The target machine model is a key part of the compiler that describes the hardware features of the machine where the program will run. The compiler first converts source code into an intermediate form. Then, using the target machine model, it adapts this intermediate code to the specific hardware by considering registers, instruction sets, and memory layout. This adapted code is then turned into machine code that the target machine can execute. This process ensures the program runs correctly and efficiently on the intended hardware. The model does not change the source code but affects how the code is translated into machine instructions.