Target’s entry into the Canadian was more disadvantageous than it was advantageous to the company. The presence of competitors such as Walmart and Target’s decision to open several stores in a short duration mean that much money and time would be taken for the company’s Canadian sales and profits to reach necessary levels, and the only way out was to exit the Canadian market. To exit or withdraw from the Canadian market, several steps needed to be followed. First, Target Canada had to make an announcement of its imminent exit from the Canadian market, clearly stating the period over which the same would be achieved. In fact, Target Canada made an announcement that it would close all of its Canadian locations and stores (133) over a period of five months, a move that would see it put 17,600 people out of work. Second, Target Canada had to declare insolvency, and in doing this, it had to apply for court protection under the Company Creditors Arrangement Act. Through this insolvency law, Canada would state its intention of closing all of its Canadian stores, preventing any interferences or disturbances from Canadian authorities during the exit or withdrawal process. Third, and most important, Target Canada needed to state how it would compensate Canadian employees that would be affected or displaced as a result of Target Canada’s exit. In doing so, it sought the court’s approval to voluntarily contribute US $70 million toward providing displaced Canadian employees with a minimum of 16 weeks of wages and benefits. Target Corporation’s exit from the Canadian market would see the incurrence of significant costs, with the company announcing that it would take a USD 5.4 billion write-down on the closure. Besides, it was expected that the cash costs for the shut-down would exceed USD 500 million. One of the major objectives of Target Corp’s withdrawal from the Canadian market was to see an increase in Target US’s sales, an objective that was achieved underlining the fact that its withdrawal from the Canadian market had a carry-over impact on Target US’s sales. The withdrawal meant that the diversion of significant resources and management attention from the US, which represented 97 percent of the latter’s revenue was curtailed. In fact, upon the close of Target’s Canadian stores, its shares in the US rose by 3 percent, meaning that the corporation made the right decision with an increase in revenues and profitability in mind.
Target Corporation’s priority after withdrawal from the Canadian market was to put together a plan to boost the profitability of its US stores. Target’s first venture was in the US market, where by 2001, it had become a dominant player in the retail landscape with over 1000 stores in 47 states. By 2002, Target recorded sales of $40 billion, a figure that exceeded that of rival Kmart for the first time making Target Corporation the second largest discount store in the US in 2002. Target’s focus at the time was on fashion merchandise, to which the US market became acquainted. As such, in the shift from the Canadian market back to the US market, Target’s chances of boosting profitability depended on whether its focus remained on fashion merchandise, of which the US market was already aware. Changing from fashion merchandise to other products would jeopardize Target’s hopes of boosting profitability in the US market, especially with significant losses recorded during its time in the Canadian market. Upon shifting focus on the US market, their guests or customers expected quality items and low prices as was the case before. Target’s guests in the US market also expected an improvement in terms of service quality in areas such as cleanliness of stores, shorter line-ups at the cash register, and better shopping environments and experiences. Of course, with the security breach witnessed over the 2013 holiday season, lingering effects of the same were expected. One of the lingering effects of the same in the US market upon Target’s shift of focus from the Canadian market to the US market was the significant reduction in the number of customers. However, with a new CEO, Brian Cornell, and embrace of tight data security measures, there is no doubt that the negative publicity could be overcome.
Despite pulling out of the Canadian market so abruptly, Target Corporation had prospects for future international expansion. Once economic stability and profitability were restored with the refocus on the US market, Target prospected at having stores in Mexico, Europe, or Asia. Given Target’s success upon its entry into the Canadian market, an attempt to re-enter the Canadian market cannot be ruled out. However, Target’s reentry into the Canadian market would come after economic stability, and profitability is restored in the coming years. However, reentry into the Canadian market would take into consideration myriads of factors. For instance, unlike before, Target would have to understand the Canadian market and ensure that most of the staff members in future stores are Canadians. As already mentioned, Target’s expansion prospect took into consideration other international markets such as Mexico, Europe, and Asia. Target’s entry plans into these markets should include having a clear understanding of the markets as well as giving priority to locals when it comes to employment opportunities. With Target stores nearing saturation in the US market, international expansion remains a possibility, and necessary steps or plans should be put in place is the said objective is to be achieved.