Target In Canada Case Analysis

With the trend of globalization, more and more local companies expand their businesses to overseas markets. As for Target, a U.S. company launched in 1902, aimed at providing higher quality shopping experience in supermarkets with lower price, just like its brand says: “Expect More. Pay Less.” As supermarket chains, Target has large share of merchandise market in the U.S., and becomes the second-largest retailer of merchandise in 2013. In 2011, Target launched Canada and purchased around 220 stores, with original goal of gaining annual revenue of $6 billion by 2017. However, the performance of Target Canada was not as well as expected, this company suffered from a huge EBIT loss and low gross margin compared with the U.S. segment.

Facing the failure of operation in Canada, Target’s CEO decided to reevaluate its investments and adjust its strategies in Canada, in order to improve the financial performance of it. There are several possible solutions that could help Target.

First of all, Target need to improve its business in the U.S. market. According to Marcel Corstjens and Rajiv Lal, the success in home market is the key element of globalization. Since in retail industry, the local retailers are always at dominant position in domestic market. Compared with foreign retailers, …show more content…
From the financial statement of Target and Walmart, we find that in 2012 the comparable sales growth of Target is 2.7%, which is higher than the 1.6% of Walmart. However, in 2013 the comparable sales growth of Target is -0.4%, whereas the Walmart has growth rate of 2.4%. From the perspective of the total number of stores, in 2013 Target has 1793 stores in the U.S. while Walmart has 4,005 stores. From these two aspects we find that in the domestic market, Target was not in the advantageous position, actually, the competition from Walmart threaten the business growth of