal use and experience of customers.
3. Suppliers and partners
Corporate violations can lead to supply chain disruptions, affecting suppliers and partners. Suppliers and partners who work with offending companies may suffer reputational damage due to joint and several liability, affecting their business prospects.
For Target’s different stakeholders, the consequences of a data breach are as follows: 1. Target customers: Customers are the biggest victims of data breaches. Once a fraudulent transaction is detected on the credit card, the customer simply contacts the bank to cancel the card, which only takes a few minutes of regular operations. However, once the card is cancelled, customers will have to contact each merchant if they have pending or recurrent transactions. The cancellation of a card can also lead to further hassles, such as making it difficult to return items paid for with a can-celled card. In addition, the serious and long-term consequences of personal data theft cannot be ignored. In addition to the invasion of privacy, identity theft forces the victim to go through the long and difficult process of proving to all parties (merchants, lenders, government authorities, etc.) that they have not done anything wrong. 2. To Target’s shareholders and investors: The data breach has negatively impacted Target’s shareholders and investors. Target faces more than 140 lawsuits, each seeking millions of dollars in damages, as a result of lawsuits and compensation claims stemming from the data breach. Some of them are class actions. Victims accused Target of violating multiple laws, being negligent in how it handled customer data, and waiting too long to publicly disclose the data breach, thereby increasing customers’ vulnerability. 3. Damaged brand image.
1. For Target, the image was severely damaged, it announced a decline in profits and revenue. Target is currently facing over 140 lawsuits, each seeking millions of dollars in damages. It also had a huge impact internally, resulting in the resignation of the CIO and the CEO. And some projects had to move up.
2. For shareholders, suffered a decline in revenue.
3. For customers, faced the risk of identity theft and had to deal with the inconvenience of canceling and replacing their cards.
4. For financial institutions, they had to bear the costs of reissuing cards, customer relations, refunds for fraudulent transactions, investigations, etc.
1 Customer :(1) Loss of personal and payment card data, putting them at risk of identity theft and fraud. (2) It reduces people’s trust in the target brand and increases the negative impression.
2. Financial institutions :(1) More than 15 million illegal debit cards were reissued, which cost a huge amount. (2) Compensate customers for fraudulent transactions.
3. Target company :(1) Compensation leads to an increase in costs, resulting in a decline in profit and revenue. (2) The brand value is eroded, resulting in a large number of consumer losses.
4. Shareholders :(1) The stock price drops and the company’s valuation drops. (2) Class action for damages.
5. Employees :(1) Layoffs and restructuring may occur due to financial problems. (2) Leadership changes in IT and security teams.
In summary, customers faced fraud risks, banks faced reissuing costs, Target faced massive financial losses and lawsuits, and there were negative impacts on shareholders, employees, and Target’s reputation overall.
Financial Losses to Consumers Consumers’ credit and debit card information was stolen, resulting in unauthorized transactions and financial losses.
Financial Losses for Target Facing significant financial losses, including compensation paid to banks, legal fees, and the cost of upgrading security systems. Loss of reputation could result in the loss of years of business. In addition, there are associated legal liabilities.
For Target’s stakeholders, the data breach had different consequences.
For Target customers, the data breach had serious consequences. Their personal information can be compromised, leading to identity theft and fraudulent activity. Customers have to spend a lot of time and effort protecting their identity and contacting various merchants, banks and government agencies to prove they are not involved in any wrongdoing. In addition, customers may face problems such as credit card cancellation, card replacement, cancellation of pending or scheduled transactions, causing them inconvenience and trouble.
For Target employees and shareholders, the data breach also had a significant impact. The Chief Information Officer (CIO) was forced to resign, and the company’s information security and compliance structures and practices were overhauled. In addition, the company has created two key positions, Executive Vice President and Chief Information Security Officer and Executive Vice President and Chief Compliance Officer.
The changes show that the data breach has had a significant impact on Target’s leadership, with many current executives joining the company in the wake of the incident. In addition, Target’s CEO was fired, likely due to a combination of the company’s failed expansion in Canada and a massive data breach that led the board to conclude he was no longer fit to protect the company’s assets. The whole affair has also led to a second look from board members. In addition, the data breach will reduce customers’ trust in Target and affect the image of Target. Overall, the data breach had different consequences for different stakeholders at Target.
