Case Summary

Target formed target-Canada in 2011 and agreed to buy around 220 locations across the
country. They established three outlets in 2013, and by mid-2014, they had opened around
133. However, by mid-2015, they had closed all of their locations and ceased operations in
Canada, a two-year period. Target stated in January 2015 that it would close all 133 of its
locations in Canada after barely two years of existence. Target's original objective of
generating a profit within a year of starting was shattered when CEO Brian Cornell
announced that the company would not be profitable until at least 2021, and that it would
require more capital to stay afloat. Target has opted to exit the Canadian market and refocus
its efforts on the United States, where it would pursue smaller locations in metropolitan areas
and improve its e-commerce business. Target exited the Canadian market, incurring a $5.4
billion write-down and a cumulative estimated loss of $2 billion.
What Lead to the failure
 Data Quality and Data loading
The underlying cause of Target's supply chain failure in 2012 was quickly identified: the data
contained within the company's supply chain software, which governs inventory movement,
was riddled with flaws. Untold numbers of mistakes were made at the start, and the company
spent months trying to recover from them. There was a separate procedure in place to
guarantee that the correct data was entered into SAP. Mississauga personnel were unable to
upload it directly. Instead, the data was transmitted to a Target office in India, where it was
entered into SAP by employees. In India, more contractors were also required
 Empty shelves but Stock overflow
Footfall was higher than projected in the early days, which was positive, but it didn't take
long for customers to complain about bare shelves on social media. Target told the media that
it was swamped by demand and that it was working to improve product delivery accuracy.
Even as customers faced sparsely stocked stores, Target's distribution centres were bursting at
the seams with merchandise. Target Canada had placed an order for far more inventory than
it could ever sell.
 Distribution problems
Dimensions and numbers were sometimes a source of contention. An employee at
headquarters may have ordered 1,000 toothbrushes and put them incorrectly into SAP as a
case pack having 10 boxes of 100 toothbrushes each. However, the shipping could be set up
differently. As a result, that shipment would not be found in the distribution center's software,
and it would be unable to be processed.
 Malfunctioning point-of-sale system
The point-of-sale system was not working properly. The self-checkout machines gave me the
wrong change. The cash machines took an unusually long time to start up and occasionally
froze. Items wouldn't scan, or the POS would give you the wrong price. A transaction would
appear to be completed, and the consumer would leave the business, but the payment would
never be processed.
Lessons learned
Technology
Target's technology—the processes that allow the firm to purchase things from vendors,
move them through warehouses, and get them onto store shelves quickly—was one of the
most crucial decisions it made
The main thing here is to get technology which fits best and not assume that operations in one
place could be the same as operating in other places. If they had a better IT system, their
problem of empty shelves, overstocking, distribution problems etc. would be solved at ease.
Training
Target has a distinct, well-established corporate culture in the United States, which the firm
considers to be one of the reasons for its success, and the company's management wanted to
emulate it in Canada. Training can be one of the key aspects in being successful with
customer relations and to function in another country. Countries will have their own work
culture and we cannot assume it to be like any other country.
Culture
Even if a country of operations in in close proximity or falls under the same geographic
location as the home of operations, they will have a very different way of operations. It is a
mandate to Research the market before even planning to start operations in any locations. We
would have to know everything from the customer’s culture and buying behaviour to the
employee’s work culture. This is possible only through proper market research.

Target Canada declared bankruptcy, squandered billions of dollars, destroyed its brand, and
laid off nearly 17,600 workers. In most circumstances, this would have wiped out a
company's chances of survival, and Target has been fortunate to maintain its success in the
United States.