The main problem with Target Canada was time. Target always had ideas to branch into
Canada, and the perfect opportunity arose when Zellers (a Canadian discount store chain) was
putting its stores up for grabs. Target had to act fast before Walmart took them and ended up
paying 1.8 Billion United States Dollars for 124 stores in 2011. They planned to open these
stores by 2013, which is much too little time for an operation of this size, especially when adding
3 distribution centers from scratch. Target was rushed, and even though operations were great
in the US, they decided to use SAP, a German technology that was not meant to be set up in 2
years. Another issue was the way that Target hired people. They hired based on one's attitude
and mentality instead of experience, which worked in the US because they had a few months of
training, unlike those in Target Canada, which merely had a few weeks. Hiring inexperienced
people to do tons of data entry for about 75,000 different products led to about 30% correct
data. Another factor was the fact that Target's supply chain was all messed up, from overseas
distributors not being able to make their large packages, distribution centers not being able to
ship products to stores, and even stores not being able to fit packages on the shelves.
Canadians complained about how empty the stores were, which was due to the issues in
Target’s supply chain.
Globalization is a key driver that Target wanted to expand on, specifically globalization of
markets. Target already used globalization of production, with producers across the Atlantic.
Target wanted to expand into a new yet similar market in Canada. There was lots of industry
competition with many Canadian retail stores existing. The expansion to Canada was also a
growth strategy for both Target’s brand and profits since they expected to be making profits
within 1 year. The main reason they failed was a lack of time and global issues. They had
communication and shipping issues with their global producers, where they obtained shipments
from. They also had language barrier issues since Canadians speak English and French, which
was a large issue when implementing SAP technology. Target ended up becoming more global
by outsourcing the job of fixing the SAP data to India, who could be working when those at
Target were asleep.
If I were Tony Fisher, I would have tried to make a better real estate deal to minimize the
costs without running stores. I would have pleaded for a 50% discount in rent for the first few
years and then a substantial increase once Target began to make profits. Although Target was
expecting that profits would be reached within the first year, Fisher should not have been so
confident about entering a new market in such a rush. I would have also stuck with American
technology, which Target knew had a 98%-99% success rate and worked for years before,
instead of switching to a new, foreign technology (SAP), which had to be instilled in 2 years, a
project Accenture believed was a 3-5 year project. Fisher should also have relaxed when
continuing to open new stores when the running ones were already a large disaster. He was too
afraid of getting caught and standing up to the media, and he just kept going with his original
plan. I would have cut the losses and made sure everything was organized in the warehouses
and got the few stores that were open up and running with the efficiency and effectiveness in
the United States, and then proceeded to expand into the rest of the stores.