The breach had far-reaching consequences for different stakeholders. Customers faced potential identity theft and unauthorized transactions, financial institutions dealt with fraud-related costs and logistical challenges, Target suffered reputational damage, customer trust erosion, and costs related to investigations and remediation.
Explanation:
The incident also highlighted cybersecurity vulnerabilities and spurred law enforcement actionscooperation with law enforcement, and regular security audits are crucial to prevent, detect, and respond effectively to data breaches.
Breach of contract has a significant impact on Target’s stakeholders.
Target faces more than 140 lawsuits, each seeking millions of dollars in compensation, some of which are class actions. Financial institutions, consumers and shareholders constitute three groups of litigation respectively. Banks, in particular, believe that Target should bear all the expenses caused by data leakage, including a large number of reissued cards, customer relationship management, fraudulent transaction refund, investigation and so on. It is estimated that the cost of re-issuing a card is between $5 and $15. As of February 2014, more than 15.3 million debit and credit cards need to be replaced. However, banks can usually only recover a small part of the costs, because according to the terms of the contract between merchants and credit card companies, these costs are borne by banks. In addition, Target’s data leakage incident also led to the resignation of the Chief Information Officer (CIO). For consumers, although it is relatively simple to find and report fraudulent transactions, canceling cards will bring subsequent troubles, such as dealing with pending or repeated transactions and possible identity theft. Victims need to invest a lot of time and energy to restore their identities. Although IT is estimated that financial institutions alone will lose more than $200 million due to Target data theft, all parties in the industry (financial institutions, IT industry and businesses) have not taken necessary protective measures, mainly because of the huge investment required.
First, Customers are the biggest victims of data breaches. Once a fraudulent transaction is detected on the card, the customer simply contacts the bank to cancel the card, which takes only a few minutes of routine operations. However, once the card is cancelled, customers must contact each merchant if they have outstanding or duplicate transactions. Cancelling a credit card can also lead to further hassles, such as difficulty returning items paid for with a cancelled credit card. Moreover, the serious and long-term consequences of personal data theft cannot be ignored. In addition to violating privacy, identity theft forces victims to go through the process of claiming to all parties (merchants, lenders, government departments, etc.) that they have done nothing wrong. Second, The data breach had a negative impact on Target’s shareholders and investors. Target faces more than 140 lawsuits, each seeking millions of dollars in damages, as a result of lawsuits and claims stemming from the data breach. Some of them are class actions. Victims have accused Target of violating multiple laws, being negligent in its handling of customer data, and increasing the vulnerability of customers by waiting too long to publicly disclose the data breach. Lastly, Each company is seeking millions of dollars in damages due to lawsuits and claims stemming from the data breach. Some of them are class actions. Victims have accused Target of violating multiple laws, being negligent in its handling of customer data, and increasing the vulnerability of customers by waiting too long to publicly disclose the data breach.
For the first time, the Target brand scored negatively in all surveys of consumer perceptions. These negative sentiments were reflected in the company’s fourth-quarter results. Indeed, Target announced a 46% decline in profits ($520 million compared to $961 million in the same period the previous year) and a 5.3% drop in revenue, which management attributed to fearful shoppers. The exodus of customers and the costs related to the breach affected not only the quarterly results, but also full-year results, which fell far short of Wall Street’s targets. It should be noted, however, that the difficulties resulting from the company’s expansion into Canada were a contributing factor in the missed targets.’ On February 1,2014, Target reported that it had spent $61 million responding to the breach, but that this amount would be offset by $100 million worth of cyber insurance held by Target.? However, experts speculate that, when all is said and done, the total cost of the breach will exceed $500 million, and may even approach the $1-billion mark. This amount includes the reimbursement of banks for card reissuing, all activities related to communication and customer management, fines for non-compliance with the PCI DSS standard due to the vulnerability of the external vendor’s authentication method, the cost of credit monitoring for the tens of millions of customers affected by the breach and the huge legal costs for several years to come.
