In the article, Billion-dollar mistake: How inferior IT killed Target Canada, the Target Corporation entered into an international market without modifying its IT system and it lost billions. IT is what drives Target’s entire enterprise. So, Target’s IT system needed a lot more development and customization before the corporation expanded into Canada. The theme explored in the article is knowledge versus ignorance. For example, Target’s IT system was set up to handle US dollars and customary units. But, Canada has different currency than America and Canada uses the metric system. Target’s IT system needed to be updated to handle Canadian dollars and the metric system. Internationalizing this kind of IT system is a lot of work and Target chose
Target Canada is the company’s first international expansion. However, Target’s expansion was not successful, as the company had initially planned for. Therefore, the company will be closing 133 Target Canada stores across the country and lay off approximately 17,600 employees. According to Target’s CEO Brian Cornell, he stated “After a thorough review of our Canadian performance and careful consideration of the implications of all options, we were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021.” Moreover, problems occurred immediately when Target opened up over hundred stores in the first year of its Canadian Expansion. For example, customers complained about the lack of basic goods, prices being too high, and the unavailability of U.S. brands in the stores. It was the start of Target accumulating losses as high as a billion dollars a year. In addition, there was also increasing competition with Wal-Mart being the biggest retailer in Canada. The already intimidating rival lowered its prices in order to fend off Target. Furthermore, Target Corporation’s cash costs to discontinue Canadian operations are expected to be $500 million to $600 million, most of which will occur in the Company’s 2015 fiscal year or later. The Company has sufficient resources to fund these expected costs, including cash on hand and ongoing cash generation by
Even though Target is ranked currently 36 in the fortune 500 companies and have over 1750 stores, they are still very susceptible to being a victim of a cyber attack. In 2013, Target fell victim to a security breach on their system. Roughly around Thanksgiving of 2013, someone had installed malware in Target’s security and payment system enabling the hackers to steal credit card and personal information. “Six months earlier the company began installing a $1.6 million malware detection tool made by the computer security firm FireEye, whose customers also include the CIA and the Pentagon.” (BloombergBusiness) In place was a very effective security system. However, when the attacked happen on November 30, FireEye spotted the hackers and Bangalore (a third party cyber security company hired by Target) that alerted the IT team at corporate office in Minneapolis. There was no response from Target’s Corporate IT team and therefore led to 40 million credit card numbers and 70 million addresses, phone numbers and other personal
Target Canada gets to be favoured shopping goal from retail chain roots. First and foremost Target store was secured in 1962. Target Store is focused on its legacy of dependable corporate citizenship, moral business hones, natural stewardship and liberal group help.
Target Corporation (NYSE:TGT) is the leading large-format general merchandise and discount retailer in the U.S., challenging Wal-Mart in electronics, toys and apparel while also seeking to differentiate with higher-end fashions and products for an upscale audience. As of the close of their latest fiscal year (FY2011), Target operated approximately 1,760 stores encompassing 233,000 square feet in 49 states and the District of Columbia. The company is divided into the retail and credit card divisions and moves the majority of its products through a highly integrated network of 37 different distribution centers, which include four food distribution centers. Target is one of the most well-entrenched large format retailers in the U.S., has the ability to manage their pricing strategies at a level of accuracy and precision that is comparable to Wal-Mart (Henderson, 2001). Unlike Wal-Mart, Target concentrates on a value-based message that concentrates on quality and price differentiation to sustain their gross margins while Wal-Mart concentrates on supply chain efficiency and a continual reduction of supplier and transaction costs (Krishnamurthi, 2001).
Target has been a successful retail company coming in 2nd place behind Wal-Mart. Although these success comes in many forms there are factors that deter Target from ever reaching first. Target Corporation has run into a few weaknesses in the recent years. These weaknesses that Target are facing can impact their future goals. These weaknesses include lawsuits that Target is facing with the recent events and not having an international presence.
The aim of this paper is to highlight the strategic position of the company with an overview of its internal and external environment. The study of its strategy, design and other forces, one can easily gauge why and how target has managed to become the retail giant it is today.
