Target Misses the Bullseye in Canada

Joe Cataldo writes a detail story that serves as a solid autopsy on how Target failed in the Canadian market. His story moves beyond the superficial analysis of another American company failing to understand a foreign market. Through interviews with several people associated with Target's Canadian operation, Cataldo paints a pictures of a company that did not properly allocate its resources. The money list:

  • Human - Target hired people with little retail operations experience to develop its inventory and distribution systems.
  • Informational - Target could not provide properly and accurately complete the fields in its inventory software system. Indeed, Target bought an off-the-shelf title that it had no experience with using.
  • Organizational - Target had never expanded into a new country and lacked the competence to manage issues such as different currency, distribution centers, and suppliers.
  • Physical - Target acquired locations from Zellers, a poor performing Canadian retailer, that proved to be inadequate. Customers were not willing to drive to them regardless of the brand on the front of store.
  • Relational - Target and its suppliers could not agree to a receiving date for ordered goods. As a consequence, warehouses were stuffed with inventory while shelves at retail were empty.

Given the misallocation of its resource, Target ultimately achieved inferior financial performance. It reported a $5.4 billion quarterly loss. However, in reading Cataldo's story, the loss seems bigger than what has been reported.

Possible Target employees try to enter data in its inventory system.