Read the mini case study below. It documents a projects (in some cases catastrophic) failure. In light of this modules topics, discuss two contributing factors to the failure of this project. Challenge and comment two of your peers choices

Scheduling Resources and Costs

Organization: Target Canada

Project type: Retail store opening

Project name: Unknown

Date: Jan 2015

Cost: In the region of $7B

Synopsis:

Drawn by lower prices, it is common for Canadian families to cross over into the USA to grab their shopping. One favorite destination has always been the US retailer known as Target. Famous for their large red and white bulls eye logo, Targets reputation for good choice, low prices and solid quality was a natural choice for Canadians wanting to stock up on household products, clothes or electronics. Having reached a point of maturity throughout the USA, Target started looking for international expansion opportunities and their relationship with Canadian households seemed like a logical path forward.

As an entry strategy Target purchased 189 leases from the ailing Canadian retailer Zellers. Zellers had sold similar products to Target, but had failed to attain consistent profits. Providing access to many of the major malls across Canada, the move cleared one of the major competitors from the market and avoided the need to build up a retail presence on a piecemeal basis. The move however also committed Target to going big and going big quickly. While some leases were sold on to other retailers, Target arrived in Canada with a bang. Opening their first store in March 2013, they rapidly expanded and reached a peak of 133 stores in little more than a year and half.

Expect more

Targets in-store marketing sign Expect more click for larger image

Excitement was high and so were expectations. Canadians were used to the low prices in the US stores and expected a similar experience in Canada. Unfortunately those expectations werent met. Prices were comparable with other local retailers and the Target name was not enough of a draw. When youre selling commodity items as mundane as toothpaste, the brand on the box matters, the brand on the receipt does not. Compounding the problem was the fact Target Canada suffered from supply chain problems that meant empty shelves that should have been stuffed with key products. Those problems were reportedly linked to the development of a new supply chain software developed specifically to support Targets expansion into Canada [4]. Used to high stock levels and plenty of choice, todays buyers dont have much patience for a store that doesnt have what they want when they want it.

The impact was immediate and financial performance was lackluster at best. I personally visited a number of Target stores when Target first arrived and given the size of the stores the number of customers could only be described as sparse. Those problems persisted as the rapid expansion of stores progressed and continued reports in the Canadian media reflected the disappointment Canadian shoppers were feeling. Those reports likely helped keep other shoppers away and Target Canadas financial results remained weak. Various promises to address the concerns were made, but none gained the traction needed to put the project on the road to success. On Jan 14th, 2015, Target Canada threw in the towel. With reports indicating that Target Canada may not have enough cash to make the next payroll Target Canada filed from bankruptcy. Total losses from their Canadian adventure are said to be in the order of $7B.

Note: In something of an ironic twist, Targets own in-store marketing was telling the customers to expect more. Expect more. Pay Less signs were prominently displayed throughout the store. It appears Canadians took the advice. They did expect more and they did pay less. Unfortunately the reason they did less paying was because they were doing less buying. Given the stories in the media concerning Targets price practices in Canada versus the USA, perhaps an alternate marketing slogan may have been more appropriate for the Canadian market.

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