Failure of Target U.S. Company in Canada

Running Head: OPERATION MANAGEMENT
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Topic: Failure of Target U.S. Company in Canada
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OPERATION MANAGEMENT
Table of Contents
INTRODUCTION...........................................................................................................................2
Analysis of problem.........................................................................................................................5
Recommendations..........................................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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OPERATION MANAGEMENT
INTRODUCTION
Target Canada company was the Canadian subsidiary of the Target Corporation which is the
eighth-largest retailer in the United States, with its headquarters in Mississauga, Ontario the
subsidiary was formed with the acquisition of Zellers locations from Hudson’s Bay Company in
January 2011. The target company being the parent company, opened up branches in Canada to
facilitate its business in March 2013. The branch, however, was in an excellent position to
continue in operation until when it had issues in managing inventory. The systems which were to
aid in the managing of inventory inflow and outflow into the business, and at times could omit
crucial information relating to inventory management, was not well integrated with the company
procedures to facilitate smooth operations.

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OPERATION MANAGEMENT
Problems facing the Target Canada Company
Higher expectations by Canadians
When the branch was opened in Canada, the Canadians expected that the new Company would
come up with new products into the market different from what other retailers were offering. The
Canadians expected the Company to charge them fair prices carefully to what other retailers
were charging. This was so disappointing because they had to keep their products with them or
in the stores until they were forced to change the product line.
Higher pricing
The Target U.S. Company used to charge customers exorbitantly high prices on the products,
which to the customers was quite unfair practices by the Company. Therefore Canadians
considered buying products from other retailers at a reasonably low and fair price (Yadollahi,
2017). Target failed when it started competing with well-organized enterprises in terms of price
of goods, where the competitors are well established and have been in the market for a
considerably long period taking into the needs and want of the customers.
The order quantity problems
The problem associated with ordering concerning economic order quantity ( EOQ) is to
determine the amount of stock to be added into the system before the inventory becomes
completely depleted (Shekarian, 2016). The problem may arise when the firm is considering
making bulk purchases includes carrying costs and storage costs, which can be inversely related