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Department store based out of the United States
First location opened in Minnesota on May 1, 1962
“New idea on discount stores” #1 revenue producer on 1975
Target Company
2011: Proposed to take over Zellers 2013: 124 stores enter Canada 2015: Stores are closed due to the
unsuccessful business that is brought in
The huge failure of the Target Canada
133: The number of stores closed 17,600: The number of unemployed labor $70,000,000: The compensation Target had to
provide. $5,400,000,000: The pre-taxed operating
deficits at the end of the fourth fiscal quarter in 2014.
$27,500,000,000: Total expected loss in fiscal year 2015
681days: Number of operation days before Target announced its’ withdraw.
They failed in the stage of the implementing of intermediate-range plan.
The huge failure of the Target Canada
A poor demand forecast
0 50000000 100000000 150000000 200000000 250000000 300000000 350000000
PopulationCanada America
A poor expansion strategy
1. Target Canada’s managers were overconfidence2. Target chose to stay back, do little promotion when competitors like Wal-Mart, who directly set off a price war, was fighting against the new invader.
A poor expansion strategy
1.8billion dollars
120Inappropriate locationBad reputationAim at different level of customers
Who will manage the Target Canada?
OR
Extra training and exploring program dragged down the company at the beginning.
The problems of supply chain
0.4881%
19%
Canadians who know targetCanadians who wanted to go to target canadaElse
The problems of supply chain
The Target's special product that have the American characteristics
The same shopping experience at the Target US
Customers’ expectation
Target Canada
Failed to bring a unique assortment of products to customers
The price is higher than customers' expectation
Target US
≠Target Canada
Empty shelvesOpened 133 Canadian stores since April 2013
Defect with inventory planning
Supply chain overwhelmingFailed to keep up with the demand
Only a little thing available for them to buy
1/5/2002 1/6/2002 1/7/2002 1/8/2002 1/9/20020
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15
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25
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Demand Supply
Goodwill
Empty shelvesEvery merchandise category was short of supply
The success of the Century Mart
Started its business in 1991 IPO in 2003 One of the biggest retail companies in
China. More than 5000 stores in 22 provinces Annual sales volume in 2014:
61,700,000,000 RMB
Demand ForecastThe franchisee business is applied to the operation, which enhances the efficiency of demand forecast and helps company to make a future plan.
WorkforceUnder the mode of franchisee, each store hires local people as employees in order to promote the business.
External CapacityThe franchisee stores purchase goods individually makes it possible to reduce shipping expense, to guarantee quality and freshness of goods. In addition,it makes more opportunities to cooperate with different suppliers.
InventoryA perfect classification system and the VPN system help Century Mart make a great success of inventory management.
Target Canada Century Mart
Demand forecast Poor demand forecast Predict demand to exploit new market
Workforce Use managers from America
Train local staffs
External capacity Lack American special items Products are transported from America
Increase direct suppliers
Inventory Empty shelves An integrate system
Estimated timelines
Minimize staffing fluctuations
Reduce overhead expenses
Production rates increase
Aggregate planning assists them with determining:
Advantages:
Staffing requirements
Products needed