A Detailed Analysis on Target Canada ERP Implementation failure
Lavanya Pentyala
Regis University
10/04/2017
Abstract
Target is one of the largest and most successful retailers in united states. As part of business expansion, Target announced its launch in Canada. Target decided to implement a new application for Canada, as part of this they decided to implement SAP Supply Chain Management(SCM) Module. A typical SAP Supply Chain Management includes various modules that automate supply chain planning, supply chain coordination, supply chain networking, and Supply Chain Execution (SCE). Target team couldn’t succeed in the implementation of SCM modules, and it led to a major setback for Target in Canada. This paper discusses and describes the
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Target announced its plans to extend to Canada by purchasing the lease agreements of almost 220 Zellers stores. Target announced plans to open 133 stores and hire 27,000 new workforces to support its expansion into Canada. Target’s arrival was highly expected by consumers and feared by rival retailers. Target couldn’t use its in-house software for Canadian expansion, since it was built specifically for the use of Target in the United States, and couldn’t handle French characters or Canadian dollars. Target planned to start afresh. No currency or data conversion just set up a new system and entry. Target decided to implement a full SAP package solution, but the master data failure within the SAP system led to death of Target in Canada. (Gewirtz, …show more content…
Target didn’t plan for extending its existing data entry system, instead the data being used either had to be exported or entered from scratch. The company had to track around 75,000 products. Each product demand a lot of information. It wasn't just the width, height, and length of each item. The information includes the vendor, UPC code, pricing, weight, costs, and more. Essentially, each product needed a couple of pages of data to be entered in. During this process lengths were entered where widths needed to be. The wrong prices were entered. The wrong descriptions were entered. Low-level marketing assistants were pushed on impossible deadlines to enter thousands upon thousands of fields of information. The final information system has nearly 70% of data wrong. (Gewirtz,
Target’s first foreign store investment was in Canada; American stores look to Canada as their first foreign investment because the differences between the two countries are relatively minor. Other stores that have expanded to Canada include Wal-Mart, and Sears, each of these companies proved to be prosperous in Canada. Canada is one of the wealthiest countries in the world and is dominated by the service industry, Wawa would have no trouble fitting into the culture Canada has and dominating the market as they do here, in the United States. After reading about Canada and Wawa, we have realized this move could only benefit Wawa and help their reputation and build their company.
Target, a high-end discount department store, hoped to continue expanding and adding to the company’s 1,752 stores, by purchasing 200 Zellers stores, located in Canada. One of Target’s, longtime goals was to expand into Canada , and after a decade, the company took a jump across the border (Shaw, 2011). Because many thousand Canadians hold a Red Card, Target’s reward card, Target assumed this would be a successful expansion, increasing the amount of US brands that encompass Canada’s market. Target spent a year converting the Zeller stores, altering and renovating them to transform them into Target Canada, a subsidiary of Target (Shaw, 2011). They opened 124 stores in locations all over Canada, hiring back only one percent of the former Zellers employees, desiring to make a fresh start for the department store chain (Target Refused Zellers Workers).
The Canadians and Target both lost out on opportunities that could have excelled them both in distinct ways. For the Canadians, Targets poor attempt at going global costs Canadians their jobs when the retailer had to close its stores. The retailer also is looked upon negatively for having expectations of going global that were well beyond their reach and executed poorly.
The security breach involved most of the Target stores in the U.S. Along with the card numbers, debit card pins, buyer’s names, and personal information were stolen as well. Some customers filed a lawsuit against Target for “failing to protect customer data.” (Demarche, 2013. p.1). Later, Target CEO Steinhafel stated, “I know that it is frustrating for our guests to learn that this information was taken, and we are truly sorry they are having to endure this.” After Steinhafel issued his apology he doubled the amount of employees to take phone calls from customers, as well as give a ten percent discount to those who shopped on the 28th and 29th of December.
