Company Analysis - Target Corp - Research Paper Example

Without additional funding, inventory planning became a big issue and the shelves remained empty. The stores lacked commodities for Canadians to purchase.
Target also had to contend with intense competition which further complicated its operations. Canadians familiar with Target from their visits to the US were initially excited about the idea of the discount retailer opening up shops in Canada. However, other discount retailers such as Walmart had already carved a niche for themselves in the market. Oversized entry into the market meant that Target was not able to adequately stock its stores with commodities that could enable them to adequately compete in the market (Dahlhoff, 2015). In comparing Target’s entry mode to that of J. Crew, the latter started with one store and then gradually grew by differentiating its products. Target underestimated its competition and started with 120 stores which could not sufficiently competitive in the retail market.

Target also went down due to the high prices for its commodities. Popularity for Target hinges on high-quality but affordable merchandise. Competing with Walmart, Target did not offer sharp enough pricing thus it created a perception of commodities being more expensive than necessary (Wahba, 2015). The broad public perception is that Target is more expensive in Canada than Walmart (Austen, 2014). Shoppers who were familiar with the pricing of commodities at the Target U.S. stores complained that commodities at its stores in Canada were not as competitively priced.

The shopping habits of the Canadians also played a contributing role to the failure of Target. Most Canadian shoppers were familiar with Target from vacation visits to the U.S. Therefore, when Target opened up its stores in Canada, the intended market had its expectations of the retailer. However, a damaged reputation meant that there were fewer customers than initially targeted. Target Canada president Anthony S. Fisher, in conversations with journalists and analysts late last year, said that it would take time to decipher the product mix that best suited the Canadian market (Austen, 2014). Canadians are also not accustomed to the one-stop-shopping promoted by Target. Therefore, the establishment fell short of its sales targets. Canadian shoppers are used to picking and choosing between retailer strengths making complete shopping almost impossible.

The lack of online presence has placed Target in a disadvantaged position, especially since its competitors have expanded their online presence. Canadian retailers have been generally slow in the adoption of e-commerce. Rivals Amazon and Walmart have intense online offerings giving shoppers the benefit of convenience. The lack of flexibility also meant that the retail chain missed out on possible revenue from online shoppers. Consumers who shopped from the comfort of their homes could not access the stores. In an era where e-commerce is the most preferred mode of business, a lack of online presence translates to a lack of competitive edge. Aggressive marketing on the Web in the U.S. has paid off for Target since it reported a 3% sales rise over the holidays (Shaw &Pennerr, 2013). If the same strategy were employed in the Canada stores, it is expected that sales would considerably increase; and so would the profits. Read More