international

View video and answer the questions: https://www.youtube.com/watch?v=vIBqv2BDU4E

U.S. discounter Target Corp. saw its overall results pulled down by a tougher-than-expected entry into the Canadian market, the company’s first foray outside its borders. Since venturing into the Canadian market in March 2013, the company has been plagued by supply-chain problems that led to empty shelves and profits far below projections. The company has also faced criticism from Canadians who say that the 127 Canadian stores and prices have failed to live up to the standards set by their American counterparts. On June 17th, Target Canada even issues an apology to Canadians. Below are some of the issues:

1. A steeper than expected learning curve in Canada

Target senior executives say their initial assessments of the Canadian market and customer habits were off. Shoppers north of the border, for example, don’t share the American habit of going to just one store to buy goods in a variety of different categories, everything from apparel and appliances to food and drugs.

2. Disappointed shoppers

Canadians, especially those who had already shopped at Target stores in the U.S., anticipated the same low prices as south of the border. They were less than receptive when they found out that prices in the newly opened Target Canada outlets were higher than in the U.S. Target management says prices at Canadian locations are in line with those of rivals like Wal-Mart Canada Corp.

3. Difficulties finding the right balance in the supply of merchandise

Target Canada overstocked in some areas but experienced a lack of inventory in others, resulting in a serious imbalance. There were empty shelves for some items because of the chain’s inability to meet high demand, while excess inventory elsewhere resulted in major clearance sales.

4. Fiercer-than-anticipated competition

Not to be caught short by the new kid on the block, archrival Wal-Mart Stores Inc. moved to expand its number of stores in Canada, cut prices and push further into food. Other players such as Loblaw Cos. Ltd., Shoppers Drug Mart Corp. and Metro Inc. also stepped up their game.

5. The high cost of entry

The cost of rolling out 124 new stores hurt more than it should have in the context of sales that failed to attain the goals the company had set out.

1) As a Management Consultant, what advice will you give Target Canada as it pertains to creating value (utilizing the corporate theory of value creation) and eventually become a success in Canada.

2) Based on the two articles that you read, what did Target Canada fail to do? Do you think they engaged in environmental scanning?

3) Global integration is the production and distribution of products/services of a homogenous type and quality on a worldwide basis, while national responsiveness is the need to understand the different consumer tastes in segmented regional markets. With that being said, what approach should they use in Canada? What approach should they use in Mexico? Provide a rationale for your response.