ACCT 4251: Case Study on the Management Failure of Target Company

This case study examines the management failures of Target Company, particularly its expansion into Canada. The analysis highlights key issues such as operational failures, resource distribution problems, and strategic missteps. The study delves into the company's decision-making processes, including the acquisition of Zellers and its impact on the business. It explores the challenges related to understanding Canadian consumer preferences, inventory management, pricing strategies, and human resource management. The case study identifies the lack of skilled managers, inadequate marketing approaches, and data security breaches as contributing factors to the company's downfall. It also presents potential strategies and solutions that Target could have implemented to mitigate its losses and achieve success in the Canadian market, including improvements in product design, marketing techniques, and employee skill development. The study concludes by emphasizing the importance of effective management, market analysis, and strategic planning for successful business expansion.

Running head: CASE STUDY OF MANAGEMENT FAILURE OF TARGET
CASE STUDY OF MANAGEMENT FAILURE OF TARGET
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CASE STUDY OF MANAGEMENT FAILURE OF TARGET
Table of Contents
Introduction................................................................................................................................2
Description of the situation........................................................................................................3
Background for the case study...................................................................................................4
Providing a follow up.................................................................................................................7
Conclusion..................................................................................................................................8
Reference list............................................................................................................................10

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CASE STUDY OF MANAGEMENT FAILURE OF TARGET
Introduction
Mismatch in the management is one of many factors that leads to the collapse of any
company. Mismatch of management occurs mainly due to lack of potential knowledge of the
managers regarding overall market scenario and operation opportunity that are lying with the
company. Target Company in Canada in recent years faced the tough situation of
management failure. The Target Company when established was one of the notable
companies in the retail industry. However, the faulty management of the company in the form
of operations failure and resource distribution led to the debacle of the company. This case
study will look deeply into the reasons that has led to the failure of the Target Company in
the retail industry. The Target Company was initially located in Minnesota but the decision to
expand in Canada was one of the biggest reason behind the failure of the company.

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Description of the situation
This section of the case study will aim to highlight the problem the Target Company
faced while making decisions to expand their business. Not only highlighting the problems
will be main aim of this case study but the case study will also highlight the solutions to these
problems that could have been taken by the Target Company. It has been seen that the Target
Company failed to identify the opportunities that are lying within the states. The company
failed to identify the tastes and preference of peoples living in Canada regarding the
consumption of retail products. Now they thought that the consumer preference in both USA
and Canada is more or less same in nature. Another factor that was highly highlighted behind
the failure is the emptiness of the shelves in the store.
According to many customers, the company failed to bring in well-judged inventories
as either the store had numbers of those products that are mainly not demanded by the
customers. Even the store was not having huge number of necessary items. The main
characteristics of Canadian customers are that they prefer to visit shop a number of times but
they are not at all accustomed with one stop shopping concepts. The major fault that had
happened with the Target Company is faulty strategy. In most of the shops that has been
opened in Canada were having 15% higher price compared to other companies operating in
Canada. The decision of taking over Zellers that the management of Target Company took
was not sufficient to minimise the losses that were being faced by the company. Instead of
many business forecasters stated that the decision of joint operation with Zellers would have
been a better options.
The Target Company lost around $1 billion as sales fell short than expected
(reuters.com, 2019). Even, the lack of important goods in the selves of the company made the
customers to choose different retail companies like Walmart. Now through this study, it will

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be helpful for the readers to identify the factors that has been acting as main hindrance. Most
of the managers were not so skilled for the purpose of expansion outside Canada and USA.
When the Target Company took over Zellers, then only 1% of the employees of Zellers were
being retained in the business and most of the staffs were newly appointed. Even the
company send their employees to US for training purposes and when they came back they
brought the cultures of the US with them. This had a huge impact on the production of the
company as Target was manufacturing products based on USA preference and they were not
being able to sell off in Canada.
Now in order to expand successfully the company need to identify gaps that are being
present within their human resources that the Target Company failed to identify. The lack of
education level and management skills within the employees were enough to bring the
debacle within the performances of company. The process of building customer confidence
that was taken by the company was poor and was not having any firm policies behind the
decision. Lack of proper level of security within the company had affected more than about
700,000 customers. This had forced the customers to loose trust on the company. The
company opened the market and have forced other retail companies to enter the market and
they brought newly affordable products.

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Background for the case study
From the given case study, it has been seen that Target Company wanted to expand
their business in Canada and while doing this Target took over Zellers. However, it has been
seen that lack of management skills of the managers working in Target has led to the creation
of big problems. Now they have only retained 1% of the employees of Zellers
(corporate.target.com, 2019). Lack of sufficient amount of recruitment of previous employees
of Zellers Company within the Target created hard issues. It is important for any case study
to highlight the issues that are being popped up within the existing scenario. Now from the
Target Company case study it is clear that operation costs of the company was increasing
than they have anticipated. In Canada, the minimum wage for the employees was around
$10/hour and in US, the minimum wage is $7/hour. This led to the increase in the cost of
production for the company. The company took the FDI acquisition that actually didn’t
worked as per their anticipation.
Even the system of data security is posing big threat to the customers of Target group.
About 40 million payment card numbers were breached due to lack of efficient level of
financial managers (Reuters.com, 2019). It is highly important for any case study to identify
the question that will be really helpful in identifying the answers.
Question 1: What are possible ways to minimise the gaps in production?
In order to increase the development of the production, the Target Company needed to
identify the development of resource distribution process. Now in order to increase the
consumer reliability, the company required to increase the innovation in their product designs
that would have been increased the customer opportunity. Another possible ways to minimise
the gaps in the production the company should have taken the option of franchising business
or joint venture. This would have been increased the resource distribution channels for the

