Target Canada: Lesson from Failure of International Entry

Authors

DOI:

https://doi.org/10.15549/jeecar.v2i2.101

Keywords:

Target Corporation, Canada Retail, International Expansion, Foreign Direct Investment.

Abstract

Target Corporation, the second-largest retailing company in the United States, is well known for its value to guests (customers), continuous innovation, and exceptional guest experience. With a desire for international expansion, Target announced its Foreign Direct Investment (FDI) plans for Target Canada in January 2011.  In August 2012, headquarters opened in Mississauga with 124 store openings following throughout 2013. Two years later an unsuccessful attempt at entering the Canadian retail market resulted in a loss of over $5.4B. Target Canada rushed into its expansion into the Canadian foreign market. Target’s scale was too large and the entrance method was attractive from a price perspective.  As a consequence, Target was unable to efficiently manage the whole supply chain, resulting in an unpleasant shopping experience for the customers.  Finally, the incapability to differentiate itself from other retailers led to an unsuccessful attempt at gaining greater market share from the competition. Despite the fact that Target does not have a plan to enter back into Canada, this case offers suggestions for Target’s location strategy and plausible alternatives when revisiting potential re-entry into the international retail market. Recommendations are given based on what they learned from their first attempt at failed expansion.

References

Martell, A., Ho, S., and Taylor, S. (2014, May 21). An inside look at Target Canada's supply chain gridlock. Reuters. Retrieved from http://www.bnn.ca/News/2014/5/21/Target-Canadas-supply-chain-gridlock-how-Barbie-SUVs-snarled-traffic.aspx

Austen, I. (2014, February 24). Target Push Into Canada Stumbles. The New York Times. Retrieved on May 25, 2015 from http://www.nytimes.com/2014/02/25/business/international/target-struggles-to-compete-in-canada.html?_r=0

Banjo, Shelly (2014, May 7). How Target Missed the Mark in Canada. The Wall Street Journal. Retrieved on May 25, 2015 from http://www.wsj.com/articles/SB10001424052702304655304579548321031549910

Business Development Bank of Canada- BDBC. (October 2013). Mapping your future growth: Five game-changing consumer trends. Business Development Bank of Canada. Retrieved from http://www.bdc.ca/Resources%20Manager/study_2013/consumer_trends_BDC_report.pdf

Dudley, R. (2014, May 25). Wal-Mart’s Everyday Low Prices Fail to Stir Brazilians. Retrieved from http://www.bloomberg.com/news/2014-04-23/wal-mart-s-everyday-low-prices-fail-to-stir-brazilians.html

First Mover Advantage. Pearson Education. nd. Retrieved on May 25, 2015 from http://www.pearsoned.co.uk/bookshop/article.asp?item=312

Grinberg, E. (2011). Missoni for Target Line Creates Black Friday like Demand. Retrieved from CNN Cabe News Network: http://www.cnn.com/2011/09/13/living/missoni-for-target-line-creates-black-friday-like-demand/

In surprise move, Target Corp to pull out of Canada, The Economic Times. (2015, January 15). Retrieved from http://economictimes.indiatimes.com/articleshow/45903261.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Kahle, S. (2014, April 5). The Portfolio of Stephen Kahle. Retrieved from https://zenportfolios.ca/stephenkahle/project_showcase/target-corporation-strategic-marketing-plan

Kopun, F. (2014, February 26) Target Canada losses hit $941 million (U.S.) for 2013. Toronto Star. Retrieved from http://www.thestar.com/business/2014/02/26/target_canada_losses_hit_941million_us_for_2013.htm

Kumar, Kavita. Target’s Canadian rescue aims at prices and supply. Star Tribune. 13 August 2014. Retrieved on May 25, 2015 from http://www.startribune.com/business/271073401.html

Landler, M., Barbaro, M. (2006, August 2). Wal-Mart Finds That Its Formula Doesn’t Fit Every Culture. The New York Times, World Business. Retrieved from http://www.nytimes.com/2006/08/02/business/worldbusiness/02Wal-Mart .html?pagewanted=all&_r=0

Loeb, W. (2013, July 03). Successful Global Growers: What We Can Learn From Wal-Mart, Carrefour, Tesco, Metro. Forbes. Retrieved from http://www.forbes.com/sites/walterloeb/2013/03/07/Wal-Mart -carrefour-tesco-metro-successful-global-growers-what-can-we-learn-from-them/

Martell, A., Ho, S., and Taylor, S (2014, May 21) An inside look at Target Canada's supply chain gridlock. Reuters. Retrieved from http://www.bnn.ca/News/2014/5/21/Target-Canadas-supply-chain-gridlock-how-Barbie-SUVs-snarled-traffic.aspx

