Case Problem
Following its expansion and entry into the Canadian market in 2013, Target made several mistakes that led to the closure of all stores in a period of two years. During the same period, a data breach on the company’s IT infrastructure compromised 110 million debit and credit card accounts, an occurrence that resulted in losses amounting to around 60 million US dollars (Herdimon et al., 2015). Target’s operations in Canada were characterized by several mistakes, such as opening stores quickly, identifying the wrong locations, and ignoring people’s cultural aspects and preferences. Additionally, the company failed to differentiate and customize its operations from the failed Zellers brand. The presence of a poor supply chain and the inability to integrate a proper computer-based ordering system worsened Target’s Canadian operations.
Alternatives
Target’s failure in the Canadian market reveals that the leaders ignored some of the best business practices that could have led to positive results. The company had to shut down its operations within a period of two years, a decision that led to losses amounting to 941 million US dollars (Herdimon et al., 2015). To avoid such an outcome, the leaders at Target could have considered several alternatives and pursued them in a professional manner. The involvement of all key stakeholders could have been necessary to support the realization of the much-needed goals.
Slow and Coordinated Canadian Expansion
The first alternative that Target should have considered is the idea of expanding slowly into the Canadian market. This strategy would have guided the company to identify key areas in the country where additional sales could have been made. The approach would be guided by practical strategies capable of addressing the recorded data breach while increasing the confidence levels of the targeted Canadians at the same time. Continuous decision-making would have been implemented to match customers’ demands with the delivered products and prices (Herdimon et al., 2015). The expansion model could have allowed most of the leaders to identify existing gaps, address recorded weaknesses, and introduce additional efforts to support the expansion process.
This alternative is plausible and capable of delivering several advantages to the company and its stakeholders. Specifically, it would help Target expand operations slowly while integrating the needs of the customers. The model could become a new opportunity for avoiding the negative image associated with the Zellers brand. The initiative has the potential to allow more stakeholders to be involved in the process and offer additional insights to support the process (Herdimon et al., 2015). However, this approach could have attracted additional disadvantages, such as loss of some of the Zellers’ closed stores to other competitors, reduced profits, and negative perception due to the recorded data breach.
Supply Chain Management
The problems associated with the introduced supply chain mechanisms contributed significantly to Target’s failure in the Canadian market. A coordinated approach to this practice could have made it possible for the company to avoid some of the recorded challenges. While expanding slowly, competent supply chain managers could have integrated the best computer systems for ordering and supporting the delivery of products depending on the expectations of the customers. The coordinated nature of supply chain procedures would have ensured that most of the outlets were equipped with popular products among Canadians (Herdimon et al., 2015). The involved leaders could have gone further to adjust the implemented computer system and ensure that it was capable of adjusting prices and taxes in accordance with the recorded Canadian practices.
This alternative could have presented several advantages, thereby maximizing the company’s sales and profits within the shortest time possible. First, the strategy would have ensured that most of the products were acquired and delivered into the right stores, depending on the needs of the customers. Second, the effort would have made it possible for buyers to access the much-needed items in a timely manner. Third, a coordinated supply chain would have reduced most of the gaps associated with the acquisition of raw materials and delivery of finished products within the specified period. Finally, Target could introduce a new computer software system to ensure that the offered prices were reflective of the tax policies promoted in the new country (Yitzhaky & Bahli, 2021). However, this strategy could be disadvantageous because it could force the company to incur additional expenses in the acquisition of the proposed computer system. The effort would have ensured that Target took much longer before launching and streamlining most of its supply chain operations
Culturally-Competent Leadership
The Canadian expansion experience indicates that specific gaps existed that led to Target’s failure within a period of two years. As the company identified additional areas and stores in the country, the leaders ignored the fact that Canada had different regions characterized by diverse cultural groups. People living in various regions would be in need of various items and different prices depending on their expectations. Target ignored the fact that Canada was a country whose cultural attributes were not really similar to the ones promoted in the United States (Kasanagottu & Bhattacharya, 2018). Consequently, the idea that its American model could work perfectly in this new country was wrong. The best alternative would be to hire more professional leaders whose actions could resonate with the demands of the customers and select workers from the local Canadian population.
