Target Corporation: Reasons for Failure in Canada and Success in India

This report discusses the strengths of Target Corporation, the reasons for its failure in Canada, and the reasons behind its success in India. The report highlights the importance of effective information technology strategies, management, and understanding consumer needs. It also emphasizes the significance of data collection and usage in understanding consumer demands.

International management
Target Corporation

Introduction
Target Corporation is one of the most successful and largest retailers in America. The stern
competitors of the company include retail giants like Walmart and Amazon. As of 2017, the
brand operates 1834 stores across the US. Target Corporation has a strong reach and reputation
across the world and has been expanding across different countries. Internationalization of a
particular brand is a complicated process and requires immense planning and strategizing (Chan
et. al., 2011). This report highlights upon the problems faced by Target Corporation while
expanding to Canada along with the reasons for the brand’s failure in the country.
Strengths of Target Corporation
Target Corporation has been a major player in the retail industry. Since its inception, the brand
has been effectively reaching out to consumers since its inception. The major strengths of the
brand as identified over a period of time are as below:
Financial stability
As a giant retailer, one of the major strengths of the firms is its financial stability. By the end of
2017, the organization had a market cap of $33.74 billion. This is why the brand is considered
too big to fail. Financially stability allows organizations to experiment and take risks. The
financial strength of Target Corporation makes it possible for the firm to create better
promotional strategies, offer discounts, expand to different geographies and introduce new
products. The fact that Target Corporation is financially sound is a major strength of the
organization.
Strong brand name
Another advantage that strongly backs Target Corporation is the solid brand name of the
organization that has helped the firm in establishing a positive goodwill among customers.
Target Corporation is better known for the quality of products delivered by the brand. The firm is
even positioned as a fun place to shop. The brand is considered to be trendy, fashionable and fun.
This strong brand name instils trust among consumers and enables the firm to establish a loyal
consumer base (Kuikka & Laukkanen, 2012).

Wide reach
Another strength of Target Corporation is the wide reach of the brand. In the US alone, Target
operates via over 1800 stores. The large number of stores makes it convenient for customers to
find a Target outlet in their respective location making it easier for customer to prefer Target
over other retailers. Place is in face an important aspect of the marketing mix of a particular
brand. Target stores are placed at ideal locations which are easily accessible by customers.
Reasons for failure in Canada
Target Corporation’s journey in Canada was rather short lived. There are various reasons that led
to the failure of Target in Canada.
Information technology
The foremost reason that disrupted the brand’s operations in Canada was ineffective
management of the information technology. The organization completely failed to expand their
IT and their existing data system to suit the demands of the country. A lot of data for every
product needed to be stored and the company’s substandard IT system did not allow it to be done
in an effective manner (Kingser & Schmidt, 2012). Stocking levels were voluntarily turned off
by the firm’s people which created false illusions in the minds of customers regarding the
available inventory with the brand. Post the fiasco, Target also hired a new Chief Information
office (Forbes, 2016).
Lack of management
Management of human resources are critical to the success of a business. As mentioned in the
previous point, data entry methods were entirely wrong. In order to counter the same, low level
managers were pushed to impossible deadlines. The analysts who were given the responsibility
of understanding consumer needs and demands could not keep up with the dynamic market
scenario. Therefore, they failed to fulfill customer needs. The company’s CEO was also fired
during this time leading to a further dent in the goodwill of the company. The data scandal just
added insult to injury.

Over ambitious launch
The launch of the brand in Canada itself was highly over overambitious. Target had bought a
total of 124 stores from Zellers for a sum of $1.8 billion. These 124 stores were opened in
Canada within the first ten months. Buying such a large number of stores put immense pressure
on the brand to expand their Canadian operations. Opening the large number of stores also did
not give the brand enough time to properly understand consumer needs and deliver the same.
Reasons behind Target’s success in India
Unlike Canada, Target Corporation has been a success in India with a team of over 2800
employees (Economic Times, 2017). The company has its Indian headquarters in the IT capital
of the country, Bangalore. It was established in 2005 and presently has over 1800 stores and 39
distribution centers.
Presence across online and offline channels
Channels of distribution play a significant role in the success of a brand. These channels define
how products would reach consumers. Target has a presence across various channels catering to
customers in different cities of the country. The advent of technology has also increased traffic to
Target’s website and mobile application in India. The brand’s presence across all channels
enables it to target a wider set of consumers and enhances the overall reach of the company.
Data collection
Data acts as a significant resource for every business and this is specifically true for retail
industry. Data helps businesses understand its customers better by keeping a tab on their age,
shopping preferences, family size etc. Target has been putting tremendous efforts in gathering
this data. This also allows the brand to effectively target customers and optimize their shopping
experience.
Target Corporation has also been talking with its US counterpart in order to modernize its supply
chain with an aim to reduce operational costs. This reduced cost would lead to increased profits
for the brand/

Huge population
India is a developing economy with the second highest population in the world. There are 1.32
billion people in the country (Worldometer, 2018). A large population allows the brand to target
a higher number of customers. The large population, reducing inflation and improving lifestyles
of the country create demand for quality products offered by Target Corporation. The Indian
economy currently offers a perfect opportunity for retailers to enter and grow.
Conclusion
Internationalization of any business requires immense efforts and strategies. This report
highlights upon the Target Corporation’s failed expansion into Canada. The journey of the brand
in Canada was short lived. This report helps in understanding the brand’s strengths, the reasons
behind the brand’s failure in Canada and success in India.
The major strengths of Target Corporation include its strong brand name, wide reach and
financial stability. Unfortunately, Target Corporation failed to sustain the Canadian market
owing to ineffective information technology strategies adopted by the brand. The plan to expand
to Canada was highly ill managed and over ambitious to begin with. The brand did not clearly
anticipate consumer needs and hence failed to fulfil them.
On the other hand, Target Corporation has been doing significantly well in India. Partly because
of the country’s high population and improving economy. At the same time, Target has
understood the importance of data collection and usage in order to fairly understand consumer
demands. This has not only helped the brand gain a large number of customers but has also
assisted in establishing a positive goodwill in the country.

References
Chan, P., Finnegan, C. and Sternquist, B., 2011. Country and firm level factors in international
retail expansion. European Journal of marketing, 45(6), pp.1005-1022.
Economic Times, 2017. ‘How India is powering US retailer Target with digital innovations’.
Available at https://cio.economictimes.indiatimes.com/news/strategy-and-management/how-
india-is-powering-us-retailer-target-with-digital-innovations/60252733. Accessed on 20 May,
2018.
Forbes, 2016, https://www.forbes.com/sites/walterloeb/2016/08/24/why-targets-new-battle-
ground-in-technology-will-help-growth/#636d6ea36c13, viewed on 20 May, 2018.
Kingser, T. and Schmidt, P., 2012. Business in the Bulls-Eye? Target Corp. and the Limits of
Campaign Finance Disclosure. Election Law Journal, 11(1), pp.21-35.
Kuikka, A. and Laukkanen, T., 2012. Brand loyalty and the role of hedonic value. Journal of
Product & Brand Management, 21(7), pp.529-537.
Worldometer, 2018. ‘India Population’. Available at http://www.worldometers.info/world-
population/india-population/. Accessed on 20 May, 2018.