Four takeaways Caribbean ICT\/tech businesses can learn from Target\u2019s recent decision to close all of its stores in Canada<\/em><\/p>\n
Last week, United States (US) retail giant, Target, announced that it will be closing its entire operation in Canada: this decision has come less than two years after its entry into that market. While for the general populace, especially those outside Canada, the decision might have been a surprise, to those in the know, it appeared to be inevitable. Nevertheless, people are still coming to grips with what went wrong, along with the fallout that will inevitably occur.<\/p>\n
Without a doubt, there is very little similarity between Target, a well-known, well-resourced and highly profitable company, and a small ICT\/tech business or start-up in the Caribbean. However, there are lessons that can be learned from that firm\u2019s failure in Canada. Four are outlined below.<\/p>\n
Though a US company, Target is a globally recognised brand that has enjoyed tremendous success at home. Brand recognition might be strong, it \u2013 in and of itself \u2013 does not in any way guarantee success. Pundits have stated that one of the contributors to Target \u2018s demise in Canada is the fact that it did not understand the Canadian consumer and spending habits, which reportedly differ considerably from their American counterparts (Source: Global News<\/a>).<\/p>\n
If you are in an enviable position as to currently have a successful business, do you know what are the critical factors \u2013 the \u201cmust haves\u201d \u2013 for that success? Though much is made about having a business plan, and it is important, it is also crucial to know and understand the factors that have been driving, or will drive, your business\u2019 success.<\/p>\n
In the case of Target, and perhaps in order to scale the business as quickly as it did, it took over properties previously occupied by a low-end retailer in Canada, Zellers, which many believe, were unsuited for Target in terms of location and aesthetic, to name a few (Source: Slate<\/a>). Hence being well situated to attract the desired the clientele and being able to offer the \u201cTarget experience\u201d it might have been compromised, and would have contributed to its demise.<\/p>\n
Though Caribbean ICT\/tech businesses generally tend to be risk-averse, it can still be easy to get caught up in the potential of an opportunity and not truly pay attention to data until it is too late. However, more importantly, systems must be implemented to collect the data needed to make a meaningful initial business case, and to facilitate tracking and analysis during operation.<\/p>\n
Another reported contributor to Target\u2019s failure in Canada is the fact that it did not appreciate that doing business in Canada was more expensive that in the US (Source: Global News<\/a>). Although Canada is larger geographically than the lower 48 states (of US), the latter is considerably more populous. Hence matters such as transportation and staffing costs in Canada, along with the cost of doing business generally and a weaker currency in comparison to the US, would have affected the extent to which Target would have been successful in Canada, and more so if no major steps were being implemented to manage them.<\/p>\n
Target\u2019s entire operation in Canada was about two years old, but in that time, it opened 124 of the 133 stores it currently has in its first year, 2013 (Source: Slate<\/a>). Many are of the view that this expansion was too fast too soon, with no provision made to learn and accommodate the inevitable teething pains that virtually all businesses experience. One of the outcomes of that situation were poorly stocked shelves in Target stores across Canada, which suggests that critical systems, such as those related to supply and distribution, were not as developed and as responsive as they needed to be for the circumstances at hand.<\/p>\n
Image credit;\u00a0 Marius Watz<\/a> (flickr)<\/em><\/p>\n
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