Aiming to conquer the Canadian retail market, Target opened its first store in Canada in 2013. However, things did not turn out to be like Target’s plan.

“We definitely were slammed,” said John Morioka, senior vice-president of merchandising at Target Canada. “We thought there would be an initial bump. The bump has not levelled off to the degree that we thought.”

One reason why Target has bad performance in Canadian market is that being a retailer with cost leading strategy, Target fails to compete against its rivals in Canada in price—more specifically, Walmart.

Another reason is that Target misjudged the competition in Canada. Its American rival, Walmart, has been in Canadian market for a decent amount of time and Walmart has established early advantage over Target and high buyer power in local suppliers. Using its buyer power, Walmart manipulates the local supplier to its advantage. As a result, Target confronts difficulty getting products from local supplierS and has many empty shelves.

Through the analysis of the situation, I suggest that in stead of expanding, Target should first improve its operation system in Canada—specifically, the supply chain. A successful operation system  is necessary for a retail business to grow.

Pictures are from https://www.google.ca/