Information Systems Problem

Target Corp., a US based discount retailer ventured into the Canadian retail market in 2011. The American retail giant opted to acquire assets previously owned by the Canadian firm Zellers in a deal worth 1.8billion dollars. Target renovated acquired stores and embarked on an employee recruitment drive. According to an article published on the Globe and Mail (Strauss, 2015), the discount retailer’s 7 billion dollar investment in the Canadian retail market ended in failure. This paper seeks to review two articles published on the Globe and Mail website and further attribute the failure of Target Corp. to information systems problems. The paper will also discuss solutions which could have made the firm’s presence in the Canadian retail market a success.

McMahon (2015) provides a graphical representation of Target Corp earning before taxes and interest which exhibits losses since into entry into the Canadian market. The graph provides that Canadian consumers positively embraced Target’s entry into the Canadian retail market. As Strauss (2015) explains, a good number of Canadians had hade a positive consumer experience while shopping at Target’s discount retail stores in the US. As such, they were pleased to have the US firm open stores in Canada.

In its first nine months, the retail firm had opened up a total of 124 retail stores in Canada (McMahon, 2015). This was an extremely poor investment decision as the firm did not have good market intelligence on the Canadian retail market’s environment. Canadian firms like Canadian Tire improved its operations in an attempt to remain competitive upon Target’s entry into the country. Consumers quickly began complaining of overpriced goods and services, lack of broad variety of products and virtually no online presence (McMahon, 2015).

Canadian retail market shoppers are known to shop at different stores for different goods and services and as such this information was not available to target during its entry into the Canadian market (Shaw, 2015). Executives at Target failed to incorporate progressive strategies that would have balanced revenue growth and expansion as well as use information system based strategies. Information system based strategies would have presented them with good data for better analysis on consumer trends and preferences in the Canadian market.

The rapid expansion of Target Corp into the Canadian retail market resulted in logistical problems and poor understanding of a new market. This could have been mitigated by the setting up of a robust and reliable information systems framework (Shaw, 2015). From the two articles published on the Globe and Mail website, the company virtually had no online presence. The inventory management shortcomings that led to empty shelves and high pricing of goods exhibit a lack of a strong information system at Target’s Canadian subsidiary.

A strong online presence would have presented marketers and the operations department with information aimed at ensuring Target had a competitive advantage over its consumers (Shaw, 2015). Social media marketing would have provided Target with information on the consumer preferences and trends needed to adequately stock shelves and price commodities. Content marketing would have also enabled consumers gather online information on commodities offered at target. Feedback from consumers would have bee invaluable to the operations department at the firm. A strong information system would have enabled logistics manager to liaise with other Target stores and as such enabled them to appraise the inventory management system and sidestep logistical glitches.

References

McMahon, T. (January 15, 2015). Missing the mark: Five reasons why Target failed in Canada. The Globe and Mail. Retrieved from http://www.theglobeandmail.com/report-on-business/missing-the-mark-5-reasons-why-target-failed-in-canad/article22459819/

Shaw, H. (January 15, 2015). Target Corp’s spectacular Canada flop: A gold standard case study for what retailers shouldn’t do. Financial Post. Retrieved from http://business.financialpost.com/2015/01/15/target-corps-spectacular-canada-flop-a-gold-standard-case-study-for-what-retailers-shouldnt-do/

Strauss, M. (January 15, 2015). How Target botched a $7-billion rollout. The Globe and Mail. Retrieved from http://www.theglobeandmail.com/report-on-business/target-killing-canadian-operations/article22458161/

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