Essay On Target's Failure In Canada

The title of the article I chose is “Why Target failed in Canada”. The article details the issues the retail chain sustained as it tried to place its first global presence in Canada. Much of what occurred stemmed from a CEO and management team that was unable to foresee the issues that would develop from entering the Canadian marketplace. It was havoc from the very beginning. The first questionable issue was that the retailer decided to open 124 stores in Canada in a matter of one year. This overblown idea of having so many stores open up in a short amount of time would eventually lead to the additional issues that caused the retailer to have its first global downfall. The retailer purchased the leases of a discount chain in Canada that had

an unorthodox layout that Target tried to conform to. Unfortunately, Target didn’t get the demographics of the middle class that the retailer was used to obtaining in the United States. Other issues the retailer faced were an already saturated Walmart presence and a lack of stocked shelves due to its overambitious amount of store fronts and poor inventory planning.
Any company looking to expand must take in consideration the positive and negative impact that the business will encounter.

In order for Target to have been successful, first and foremost, the retailer should have known that they would not be able to beat their competitor, Walmart, in a price war. That alone, is a losing battle. So, a higher quality of products, fewer locations, and a better understanding of Canadian tastes could have propelled the retailer into establishing, for the long term, a profitable global presence with our Canadian neighbors.

The Canadians and Target both lost out on opportunities that could have excelled them both in distinct ways. For the Canadians, Targets poor attempt at going global costs Canadians their jobs when the retailer had to close its stores. The retailer also is looked upon negatively for having expectations of going global that were well beyond their reach and executed poorly.

Fortunate for Walmart, the competition of another retailer was nothing for Walmart which had a Canadian presence for over twenty years prior to Target’s abrupt entry. Walmart continues to maintain a steady and moderate sales growth in

Canada.
Here are a few of the many ethical challenges facing a global business that are not present in a domestic business. The first challenge would be the barriers that would occur in communication among the various languages. Second, making sure wages in other countries are acceptable and reasonable by assuring that a living wage is warranted. Next, laws in other countries are different from our domestic laws and knowing the difference is important. Many countries still associate with bribery, which is something no business or corporation wants to be caught up in. Lastly, being aware of the working conditions where that business operates is up to standards. The number one priority of any business operating in foreign land is to assure that the treatment of workers is fair, especially with cases of child labor being discovered in many countries.
Regarding ethics, I don’t believe an organization can operate ethically overall while having different standards of ethics around the world. In my opinion, I believe the scandals that surfaced are too much for many of the companies to handle and it puts a scar on their reputation.
In conclusion, I feel globalization can benefit a company significantly.

Especially those that do e-business. Many small businesses start out and struggle to survive the first year with saturated markets or being shut down due to shopping malls or Walmarts popping up everywhere. If a company can establish themselves online and provide a product that can influence those outside of our borders, then many can sustain themselves for the long-term. In Target’s case, I had no idea they were not more globally situated in other countries. I think those responsible for the expansion into Canada were too quick to penetrate a market that was not readily accepting of Target’s overall performance. Unfortunately, many of the errors the retailer encountered could have been avoided. If another attempt is made at going global, Canadian Target should be a valuable lesson of what should be

avoided.
http://fortune.com/2015/01/15/target-canada-fail/