Overall, I believe that Target needs to take a two-prong approach to the collection and management of personal information. First, they need to draft a clear privacy policy that everyone will understand. If they want to sell information to third-parties, then the people have a right to know who. Then, in that policy, Target needs to have a way to give people control over their private information perhaps through a website. This would give shoppers the opportunity to update and correct the data giving Target the most accurate depiction for marketing purposes. People do not really understand that their privacy is being jeopardized until it is too late. Target could be an ethical leader in this area which probably would increase their profits even more.
Customers are appealed by Target’s consistent value of their products and customers. “With 1,793 stores in the U.S.”, Target assures that their layout, merchandise, visual merchandising, and service all contribute
On December 19, 2013, Target Corporation released a statement, informing the world that their network has encountered a security breach, and over 40 million customer credit card information was stolen from nearly 2000 Target stores. The breach happens in November 2013 around Black Friday weekend, but Target security team did not discover that there had been a security breach to their system until days later. Initially, Target announced that the hacker had gained access through a third-party vendor, to the customer’s point of sales, from Target’s credit card reader, and manage to collect over 40 million
Understanding the changes in the market and the growth of e-commerce prompted the organization to invest heavily in its supply chain management forecasting and management system. The development of a network of distribution centers and Direct Fulfillment Centers to position the company to capitalize on the growing e-commerce market indicate a strong understanding of the need to adapt to changing market forces. The company spent over $300 million on new distribution center facilities in 2014 alone, and continues to expand to maintain efficiency in product movement (Cassidy,
The system Target uses for its website has been very helpful in putting them at an elite spot in resolving customer issues. For example, its MIS system has a way of collecting a customer’s actions on their site as they shop. That way when they run into a problem and call for support, the call center representative will most likely already know and have information readily available to help the customer and resolve their issue (Vijayan). Target began using that system in 2001 as its new CRM (Customer Relationship Management) system. This system is proof of the efficiency MIS brings to the table for large corporations like Target.
The second part of Target's value chain is produce. It is important that all products carried by Target are created with integrity by companies that obey the law. One way positive relationships with these vendors is formed
The purpose of this presentation is to provide a comparative analysis of business activities of two well-known representatives of the US retail industry, Target and Walmart. My research is focused on a business strategy of these largest and most experienced American merchandising companies; particularly, on their activities in Canada. Based on the data collected from the various sources, I would like to detect, analyze, and demonstrate the obvious causes that have lead to a catastrophic failure of Target in its unsuccessful attempt to win a Canadian market.
Inventory problem: Canadians were aware about target and had pretty huge expectations from them but the reality was completely different. Beautifully revamped stores couldn’t veil a useless production network and in store stock administration framework that left retires exposed and shoppers profoundly disillusioned. They were really disappointed when they saw the bare shelves.
Target Corporation needs to increase product availability based on the customer needs using a forecasting and supply chain
In December 2013, Target was attacked by a cyber-attack due to a data breach. Target is a widely known retailer that has millions of consumers flocking every day to the retailer to partake in the stores wonders. The Target Data Breach is now known as the largest data breach/attack surpassing the TJX data breach in 2007. “The second-biggest attack struck TJX Companies, the parent company of TJMaxx and Marshall’s, which said in 2007 that about 45 million credit cards and debit cards had been compromised.” (Timberg, Yang, & Tsukayama, 2013) The data breach occurred to Target was a strong swift kick to the guts to not only the retailer/corporation, but to employees and consumers. The December 2013 data breach, exposed Target in a way that many would not expect to see and happen to any major retailer/corporation.
Target Corporation pioneered value chain activities like focusing on customer experience through superior marketing, ability to attract global talent, sustain in and outbound supply logistics, develop supplies with a high-quality vendor and partners, a great customer service, extend return by 30 more days if purchased through Target brand store cards, and a skilled workforce supports its generic strategy of "Expect more Pay Less" improves competitive position that its rival cannot match. --