Wood 330 Target Canada

Lesson from Failure of International Entry

Industrial Rohit Arora
Engineering Tim Yang
http://www.customerexperienceinsight.com/top-reasons-customer-experience-programs-fail/
Kevin Yuan
 Outline

■ Introduction

■ Reasons for failure

■ Suggestions

■ Conclusion
https://blog.bladecreativebranding.com/5-reasons-target-failed-in-canada/

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 Introduction

■ Background of Target

 Long-standing history Target was established is in 1962

in Roseville, Minnesota

 “Expect More, Pay Less” Target is known to their value to customers

 Well-profitable company Target made 72.6 billion dollars revenue at the end
of 2014

https://laughingsquid.com/a-look-at-early-target-stores-of-the-1960s/ 2
 Introduction (Cont…)

■ International expansion

 Long-term plan Target Canada publically announced their

international expansion plan in 2010

 Multiple marketing channels Target Canada advertised by many media

channels and Canadian celebrities

 Rapid expansion Target Canada opened 124 stores in the first

year

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 Introduction (Cont…)

■ Target Canada customer experience

Target Canada did not have enough inventories

 Empty shelves
in their stores

Target Canada charged higher price than Target

 High pricing US

Target Canada did not have online shopping

 Poor customer service system for their customers

Target Canada lost more than 1 billion dollars

 Huge loss operating revenue

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 Reasons for failure

■ Supply chain management issues

 Location and size of stores Many of Zeller stores were smaller and
were difficult to access

Shipments coming into the warehouse did

 Data integrity not match target’s record in the system

Mismatched order scheduling times

 Lack of communication with vendors between suppliers and retailer

Computers were reporting inventory which

 Mismatched barcodes was not there in stores

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 Reasons for Failure (contd..)

■ Canadian Laws

 Strict packaging laws Product identity must be shown in both English and
French on packaging

Prevents American companies to have their own

 Protectionist tariffs distribution network

■ Pricing strategy

Does not work because Canadian customer were

 Competition oriented pricing familiar with their US prices

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 Reasons for failure (contd…)

■ Culture and consumer behavior

 Preferred online Search Target did not launch their e-commerce website in
Canada

 Trend to buy locally To support local economy

■ Marketing strategy

 Failed to market on internet Target prefer marketing through billboards, TV and

print ads

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 Suggestions

■ Supply Chain Management issues

 Logistic management Consolidate regulations under one roof

 Physical count at month end

 Canadian logistic consultant

 Distribution center and stores allocation

 Stronger IT platform Support e-commerce and storefronts

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 Suggestions

■ Marketing Strategy

 Price adjustment Daily goods vs. luxury goods

 Differentiate Exclusive brands

 E-commerce Order online and pick up in store / delivery

 Sponsor local communities

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 Conclusion

■ Strong initiative but poor planning

■ Learned from their mistakes: Canadian Laws, inventory

management, marketing strategy

■ Changes made:
 Physical count

 Unified barcode

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 Conclusion

■ Suggested changes:
 Expand price matching

 Broader choices of merchandises

 E-commerce
■ Re-entering Canadian market:
 Uphill battle Company’s image and reputation

 Learn from its own failure and competitors Walmart in Germany

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Thank you

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