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company. Now in order to increase the production ability, it is important for the company to
increase the level of foreign direct investments but they made the FDI into wrong channels
and wrong direction. They even did not provide data security that has led to the development
of data leakage of the customers.
Question 2: what are the possible strategies that the company should have taken?
In order to increase the development of production, the Target Company would have
required to keep the employees within Canada to increase their skills and potentiality. On the
other hand, they did not identified the potential areas that were required investments.
Through the increased level of FDI, in the production design and most of the customers
claimed that the website of the Company was not even working. The company needed to
improve the website in order to access huge number of customers. Now most of the managers
did not even bothered to monitor the loopholes within the investments. Second strategy that
the company should have aimed in taking is that they should not have taken the decision to
bring franchise.
Question 3: What would have been possible ways to market the products?
In order to market the products it was required to bring both online and offline
platforms that would have been highly brought in high level of customers. Through the
increased level of online business, it would have increased the level of production level of the
company. Now they should have taken the initiative to bring in high class of marketing tools.
The Target Company needs to bring in high class of marketing technologies so that the can
compete with companies like Walmart and other companies.

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2012 2013 2014 2015 2016
73301
71279
72618
73785
69495
Sales ($ million)
Figure 1: Sales of the Target Company
(Source: corporate.target.com, 2019)
The above diagram is showing the fact that in 2015, the sales of the company was the
highest and the amount is $73,785 million. This was best followed by 2012. On the other
hand, through the increased and better level of management would have increased the number
of sales for the Target Company in Canada.

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CASE STUDY OF MANAGEMENT FAILURE OF TARGET
Providing a follow up
From the above situation the faulty management is one of the main factor that has
been identified as one of factor behind the fall of the Target Company. Now in order to
minimise the gaps within the management of the company, it was required to increase the
skills and potentiality of the employees. Now the skills and potentiality can be identified
using modern tools and skill up gradation process. The company opened more than 133 stores
in quick time and in order to minimize the loss amount, the company aimed in closing down
all their shops in quick time. However, if the company would have chosen franchise business
or joint venture business then it would have given better results. In spite of doing that the
company took over Zellers and recruited new employees. In doing this, the company lost a
significant amount of time and revenue.
Before making any decision the potential capability of both human and capital
resources need to be identified. However, the Target Company failed to evaluate the potential
capabilities of both human and capital resources. Setting the price high compared to other
products in Canada was another big challenge. Most of the people living in Canada preferred
to go to shops number of times. Now in the generation of modern types of shopping lack of
product unavailability in the shelves created a big problem for the company. People were
liking this fact. They tended to move in to another retailers in the form of Walmart. The
second decision that jolted the production of the company was the lack of proper planning
while expanding their shops. Now in order to expand the retail market, company need to
work according to the customer’s preference choice.
The key elements that has been taken while making proper level of evaluation for gap
minimisation is the lack of communication among all the employees. The higher employees
were not having enough level of communication among themselves. The company was not

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able to make communications even with the customers and they did not had the opportunity
to increase customer satisfaction. Most of the companies doing business in the retail
environment of USA and Canada was maintaining a firm balance and they segregated
products based on income, demographics and choices of the customers (Aizpurua et al.
2019). They kept on innovating products and marketing techniques of products. However,
labour unions is another factor that led to this situation. In Canada more the 30% of the
employees are in labour unions and in USA, it is only 7%. This is the main reason why
ignoring the employees of Zellers were not a good sign for the Target Company. The huge
disparity that took place within the employees and labour unions mainly highlighted the fact
that managers of Target Company was not being able to manage the problems.
The company even did not took any initiative to change the product design or
marketing of the products based on the customer choices. This was the most required step for
the expansion of the business. Target would have achieved a better position in the retail
market if they had brought in high class of retail products and made them available in lower
price. Now the company should have identified their potential customer base before making
any kind of investment within Canada. They could have read the market data well and would
have taken into account the buying behaviour of the customers. In order to understand the
choice and preference of the customers it is important for the company to participate actively
in the direct survey.
Conclusion
The study has come to the conclusion that faulty management that has mainly led to
the debacle of the company. It has been highlighted that Target Company was not being able
to identify the potential impacts of both human and capital resources. It is highly important
for the study to identify the factors that are mainly helping Target to achieve their objectives.
It has been seen that the management of the company took the decision to close all their

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shops so that the loss can be minimised. Now in order to bring in high class of customer base,
the company should have identified the base of customer needs. Even the company made a
huge mistake by not retaining 99% of the employees of Zellers. Now in order to bring high
class of performances within the market, the company needed to do business in franchise and
joint venture.

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Reference list
Aizpurua, J. I., Stewart, B. G., McArthur, S. D., Jajware, N., Kearns, M., & Banerjee, S.
(2019). Towards a data analytics framework for medium voltage power cable lifetime
mangement.
corporate.target.com. (2019). Retrieved from
https://corporate.target.com/_media/TargetCorp/annualreports/2016/pdfs/Target-
2016-Annual-Report.pdf
Kenicer, D., & Krishnadas, R. (2015). Recognition and mangement of serotonin
syndrome. Prescriber, 26(18), 31-34.
Rao, B. N., Suresh, K., Behera, S. K., Ramachandrudu, K., & Manorama, K. (2016).
Irrigation Mangement in Oil Palm.
www.reuters.com. (2019). Target says supply chain 'reset' will help fix Canada woes.
Retrieved from https://www.reuters.com/article/us-target-canada/target-says-supply-
chain-reset-will-help-fix-canada-woes-idUSKBN0GC1SW20140812
www.target.com. (2019). Target : Expect More. Pay Less. Retrieved from
https://www.target.com/