Why America’s Retailers Like Target Fail Abroad | CNBC Marathon
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- Опубликовано: 28 апр 2024
- From Target and McDonald’s to Harley-Davidson, CNBC Marathon explores why some U.S. retailers struggle to make it abroad.
Target’s first and only foray into international markets happened in 2013 in Canada. The retailer opened a total of 133 stores in just over a year. But the expansion didn’t go as planned. By April 2015, Target withdrew from the North American neighbor and closed all locations. Poor real estate decisions, weak leadership, and major SAP systems errors contributed to the company failing in Canada. Target lost $4.1 billion in after-tax losses in just one year as a result of the fallout. The company has no plans to expand internationally anytime soon.
McDonald’s is synonymous with fast-food in many parts of the world, but there is one country where it’s failed to capture national attention. Iceland celebrated the fast-food chain when it entered in 1993, but a global economic collapse during the next 15 years forced McDonald’s to exit the Nordic region.
And Harley-Davidson may be the biggest name in American motorcycles, but the U.S. market is aging and shrinking. India and southeast Asia, with massive and growing markets, offered Harley-Davidson hope. But the legendary maker of big iron ‘hogs’ faces fierce competition in India. In order to succeed, Harley will need to make smaller and cheaper bikes that its most loyal fans might not recognize.
Chapters:
00:00 - Introduction
00:33 - Why Target Failed In Canada (Published September 2022)
12:47 - Why McDonald’s Failed in Iceland (Published February 2019)
20:24 - Why Harley Davidson is struggling in India (Published May 2019)
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Why America’s Retailers Like Target Fail Abroad | CNBC Marathon
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The biggest single mistake retailers make is in believing consumers outside the US want to be just like us. They don't.
With a passion they don’t.
💯 %
The biggest single mistake people make is believing that Target is anything but fancy looking trash.
Edit: Speaking as someone from the USA and a former Target employee.
It’s not true. Many people around the world love American values and find American stuff appealing.
Real answer is American bosses are incompetent and lazy unable to do anything difficult but good at abusing their employees.
McDonald's left Russia because of politics...US companies like Target are paying a price for engaging in politics
Here in Germany, Walmart was such a failure that they had to sell all their stores to a domestic competitor
That's what happens when a company that treats their employees poorly goes to a country with a strong pro-labor union culture.
I'm not surprised. Personally I'm actively hoping American businesses fail. They always forget the only reason they got so big was monopolies in America and not because the products they make are actually good. Now that American's spending behaviors are starting to crush monopolies (thanks Washington NOT), I hope they repeatedly fail around the world.
@@masond7573 Not only union culture, Walmart straight out broke German law.
@@Fry_tag yup, I read they were trying to regulate their employees love lifes
American stores seem so drab. Is this deliberate to make them seem economical?
Walmart in Germany was a colossal disaster and its insane mentality that the German experience of shopping is the same as the US's. There was stupid levels of arrogance with employment and trading laws.
The way they treated the employees was outrageous.
That's often the issue with American companies in general. They underestimate employment laws and how strictly they are adhered to in other countries.
@@ItsFriscoBaby One's gotta understand they're just not used to workers having rights.
@@JacobSprenger They're not and even though their local management know it's mandatory there is still pushback from the US offices.
Maternity leave and benefit always seems to be a huge issue
For Europeans, shopping is not something to be enjoyed, but something that has to be done.
I distinctly remember when Walmart came to Germany.
They had these super, I mean super large stores, but in the end, they had about the same priducts other retailers like Aldi had, just in larger quantities. By that, I don't mean that there was a larger selection, but that they literally filled entire aisles with just one product, by one brand, which led to a super deserted atmosphere, in addition to long walks and no overview.
In combination with significantly higher prices, I am not surprised at all that it didn't work out.
and why DRIVE to Walmart in the outskirts,
when you can walk to your Lidl, Aldi, Rewe or Edeka in your neighborhood
At the same time, Aldi (north and south) and Lidl were just laughing, given they were all in the US...
