Project failure in the business world is a result of lack of proper implementation of the project management principles. Most businesses focus on the partial implementation of the concepts, or they are in a rush to complete the project an aspect that results in poor project performance. The paper will evaluate the failure of Target Corporation expansion plan concerning penetrating the Canadian retail industry.
Project management refers to the application of knowledge, skills, methods, and concepts to ensure the requirements of a project are fulfilled. White elephant projects often arise more common in social projects than in business one due to the high amount of investment that is channeled in the achievement of the project (Larson & Gray, 2013, p. 11).
Target Company launched an impressive expansion project to Canada that ended up in complete failure. The company has a successful track record in the USA retail industry. The company building on this successful track record decided to venture into the Canadian market. In Project management, the time frame is set before the initiation of the project in this case the retail store had set a time frame of 10 months for the project to be completed (Megitis & Schuster, 2015, p.13).
Target bought 220 leases of the Zeller stores in Canada in January 2013, that was a declining Canadian discount chain store located in Hudson Bay. The retail store required extensive remodeling to improve its outlook as most of the stores had been neglected by Zeller store.
The immense desire to open the stores within the hyped time frame made the American retail store to ignore most of the project management steps that had been stepped up. The time frame set up was unreasonable for them to be able to open over 120 stores in Canada and stock them entirely (Megitis & Schuster, 2015, p.13).
In project management, comprehending the scope of the project does increase the success as the project team members can comprehend the magnitude of their operation. The magnitude and scope of the Target project were under estimated which resulted in poor coordination of the entire project. Target Company has a renowned design in their stores that sets it apart from other stores in the USA.
The retails store was focussing on bringing this concept to the Canadian market, but the poor state and design of the retail stores increased the magnitude of work that had to be done (Austen, 2014).
In project management, the managers and their teams work hard to control the level of uncertainties. In the case of the Target launch into Canada, it seems the complete evaluation of the project was not conducted to pinpoint all the hurdles that they were likely to face. The paper will delve incorporate the project management techniques and concepts in the evaluation of the reasons why the project failed immensely. Forcing the company to count their losses and close all the retail stores in the Canada and move back to the USA to regroup.
Project management: Project Life Cycle
All projects fall into five groups, which are an initiation, planning, execution, monitoring and controlling, and finally closing. The initiation refers to the commencement of the project where the idea generated is evaluated to determine if it is viable and will benefit the goals and objectives of the organization. In this phase the decision-making team which in most cases is the top level management evaluate the feasibility of the project and the resources required to ensure the success of the project against the benefits (Kerzner, 2013, p. 15).
In the case of Target Company was successful in the USA market and they were looking for new opportunities concerning global expansion. The company preferred the expansion in the form of physical brick and mortar retail store to e-commerce. The selection of Canada as the suitable area to launch their expansion plan was based on the fact that the country is geographically close and the Target market was popular among most Canadians who had visited the USA (Dahlhoff, 2015).
This reduced the marketing and advertising cost that would be required to create customer awareness about the retail store. Another factor that was taken into account in the selection of the country was that they were facing minimal levels of recession when compared to the USA. This meant that the consumer had more disposable income compared to the USA consumers, hence increasing the chances of the retail store to make high levels of profits (Dahlhoff, 2015).
The second phase of project management is planning. The planning phase refers to creating a detailed outline that transforms the feasible idea into a plan. The plan does guide the execution of the project as it details the series of steps to be followed in the utilization of the resources. It does ensure that the project team members can manage cost, time, quality, change, and risk among other issues (Serrador, 2012, p.5).
In the case of Target Company, the retail store failed to come up with a comprehensive plan that would have increased the success of the company in their launch of the retail store. The first dent in their plan is that they bought Zellers stores that were widely known. It seemed like a good idea in the initiation phase as the retail store was built on a present store and they, therefore, did not need to start from scratch (Banjos & Trichur, 2014).
The defect in this plan was that the Zeller location was located in areas that were difficult to access and had limited storage spaces. The Canadian customers were expecting the launch of large retail stores in the country that were similar to those in the USA. The downpour on their expectations resulted in negative reviews from the customers an aspect that decreased their sales (Banjos & Trichur, 2014).
The third phase of project management is execution phase, which is the longest one in the project management lifecycle. The execution phase is when deliverables are created and completed. During this phase, the members involved in the project are informed of their roles. The project manager does monitor and controls the utilization of resources and expenditure as during this phase a lot of them are expanded (Burke, 2013, p. 23).
