Abstract

This case discusses the factors which led to the failure of Target Corporation (Target) in Canada. Target entered Canada by acquiring a portion of Zellers Inc. (Zellers) in 2013 hoping to cash in on the demand it had in the US from Canadian cross border shoppers. It started in Canada by opening more than 100 stores by the end of 2013. However, Target was not able to establish a viable supply chain strategy in Canada due to an inefficient software system, which resulted in empty shelves at the stores. Moreover, customers found that the products at the Target stores in Canada were priced higher than those in the US stores. Target was forced to exit Canada in 2015. The decision to close its Canadian operations came despite Target’s turnaround attempts in the country. Many analysts assumed Target would be able to recover from its setbacks in Canada and go on to repeat the success it enjoyed in the US. However, Target’s CEO Brian Cornell (Cornell) could not find enough indication that the turnaround plan was working in favor of Target and this ultimately led to Target exiting Canada. Analysts wondered what kind of precautions Target would take while entering a new country in future to avoid a repeat of the fiasco in Canada.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the reasons for Target’s exit from Canada.
• Evaluate Target’s supply chain strategy in Canada.
• Understand the need for customizing a company’s supply chain operations according to the various countries in which it operates.
• Understand the importance of an efficient distribution and logistics management system in not only reducing the costs for a retailing company but also in creating value for the customers.
• Examine the role of IT and the Internet in supply chain management of global companies.

Keywords

Operations management; Supply chain management; Enterprise resource planning; Economic order quantity; Forecasting; Inventory planning; Inventory management; International business; Entry and exit strategies; International business environment; Localization