Read through this case study and summarize alternate solutions as well as proposed strategy and conclusion into the power point template provided. So basically just slides 9-15.
Target attempted to expand their brand into the Canadian market but missed many signs of setbacks. If these setbacks had been identified and addressed, Target could still be thriving in Canada today. Target strategy caused them to succumb to the problem of expanding too quickly and lost sight of what their real goals were. They opened more stores then they could procure merchandise for which lead to customer dissatisfaction. Customers entering stores without anything to buy is a real indicator of how poorly the Canadian Target stores were being managed. Through strategic analysis, we identified all aspects of the organization and the forces that influenced the business. We evaluated SWOT, CREST, Porter’s 5 forces model, and a stakeholder analysis to help gauge the environment and conclude what Target should do in its current situation. Our team proposes three alternative actions Target could take, the first being an extended trial period where Target should delay opening over 100 stores and prolong their soft launch of 17 stores. The second alternative is to create a stronger forecasting plan for Canada and come up with a contingency plan in case suppliers cannot meet the customer demand of products. The final alternative is developing a cost leadership strategy and diversify the product line to help compete with Walmart and give the company better profit margin. The strongest action Target should take is the first alternative, the prolonged pilot test run, since this alternative has a low chance for error and will require a lot less investment then the other alternatives. Opening only 17 stores for a longer soft launch until Target can identify the issues in the supply chain will likely increase Target’s success opportunity for the Canadian expansion.
Target Corporation, a successful retail merchandiser operating in the United States, has built a business model of selling quality products at low prices. In their strategy to expand into a new geographical market, Target decided to expand into Canada in 2011 by buying Zellers from HBC and utilizing the existing Zellers retail spaces in Canada to open Target stores. Canada’s strong economy and consumer spending was identified as an advantageous expansion strategy; Target forecasted a great opportunity for increased revenue in the new market. Target chose an aggressive expansion strategy by opening 124 stores across the country in a span of 2-3 years.
As early as the soft store openings, there have been many controversies that have challenged Target’s expansion strategy. Some complaints include stock replenishment issues and higher price tags. Target’s lack of expertise and poor growth strategy in a new geographic market ultimately caused their expansion failure.
In this report, our team will identify the expansion problem facing Target and analyze the causes of the expansion problem using SWOT, CREST, Porter’s 5 Forces analysis and stakeholder analysis. We will then propose three alternatives on how to effectively expand the business into a new geographic market. Finally, we will propose the best strategy to successfully expand Target in Canada using an improved strategical expansion plan.