In building the deliverable, the activities are undertaken often vary with the type and scope of the project. The activities are often executed in either a waterfall or an iterative manner. In a waterfall, the sequencing aspect is introduced where the projects are run one of another until they are completed while iteratively the deliverables are made until the needs of the customers are met (Burke, 2013, p.23).
In Target Company the project was executed iteratively. The retail store had purchased 220 stores from Zeller, but due to the short time frame of 10 months when they were expected to open their stores they had to rush the remodelling and design. The project managers were forced to alter their waterfall sequence and bow down to the pressure to open the stores on time.
The number of stores to open was reduced to 122 to meet the organizations tight opening time. The aspect was the genesis of their downfall as the project managers were unable to recreate the stores to resemble the ones present in USA (Wahba, 2015).
According to Leach, (2014) the fourth phase of the project life cycle is focussed on monitor and control which focuses on ensuring that all the resources are utilized to achieve the goals of the organization. The resources that are monitored are time, cost, procurement, change among others (p.27). The Canada expansion project was poorly monitored hence the high losses that the company incurred.
The purchase of the Zeller store was a poor strategy. The company could have benefitted more from renting their stores that would have been easy to simulate to the retail stores that they have in the USA. Additionally, there were a lot of subprojects that were started within the main project that ended up overshadowing the main project.
The company’s marketing team had created a huge hype for the opening of the retail stores in the country. The hype placed a lot of pressure on the management and project team which resulted in them racing various components of the project to beat the unrealistic opening team set up by the management team (Wahba, 2015).
Time and cost management come into play within this phase. Time management is the process of managing the time spent in the completion of a project. The time sheet form or the Gantt chart is used to create a projective time scale that the project will run and provides guidance on ways to execute the project (Lewis, 2010).
As discussed in the paper the concept of time management contributed immensely to the failure of Target Company to launch their stores in Canada. On the cost management aspect, the company had underestimated some finances required to launch the project in totality (Sorensen, 2015).
Target market did not carry out an extensive study of the retail industry in Canada. There are many other retail stores in Canada that posed a huge challenge to the company like Wal-Mart. In most cases when a business enters a new market, they either have to start small and build their brand or merge with another corporation (Sorensen, 2015).
Change management refers to the process whereby alterations to the project scope are evaluated and approved for them to be implemented. The project encountered some changes when it stepped into the Canadian market, which they had not anticipated. In the case of Target Company, they were new to the Canadian retail industry and. They purchased Zeller who was one of the big discount stores in the company. The company was thrown into a big feat to not only set up their operations to meet the size of Zeller but to also meet the customer expectations of the Target retail store (Sorensen, 2015).
Procurement and Logistics management focuses on the consolidation of all the suppliers and distributors under one umbrella. It ensures a seamless flow of supplies from the distributor to the requester. This aspect is enshrouded in building supplier/distributor relationship that enforces the spirit of confidence among them (Chen, 2015, p.1398). The confidence makes the suppliers and distributors go out of their way to deliver the supplies where they are needed.
Moreover, in the retail industry, the inventory notion cannot be ignored it is pertinent to the success of the stores. The managers of the retail store need to ensure that their warehouse is located at the central point that will enable them to access their requests on time (Leach, 2014, p. 27).
In the case of Target Company when they opened their retail store the happy bubble quickly busted when their customers encountered empty shelves in their different stores. Additionally, they had limited product offerings in their retail stores especially the products that were mostly stocked by their retail stores in the USA like Cherry Coke soft drink. The store does operate on the principle that they are a one stop shop, but in the scenario of Canada this was not the case. It increased negative reviews from their customers resulting in a sharp declining in sales and a damaged reputation in the country (St. Louis, 2015).
The problem is attributed to the fact that their warehouse was located at a far point from the retail stores. The poor positioning of the warehouse delayed the arrival of the orders to their 122 retail stores in different parts of the country. Moreover, the company had not established any relationship with the suppliers in the nation. The lack of supplier relationship affected the speedy delivery of products into the stores; most of the suppliers operated on a cash basis as the retail store was new and had no credit track record in the nation. The aspect resulted in them being unable to stock their stores with the products needed within the predetermined time frame to satisfy their customers’ needs (St. Louis, 2015).