It is difficult to predict the long-term financial impact of the data breach. Target is currently facing over 140 lawsuits, each seeking millions of dollars in damages. Several are class-action suits. The victims accuse Target of violating several laws, of negligence in its handling of customer data and of waiting too long to publicly disclose the breach, thereby increasing the vulnerability of its customers. On May 14, 2014,the court divided the lawsuits into threegroups: financial institutions,3 consumers and shareholders. The banks are at the heart of these suits (they alone account for 29 of them) and believe that Target should reimburse them for all costs arising from the breach, including the massive reissuing of cards, customer relations, refunds for fraudulent transactions, investigations, ete. Depending on the source, it is estimated to cost between $5 and$15 to reissue a card; between the announcement of the breach and February 2014, over 15.3 million debit and credit cards had to be replaced. Banks usually recover no more than a minuscule portion of the costs involved4 because they are liable for these costs under the contract clauses established between merchants and credit card companies.
In addition to the effect on Target’s bottom line, the breach also had a huge impact internally. On March 5, 2014, Target announced the“resignation”of its Chief Information Officer (CIO).
Has different consequences for different stakeholders.
1. Management: The CIO resigns, and management personnel of different levels are dismissed.
2. Shareholders: The stock price has plummeted, income has decreased, and investment returns have decreased.
3. Government agencies: Faced with doubts about inadequate public regulation.
4. Public: There is a possibility of personal information leakage, credit card theft, and other issues.
In the fourth quarter of 2013, profits decreased by 46% and revenue decreased by 5.3%. Consumer trust in the brand has plummeted, resulting in a negative consumer perception score and a decrease in store traffic. Target faces over 140 lawsuits, including class action lawsuits from financial institutions, consumers, and shareholders. This intrusion has highlighted vulnerabilities in the security practices of suppliers such as Fazio Mechanical Services, leading to increased scrutiny and the need for stronger security measures in supplier relationships.
The data breach had a huge impact. First of all, the failure to work safely will directly reduce the credibility of the company. In other words, for the target customers, their information may be leaked at any time, which will bring difficult to predict the loss of economic and personal safety. This means that customers will most likely cancel their cooperation with the company. Second, large-scale malfeasance can destabilize corporate governance. The CIO of Target was forced to resign. The company has added two key positions, Executive vice President and Chief Information Security Officer and Executive Vice President and Chief Compliance Officer, all from outside positions.
The company itself: Default not only leads to direct economic losses, but also damages the company’s reputation, reduces brand value, and may face regulatory penalties and stricter supervision.
Shareholders and investors: A default would hit investor confidence, resulting in lower share prices, reduced shareholder wealth, and possible risk of legal action.
Creditors: A corporate default will increase credit risk, damage the reputation of creditors, and may result in collateral losses.
Suppliers and partners: Default will affect the recovery of suppliers’ receivables, disrupt long-term relationships, and affect the stability of the supply chain.
Employees: A default can lead to a deterioration in the company’s financial position, affect employee pay and benefits, and increase the risk of job loss.
Customer: Breach of contract may cause the company to be unable to provide products or services steadily, harm customer satisfaction and loyalty, and even lead to legal disputes.
Violations have serious consequences for Target stakeholders. First, banks and financial institutions had to cancel the affected cards and reissue new ones, resulting in huge costs and labor input. Second, consumers have to contact various merchants to solve the problems caused by the cancellation of the card, which may include the inability to return or payment difficulties. In addition, the theft of personal data can also lead to the risk of identity theft and personal privacy leakage, and consumers need to spend a lot of time and energy to protect their identity and prove their innocence. Finally, Target itself has suffered a serious negative impact, including brand image damage, sales decline and profit decline. In conclusion, the irregularities impose a significant financial and significant loss of trust on Target stakeholders.
The impact of Target data breach on various stakeholders includes:
1. Shareholders and investors: Target’s stock price plummeted significantly after the data breach incident, resulting in shareholder losses. The company’s fourth quarter profit decreased by 46% and revenue decreased by 5.3%, affecting investor returns.