McKinnon, J. (2014, August 13). Target Canada Plans Supply Chain, Pricing Moves to Bolster Performance. Wallstreet Journal, Retrieved from http://www.wsj.com/articles/target-canada-plans-supply-chain-pricing-moves-to-bolster-performance-1407935755

Martell, A, Solarina Ho, Susan T. (2014, May 21). Exclusive: Target Canada’s supply chain gridlock: how Barbue SUVs snarled traffic. Reuters. Retrieved from http://www.reuters.com/article/2014/05/21/us-target-canada-exclusive-idUSBREA4K03X20140521

Megits, N. (2014). Managing in the Global Marketplace (p. 326). McGraw Hill.

Nolan, H. (2014, May 21). Why Was Target Canada Such a Disaster? Gawker. Retrieved from at http://gawker.com/why-was-target-canada-such-a-disaster-1579554288

Nolan, H. (2014, May 22). Target’s Canada Woes Highlight Supply Chain Shortfalls. CIO Journal. Retrieved from http://blogs.wsj.com/cio/2014/05/22/targets-canada-woes-highlight-supply-chain-shortfalls/

Our Target Canada Team. YouTube. (2014. June 10). Retrieved from https://www.youtube.com/watch?v=vIBqv2BDU4E

Reuters and Canadian Press. (2014, August 12). Target Canada president aims to ‘reset’ supply chain, improve pricing to win over Canadians. Financial Post. Retrieved from http://business.financialpost.com/2014/08/12/target-canada-chief-aims-to-improve-pricing-products-to-win-over-canadians/

Shaw, Hollie. (July 13, 2011). Target Canada readies marketing plan. Financial Post. Retrieved on May 25, 2015 from http://business.financialpost.com/2011/07/13/target-canada-readies-marketing-plan/

Strauss, M., Krashinsky, S. (2013, January 19). The Target invasion: How pricing will be key to Canadian success. The Globe and Mail. Retrieved from http://www.theglobeandmail.com/globe-investor/the-target-invasion-how-pricing-will-be-key-to-canadian-success/article7550145/?page=all

Strauss, M. (2014, November 19). Target Making Progress, Results 'remain Unacceptable" in Canada. BNN: Business News Network. Retrieved from: http://www.bnn.ca/News/2014/11/19/Target-making-progress-results-remain-unacceptable-in-Canada.aspx

Strauss, M. (2014, August 19). New head of Target Canada plots his course to a turnaround. The Globe and Mail. Retrieved from: http://www.theglobeandmail.com/report-on-business/new-target-canada-chief-outlines-plans-to-fix-empty-shelves-pricing-problems/article20009995/

Srurgeon, J. (2014, May 21). Forget inventory issues, better prices may be in store at Target Canada. Global News. Retrieved from at http://globalnews.ca/news/1344704/forget-inventory-issues-better-prices-may-be-in-store-at-target-canada/

Supply Chain Management-SCM. Investopedia. nd. Retrieved from http://www.investopedia.com/terms/s/scm.asp

Shaw, H. (2014, March 5). Why Target Corp’s online strategy is missing the mark in Canada. Financial Post. Retrieved from: http://business.financialpost.com/2014/03/05/why-target-corps-online-strategy-is-missing-the-mark-in-canada/

Target Canada: Prices To Be Competitive With Other Canadian Stores, Not U.S. Chain, The Huffington Post Canada. (2013. January 30). Retrieved from http://www.huffingtonpost.ca/2013/01/30/target-canada-prices-locations_n_2584098.html

Target to Continue Canadian Expansion in 2014. Target Pressroom. (2014, January 29). Retrieved from http://pressroom.target.com/news/target-to-continue-canadian-expansion-in-2014

Tasker, J. P. (2014, July 21). Target Canada’s failed launch offers lessons for other retailers. CBC News. Retrieved from http://www.cbc.ca/news/business/target-canada-s-failed-launch-offers-lessons-for-other-retailers-1.2711149

Zmuda, N. (2013, February 22). Target Launches First Mass-Media Campaign in Canada. Advertising Age. Retrieved from http://adage.com/article/global-news/target-launches-mass-media-campaign-canada/239981/

Downloads

Published

2015-10-31

How to Cite

Megits, N., & Schuster, J. (2015). Target Canada: Lesson from Failure of International Entry. Journal of Eastern European and Central Asian Research (JEECAR), 2(2), 13. https://doi.org/10.15549/jeecar.v2i2.101

Most read articles by the same author(s)

<< < 1 2 3 > >>