The last phase of the project cycle is closing. In the closing, the entire life cycle is evaluated to determine if the objectives that initiated the project have been met. In the case they have been fulfilled, we then conclude that the project is successful in the case they have not been met the project is termed as a failure (Kerzner, 2013, p. 17). In the case of Target Company as discussed in the paper the expansion project was a total failure and resulted in not only immense losses that amounted $ 7 billion but also damaged the reputation of the retail store (St. Louis, 2015).
According to Johnson, Scholes & Whittington (2008), stakeholders are the individuals that have an interest in the operations of the organization. The stakeholders might be actively engaged in the project concerning its completion. Additionally, the stakeholders have the power to influence the project either positively or negatively. In other words, they are the main drivers of projects as they ensure that the resources are required to carry out the project are readily available.
In the modern project management, stakeholder engagement has taken the central role. They are more actively involved in the running of the projects in different areas. The involvement of stakeholders in the organizations is a show of corporate responsibility. The stakeholders include investors, employees, customers, suppliers, distributors among others. All of them benefit directly or indirectly from the successful completion of a project (Tammer, 2009, p.4).
Based on the stakeholder discussion, when they are ignored in the implementation of a project the chance of failure is higher. This was the case in the Target Company global expansion project in Canada; the stakeholders were not actively involved, hence the huge amount of losses. The customers’ needs were not taken into consideration to determine the type of retail stores that they wanted (The Globe and Mall, 2017).
The company worked on the assumption that the name Target will be enough to sell their product and services to the new market. Additionally, the customers have different purchasing behaviors to that of their customers in Canada. Moreover, they failed to include the suppliers and the distributors in their Canadian expansion plan (Penny, 2015).
In project communication management the focus is often concentrated on a seamless information flow between all the parties involved in running the project. The first process starts with them establishing the channels of communication to ensure that all the members involved in the project can relay their concerns. The response structure involved in the communication process should be decentralized to enable faster decision making (Heagney, 2016, p. 36).
Communication plays a role in integrating all the aspects of the project and ensures that in the case a problem is detected in one sector of the project, there is a prompt response. The medium of communications and response to situations is identified. A streamlined communication in all instances leads to the success of the project as all the members involved are reading from the same script (Heagney, 2016, p. 36).
Taking this into consideration, the Target Company expansion project plan in Canada there was a limited communication that hampered its success. There was a communication breakdown between the suppliers, distributors and the retail store operates. This caused most of the store shelves to lack most of the commodities (Sorensen, 2015).
Additionally, the communication between the management in the USA and the people set up to handle the operations in Canada was clouded with a lot of lies. The reports that the USA Target team received showed that the stores were performing at a slow pace and everything was going according to plan. The time when the management came to investigate they found a deplorable situation in most of their stores. The aspect forced them to close their stores a clear sign that the project was a big failure for the retail store (Sorensen, 2015).
Project risk management refers to all the processes that are involved in the identification, analysis, and control of risk. It involves concentration on increasing the positive results of the project while reducing the negative effects. The process involved in risk management entails risk identification, risk quantification, risk response development and risk response control (Pritchard & PMP 2014).
The process of risk identification focuses on the determination of the risks that have a higher chance of affecting the project (Pritchard & PMP, 2014). Target Company focussed on the superficial risk aspects that were going to affect the launch of their retail store in Canada. They analyzed the competition in Canada and to outwit Wal-Mart retail store they believed purchasing a known company will give them some head start, but this was not the case as the project failed (Span, 2015).
A risk development plan refers to the steps that have been created to manage threats when they occur. It does focus on the avoidance, acceptance, and mitigation (Moran, 2015, p. 18). There is a high possibility that the company lacked a risk response development plan. The reason for stating this arises from the fact that when they started incurring difficulties in; filling their stores, expanding the spaces, and offering the products at affordable prices like their retail stores in the USA they decided to throw the towel (Shaw, 2015).
The last step in the risk management plan is the risk response control. The risk response entails the execution of ways to manage the risk process. When it comes to controlling risk the first step that the company should have taken is to reduce the number of stores (Schwalbe, 2015, p.23). The 122 stores were unmanageable and did play a major role in the failure of the project.
In conclusion, for a project to be successful all the concepts of project management have to be taken into consideration. As discussed in the essay the failure of the project was due to lack of a risk management plan, communication process, and non-involvement of the stakeholders. Target Company failed to carry out a detailed project control when they launched their operations in Canada.
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