The ‘Japa’ (Nigerian slang for relocate) syndrome which has swept across Nigeria is centered around migration from Nigeria to three main countries: USA, UK and Canada. Recently, Canada has been regarded by most intending migrants as the country of choice, mainly because it provides more migration pathways and has a discrimination-free application process. The prospects of better economic and other forms of progress often fills most migrants with hope and optimism. Target Corporation must have been equally optimistic as they planned their business expansion into Canada. As I and my colleagues analyzed their expansion venture, I was reminded of the proverb ‘look before you leap’.
Target Corporation was a success in the United States, where it operates more than 1,800 stores. The company was known for its low-priced, trendy merchandise, and exceptional customer service. Encouraged by its success in the US, Target decided to expand into Canada, a market that seemed promising, given its proximity to the United States and the similarities between the two countries.
However, Target faced a lot of challenges during its Canadian venture. One of the key challenges was Target’s lack of understanding of the Canadian market. The company failed to recognize the significant cultural differences between the two countries, such as differences in consumer behavior, shopping patterns, and preferences. Target assumed that what worked in the US would work in Canada, which proved to be a costly mistake.
Another challenge Target faced was logistical issues. The company encountered problems with its supply chain, which resulted in empty shelves, delays, and inconsistent product availability. This led to frustrated customers and lost sales, which further impacted the company’s reputation in Canada.
The case study also highlights Target’s missteps in its marketing and advertising strategies. The company failed to communicate its value proposition effectively to Canadian consumers, resulting in confusion and a lack of interest. Target also made the mistake of charging higher prices for its merchandise in Canada than in the United States, despite the weaker Canadian dollar, which alienated potential customers and further impacted the company’s sales.
In addition to these challenges, Target also faced intense competition from established retailers such as Walmart and Canadian Tire. These retailers had already established a loyal customer base, which made it difficult for Target to gain traction in the Canadian market.
Ultimately, these setbacks took a financial toll on Target’s Canadian venture. The company lost more than $5 billion in its Canadian operations and was forced to close all its stores in the country. Perhaps, the excitement of conquering a new frontier overshadowed the need for thorough market research, localization, and adapting to local cultural norms. It also seemed that the company was not agile and responsive enough to changing market conditions and to learning from their mistakes.
The case study provided valuable insights into the challenges of international expansion and the importance of understanding the local market. The study highlights the pitfalls that companies can encounter when they fail to adapt to local cultural norms, consumer behavior, and preferences. It serves as a cautionary tale for companies planning to expand into new markets and underscores the importance of conducting thorough research and analysis before embarking on any new venture. In some way, I find this case study very instructional for intending migrants, who need to diligently assess the pros and cons of their new environment before making a decision and not just relocate on a whim.
The Art of Communication