@@cayreet5992 funny enough, that ALDI allready had 300+ Shops running in Germany before Sam Walton started about thinking to open his first Walmart in the US
@@karstenbursak8083 Funnily enough there was one in a residential area near me. I still drove past it to the next big mall on the outskirts of town because the other one had multiple very different stores, better selection, smaller food portions (German singles don't eat like American families), and food that was more to my taste. The novelty of having twinkies available wore off pretty quick. Even now that the store belongs to a German chain I don't like it because it is hard to navigate the store (no or bad signage).
Main reason why they failed were labour laws and price politics. One thing i remembered was that they tried to forbid relationships between employees. They did not expect that in Germany the customers joined forces with unions and government to stop such behavior. Also unions in Germany work in a different way than in USA. They are mostly useful.
Also they tried to push away competitors by selling their stuff under purchasing price. This is forbidden by German law.
I wouldn't say that Starbucks has "failed" in Sweden, but they sure haven't done as well as expected or desired. A large part of the reason for this has to do with Swedish coffee culture and how it's very different from in the US. We have a LOT of domestic alternatives that cater to our tastes, which are a lot more into dark, rich coffee. I once read an article that said something along the lines of "Starbucks as a coffee business has failed in Sweden because they don't sell coffee, they sell liquid desserts".
They've mostly withdrawn from Sweden though, so I guess it's a fail. Their coffee sure is anyway 😀
Charbuck sell burned coffee, try roasting green beans at home, outdoors as the first roast is acrid. Once you get the skill you will know why charbacks is called charbucks. Bad coffee because it is over roasted, aka burned.
I can't fathom that Starbucks, such a large company, didn't do its research about Swedish culture before setting up shop.
I mean fika a staple of life for a Swede.
All they had to do is sell good coffee and desserts that work on a plate...
kinda same with mcdonalds in northern sweden, they cant really compete with MAX and BigBoy, so went bust in at least two cities i know of
@@kitsunekaze93 Because the northerners have some idiotic idea to eat hamburgers with a fork and knife, and rejected McDonalds for not providing those.
Truly ridiculous!
I live in the UK and used to work for a large American company. They simply made assumptions about everyone being the same as the US! I remember working on a major system due to be rolled out worldwide. They swanned in one morning and announced, as if it was perfectly OK, that there was a problem with currency handling and everyone would need to work in US dollars. This was pre-Euro and involved 60-70 different countries/currencies. We sat there open-mouthed with shock while they wondered what the problem was!
In fact they are right. Myth about "unique customers" depenfing geography is just a BS. Does not matter where people are same; they want to buy cheap. Some of them care about quality.
In this video we have confirmation what I talk about: they failed because of logistic, quality or high prices.
Not because "cultural" differences.
In country where I live amazon is not popular at all because... high prices. Local marketplace offers lower prices and same range of products.
That isn't as inherently American as much as it is inherently a "management-ism". Imo.
@@podunkman2709 Walmart failed in UK because of cultural differences, they had literally no logistics, quality or price issues in the UK, it was PURELY cultural. They brought a chain called Asda and basically ignored the habits and preferences of UK shoppers, so UK shoppers went to other stores, the video is done from a US perspective and makes the mistakes many US chains make in other countries which is assuming they are the same. UK shoppers are quiet happy to go shopping multiple times a week with smaller shops in convenient sized stores because a lot more people in the UK walk and prefer to walk compared to those in the US where near everybody drives everywhere and a single store serving a whole town works, that doesn't work in the UK.
I personally walk to multiple shops in range, I have butchers, a bakery, multiple convenience stores including a post office, and other types of shops too and I live near the suburbs. The make-up of UK towns and villages is just very different to the US. Of course we also do not call convenience stores convenience stores, we'd call them corner stores, post offices, etc. In Walmart's defence, they did also try to get into convenience stores but didn't understand why the UK has them and they just didn't appeal to UK shoppers either, none of those opened near me so I never got to see just how bad those were. Walmart success in Canada is due to Canada being much more like the US then anything in Europe or Asia, very large towns and cities with huge suburbs and everybody reliant on cars to get around.
