Target is one of the leading retail chains in the US and is success is based on the model of selling products at the least price possible. One of its expansion strategy involved entry into Canada. However, only two years after its entry in the country, the retail chain pulled out after incurring losses in billions of dollars (Waddell, 2015, pp 1). Then retail chain’s presence in Canada was organized to match the model back in the US. Sensing failure on the Canadian business, the retail chain hired a new CEO and a new president for the operations in Canada but all that turned to be futile. From the onset, Target seemed to be making headway as evidenced by the high level of customers that wanted to visit the store. Moreover, the company’s high reputation was projected to give the retail chain an important leading as they crossed the border (McMahon, 2015). However, the success was short-lived and was only theoretical as the reality turned out to be different.

The strategy used by Target to penetrate the Canadian market turned out to be one of the factors that led to its downfall. The company had acquired Zellers stores in hope of expanding its customer base (Fralic, 2015). To the management, this acquisition would offer the best platform to lure the many Canadian shoppers. Unfortunately, most of the Zellers stores, in their hundreds were located in areas that were not accessible to most of the customers. It is reported that most of these stores were found in rundown shopping centers that were least accessible to the shoppers. In addition, the stores were relatively smaller as compared to the stores that Target had in the United States (Ziobro, 2015). It therefore took a lot of capital to expand these stores to the typical format that Target was accustomed to in the US.

The biggest task that Target had was to set itself apart from the other existing stores in Canada. To accomplish this task, Target engaged in a lot of advertisements that packaged the store as a new neighbor who wished well for the host (Peterson, 2015, pp 1).  In the advertisements, Target had to entice people who had prior experience, in the US, and people who had no experience with the store at all. The entry of the store was therefore launched with pomp featuring advertisements on TV, billboards, social media and print. While this kind of marketing was necessary, it set a high precedence and increased the customers’ expectation of the store. The retail store did not however live up to the expectation and there were notable differences in the pricing in the US and in Canada (Sturgeon, 2015). This price discrepancy made the customers feel like they were being cheated and opted out.

Target’s poor supply chain management was also to blame for the dismal performance in Canada. There were occasional stock-outs owing to the problems in distribution and shelf replenishment (Gollom, 2015). Many customers who had earlier experience with the store in the US found it strange that the store could not keep its shelves full and led to a mass pull out. Moreover, the retail store had no diversity in the products that it sold. In fact, a former employee later complained of having to stick up an entire shelf with one detergent brand because there were no other detergents (Banjo, 2015, pp 2).

Target’s lack of organization and poor implementation of its processes are largely to blame for the poor performance of the store. The management was not in sync with the customer requirements leading to high disappointments. Even when it was clear that customers were not satisfied, it took the management too long to respond to the problems. This lack of organization led to the failure of the retail store and the poor performance.

References

Banjo, S., 2015. Target dumped Canada and people are still pretty darn upset about it. Quartz. Available from: http://qz.com/461147/target-dumped-canada-and-people-are-still-pretty-darn-upset-about-it/ [Accessed 2015].

Dahlhoff, D., 2015. Why Target’s Canadian Expansion Failed. Harvard Business Review. Available from: https://hbr.org/2015/01/why-targets-canadian-expansion-failed [Accessed 2015].

Fralic, S., 2015. Top 5 reasons why Target Canada was an epic failure. Vancouver Sun. Available from: http://www.vancouversun.com/business/commercial-real-estate/shelley fralic reasons target canada epic failure/10732768/story.html [Accessed 2015].

Gollom, M., 2015. Target’s launch into Canada ‘a multifaceted failure’. CBCnews. Available from: http://www.cbc.ca/news/business/target-s-launch-into-canada-a-multifaceted-failure-1.2901789 [Accessed 2015].

McMahon, T., 2015. Missing the mark: Five reasons why Target failed in Canada. The Globe And Mail. Available from: http://www.theglobeandmail.com/report-on-business/missing-the-mark-5-reasons-why-target-failed-in-canad/article22459819/ [Accessed 2015].

Peterson, H., 2015. 5 Reasons Target Failed In Canada. Business Insider. Available from: http://www.businessinsider.com/why-target-canada-failed-2015-1 [Accessed 2015].

Sturgeon, J., 2015. Here’s why Target failed in Canada. Global News Heres Why Target Failed In Canada. Available from: http://globalnews.ca/news/1774769/heres-why-target-failed-in-canada/ [Accessed 2015].

Waddell, N., 2015. Target Canada failure: the overlooked reason for the store’s demise here – Cantech Letter. Cantech Letter. Available from: http://www.cantechletter.com/2015/03/the-overlooked-reason-target-failed-in-canada/ [Accessed 2015].

Ziobro, P., 2015. Target to Exit Canada After Failed Expansion. WSJ. Available from: http://www.wsj.com/articles/target-to-exit-canada-1421328919 [Accessed 2015].

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