This approach would present several advantages to the company and increase the chances of recording increased profits. For example, the proposed leadership style would ensure that different regions were characterized by customized store operations and products. The managers would be keen to identify the needs of the people and address them accordingly. The emerging business model for the Canadian market would be informed by the regional cultural differences (Herdimon et al., 2015). However, the approach could be problematic due to the fact that Canada presents diverse populations, with each region having several groups. The selected leaders could be unable to match or appreciate the needs of natives, French Canadians, and English-speaking Canadians.
Solution
The best solution for Target would be a combination of several strategies to ensure that the process was seamless and capable of supporting the expansion plan. The involved project managers should have began by studying the cultural aspects of the country and the key locations that could have supported the new plan. The professionals would have identified areas with an increasing number of potential customers with disposable income (Chatterjee, 2018). This approach would mean that the company would not be primarily looking at Zellers’ previous locations. This effort would have made it possible for Target to expand slowly while at the same time taking into consideration the diverse cultural attributes of the people (Chatterjee, 2018). The concepts of monitoring and analyses could have increased the chances of success for the company in this new market.
While pursuing the above solution, Target would introduce a superior supply chain approach characterized by a better computer system capable of tracking products and ensuring that they had competitive prices. The software should be able to match each region with the overall preferences and expectations of the targeted customers. The proposed strategy would help the planners to differentiate Target’s brand in such a way that it would become more acceptable and capable of meeting the demands of more people. The concept of continuous improvement while learning more about the customers’ needs could have delivered a superior model (Li et al., 2021). The involvement of all key stakeholders could have made it possible for Target to pursue the proposed solution efficiently.
Contingency Plan
Target would need a backup plan while pursuing the identified solution for the Canadian market. Specifically, it could have consider the importance of launching its operations in China and adopting a culturally competent model to support the delivery of timely results. This option would be considered after opening a specified number of stores in Canada and monitoring the recorded outcomes within the first year. Should the outlets record dismal sales within the period, Target would terminate overall operations in the country before additional losses are recorded (Beke, 2018). The contingency plan would have detailed procedures for setting operations in China, identifying strategic locations to have new stores, and employing local citizens to be part of the marketing strategy.
Summary
The above discussion has identified some of the reasons why Target performed dismally after launching its operations hurriedly in Canada. The completed analysis reveals that the leaders ignored the power of the 4P marketing mix as a powerful business theory. Specifically, it chose the wrong locations and pricing for most of its products. The concept of promotion failed due to the nature of the introduced supply chain process. As the company considers the most appropriate alternative or solution, the use of tier theory could be critical to ensure that its reentry in Canada is successful. The same model could be applicable in the Chinese market should it be considered for the proposed contingency plan.
References
Beke, G. O. (2018). Demystifying McCarthy’s 4 P’s of the marketing mix: To be or not to be. European Journal of Business and Management Research, 3(4), 1-3. Web.
Chatterjee, J. (2018). Role of services marketing mix and customer-company identification in building engaged customers. Amity Journal of Management Research, 3(1), 112-122. Web.
Herdimon, C., Jeffers, M., Leonardi, S., Schwab, C., & Sines, M. (2015). Case 4: Target Corporation: A Canadian disaster. Fox School of Business.
Kasanagottu, S., & Bhattacharya, S. (2018). A review of Metro, Target, & Woolworths global business strategy. International Journal of Mechanical Engineering and Technology, 9(7), 293–302. Web.
Li, S., Rouibah, K., Records, H., & Behling, R. (2021). Cultural difference and consumer satisfaction when interacting with technology mediated customer services. Issues in Information Systems, 22(3), 26-38. Web.
Yitzhaky, L., & Bahli, B. (2021). Target setting and firm performance: A review. Journal of Applied Business Research, 37(3), 81–94. Web.