2. Customers: Millions of customers have their personal information stolen, including credit card information, putting them at risk of fraud and identity theft. Target has to bear the cost of reissuing cards for the bank, but customers still face inconvenience and potential economic losses. Target provides credit monitoring services to affected customers, but this has not completely alleviated the damage to their trust and loyalty.
3. Employees: Employees face increased workload and pressure as the company strives to respond to data breach incidents and mitigate their impact. Employee morale may be affected, especially those working in the customer service department who have to deal with angry and worried customers. The data breach incident also damaged Target’s reputation, which may have a negative impact on employee pride and sense of belonging.
4. Suppliers and partners: Target’s reputation damage may reduce its attractiveness to suppliers and other business partners. This may affect pricing, contract terms, and other commercial transactions. Suppliers may also face stricter scrutiny and regulation due to their association with Target.
5. Community and society: Data breach incidents emphasize the importance of data security and consumer privacy, leading to stricter scrutiny and regulation of the retail industry. Target has contributed funds to support public awareness programs, reflecting the social impact of data breaches.
The financial outlook is in brief: profit down 46% and profit 5.3% in the fourth quarter of 2013. The release of this data would allow companies to incur direct matching costs of several million dollars, including $61 million, and potential long-term costs of more than $500 million.
Loss of confidence: consumer confidence in the brand is seriously compromised. Their faith has been weakened and falsehood has been reduced.
Legal consequences: more than 140 disputes against targets such as financial institutions, consumers, shareholders, etc.
Leadership change = non-compliance results in the resignation of the CEO and possibly the resignation of the President. The company has reorganized its safety and policy group to prevent such incidents from happening again.
The consumer
Fraud and inconvenience: sending credit card and renovation data to millions of customers leads to inappropriate transactions, simplifications and serious hurdles.
Identity theft: long-term risks and consequences for consumers.
Business costs: this is a huge amount if Banks use more than 1.5 million new CARDS to renew their credit CARDS and business relationships. For example, JP Morgan had to temporarily restrict the credit CARDS of aggrieved customers.
Legal action: financial institutions have taken legal action against their target customers to reduce costs.
Suppliers and third parties:
Trust and security: we do not disclose flaws in the security policy of suppliers, such as machine manufacturers. This requires additional assessment, enhanced security measures in supplier relations.
Legal and regulatory Implications: policy change: data sharing has prompted discussions in the us senate on data protection mechanisms, including the use of computer chips and encryption techniques to improve payment security.
Liability provisions: liability for fraud is transferred to the weakest link in the security chain and new provisions are introduced to encourage stakeholders to improve the system.
The consequences of default for stakeholders include:
* Financial impact: This data breach cost the company millions of dollars in immediate response costs.
* Reputational damage: Consumer trust in the brand has plummeted.
* Legal implications: Target faces multiple lawsuits, including class-action lawsuits from financial institutions, consumers and shareholders.
* Leadership change: The incident led to the resignation of the chief information officer and ultimately the CEO. Consumers: Fraud and inconvenience: Millions of customers had their credit and debit card information compromised, resulting in fraudulent transactions, card cancellations and major inconveniences. Identity theft: Consumers are exposed to the risk of identity theft and the associated long-term consequences.
* Operating costs: Banks incur significant costs in reissuing cards and managing customer relationships.
This accident has had a significant impact:
1. Target’s image has been severely damaged, and the company has been heavily criticized for failing to take action on the initial alert, delaying disclosure of violations, and the inability of the customer service department to respond to customers.
2. The company’s performance has been affected, with a significant year-on-year decrease in profits.
3. Target may need to spend over $500 million to carry out the aftermath work for this vulnerability.
Target has faced over a hundred lawsuits from financial institutions, consumers, and shareholders, each demanding millions of dollars in compensation, making the long-term financial impact difficult to estimate.
5. For Target’s internal employees, this vulnerability led to the resignation of the Chief Information Officer, a comprehensive reform of the security structure, and ultimately the dismissal of the CEO. The company’s ongoing projects were also affected.
6.In addition, this incident has had a profound impact on all stakeholder groups, including significant financial losses for shareholders, privacy risks and inconveniences for customers, damage to the reputation of suppliers and partners, and social impacts surrounding data security and consumer privacy.