More often than not, Target’s products fall under the consumer discretionary category. Thus, the company is vulnerable to macroeconomic forces— consumer spending trends, employment and income, and GDP (gross domestic product) growth rate. After a failed attempt to expand into Canada, Target’s operations are limited to the United States market. This makes the company’s financial performance more vulnerable to our fluctuating economy. It is primarily these macro forces, in the recession and thereafter, that forced Target to shift towards an affordability focus in all of its product lines. However, these macro forces, in the betterment of the state of the economy, also provide Target with the opportunity to refresh its product offerings according to the tastes and preferences of its consumers, while continuing to offer a relatively low price point, regardless of the product area. In this way, Target is shifting from employing a production concept, in which its main focus is to sell products at a low production
In today’s world, especially in Canada, consumers generally want to satisfy all of their needs in a way that saves them the most time and energy. In order to meet this need, Target offers their customers the chance to buy different products that they would normally have to go to two or three different stores
The Target Corporation is a general merchandise retailer that opened up in in 1962 under the parent company of Dayton Corporation. This parent company was renamed the Target Corporation in 2000 and are based out of Minneapolis. There are over 1,800 Target stores throughout the United States which includes Targets and Super Targets. In 2005 Target began expansion in India and in 2011 to Canada however this expansion into Canada did not fare well and all Target Canada stores were closed by 2015. According to Forbes in 2005 they we ranked amongst the highest cash-giving companies in America with 2.1% given and they donate about 5% of its pre-tax operating profit. In 2010 Target was ranked number 22 by Fortune magazine’s World's Most Admired Companies.
In "The Worst Mistake In Human History?" written by Jared Diamond, there are several valid points to prove that agriculture was the wrong step in human history. One example that Diamond provided would be that agriculture created a struggle for power. In these agricultural societies, people were divided into classes, the higher class, such as royals, and the lower class, such as farmers and peasants. The people in the higher class had more advantages because of their power, which means they had better care and also better food than others. Diamond states, " Among Chilean mummies from c. A. D. 1000, the elite were distinguished not only by ornaments and gold hair clips but also by a fourfold lower rate of bone lesions caused by disease." This quote
Thus, Target operations thought that opening over 100 stores all over Canada would be a great opportunity for the company to expand its profitability. However, the exact opposite happened. Instead of reaching their profitability goal, there is an estimated loss between $800-$900 million, since the opening of stores in Canada (Austin, 2014). The cause of this failure was due to a lack of inventory in most stores; leading to empty shelves and many of the favorable brands from U.S. Target’s did not make it to the stores in Canada. Another problem was that prices were higher in Canadian stores compared to U.S. store prices due to shipping costs and tax (Austin, 2014). Target failed to think this whole process through before acting on it. Starting with the 124 stores who all had to be remodeled and up and running in less than a year due to Canada’s policy of not letting any store stay vacant for any longer than that; to having the ability to furnish and fill the stores with all of their merchandise (Nolan, 2014). Soon they came to realize they could not. Target’s lack of looking into the higher prices they would have been paying making it able to get the merchandise over the border into Canada, was another issue leading to the company’s ineffective plans. Having noticed early on that the extra costs of tax will lead to a price mark up on in store products,
Target, as a whole, is huge corporation/business. As a business, in order to stay open and run functionally, Target has to abide by regulatory and/or industry standards. The two regulatory and industry standards that are required for any financial, retailer, and/or business is Payment Card Industry Data Security Standard (PCI DSS) and Gramm-Leach-Bliley Act (GLBA). PCI DSS is a global industry standard while GLBA is a government regulatory standard. Target has to abide by PCI DSS and GLBA.
I believe Target did not properly plan its expansion into Canada. The first issue is the
In this paper, the author will introduce a failure case of K-Mart 's IT modernization system project. In 2001, K-mart took $1.4 billion dollars into this project with the purpose of competing with its rival Walmart. The dream is beautiful, but the real work is cruel. After 18 months, the project was failed because of lacking of cash. What happened in the detailed for this project? $1.4 billion dollar is huge numbers, why it was still not enough to pay and distribute for this project? How did its project manager do in this project? What are the project problems? How can we learn from the failure of this case? The paper includes the case background introduction, the project development process, the problems in the project, analysis and
In 2003 when Nicholas Carr wrote the article “IT Doesn’t Matter” companies were just beginning to utilize information technology as a competitive advantage. Mr. Carr contends that technology is not a permanent advantage because in time the competition will acquire the same resources and Information Technology (IT) just becomes another commodity. For the majority of companies throughout the world IT resources have become easily accessible and affordable. If Mr. Carr’s opinion is correct then the equality of IT access has just become a cost of doing