After years of slowly bleeding Asda to death, they sold a 90% share of it before it collapsed completely and the new majority owners were able to turn it around in only a couple of years by adjusting the chain to meet UK shopper expectations. There was no major shift in quality, no fixing of logistics or changes in pricing, it was purely cultural. Also to note, Asda was already a successful chain before Walmart brought them, it was changes made by Walmart trying to force US ideas on the UK that caused it to bleed customers and profits.
Many US brands which do succeed outside of the US succeed usually because they have regional management that adapt the chain to meet cultural needs, look at McDonalds and then look at their international menus, they vary so much it's insane. What you'd get in a McDonalds in South-East Asia is barely anything like you'd get in the middle-east and what you get in the middle-east is nothing like you'd get in the US and in the US, you don't get beers in McDonalds like you would in Germany. Vast parts of the entire menu are swapped. Some of the flagship menu items like the burgers might still be available but not in India where they use Chicken and not Beef. To be a truly international company, the company does most definitely need to cater to local culture. So McDonalds failure in Iceland really was different to most US chains that enter foreign markets, like Walmart, Target and others.
@@podunkman2709 You're simplifying it. Consumers also want completely different products and have different shopping habits. The UK store Tesco failed in the USA because it thrives on smaller stores that people use on the way home from work to buy 2 day groceries (rather than a week's shop). There are so many different habits even just in Europe! Bulk purchasing, shop location, shopping frequency, loyalty schemes, convenience, product type are all different across the globe.
@@podunkman2709This video (in part) as well as facts prove you wrong. Companies like McDonald's for instance, spend millions in studying costumers behaviour and adapting their offers to local markets yet it's not always a success because despite the alleged basic similarities (buying cheap etc.) there are indeed cultural differences and other stuff influencing business...if it was that simple, all brands would be successful everywhere...
I think Harley-Davidson's problem is the style of bikes they make.
Harley-Davidson's are designed for going in a straight line, just cruising from one US city to the next city without ever going around a corner. The geometry of their bikes reflects this, if you took a Harley-Davidson onto a motor racing circuit which has corners then it would fail.
In India when you drive on an Indian road anything can happen, perhaps there is a massive hole in the road that you need to suddenly avoid, or perhaps someone almost kills you by driving at you. But you will need a bike that is responsive and can suddenly turn very quickly, ready for any surprises either that or you died in a road traffic accident.
If you look at the geometry of all the bikes that were selling well in India they were all very upright and would be far more responsive if you need to suddenly turn.
I think Harley-Davidson should try making a bike that is designed for corners, maybe not a motor-racing circuit but at least something you can drive on a Alpine road with all the hairpin bends that the Alps can possibly throw at you, that might do better in the Indian market.
That's why they ride superbikes in India. Ahahah. /s
Harley's problem is being hostage to their past.. They produce 40's bikes with some refreshed materials, which vibrate themselves into pieces. Big engines with low horsepower (another american thing.. Bigvdisplacement, low bhp, comparing to other manufacturers).
Harlwy Davidson could make more profit as a clothing brand.
Also if HD makes anything different, their public (rich, 50 y.o.) will lynch them.
Wich gives another HD problem: HD's are expensive and outdated.. And their public is dying. They lost the development-racing.
I understand exactly what you're saying just by playing grand theft auto.
It's so bad, HD's public and also their very motorbikes themselves made me averse of Motorbikes ever since I encountered those, tainted the entire category for me, even creating the association to Crime in my head.
Almost like getting turned off cycling for the daily errands by the Tour de France Cyclists or being turned off from driving by the circumstance of Motorists generally being the #1 Child Killers in most of the world.
Indian Bikes like Royal Enfield have managed to raise my Interest though.
The fact that India has a very young population for whom a motorcycle is first and foremost a means of transportation cheaper than a car, is also an issue. Harley Davidson famously specialises in mid-life crisis mobiles for suburban dads.
Walmart didn’t start from the scratch, in Germany. They bought the Wertkauf stores which existed very successfully over decades. Walmart ignored the local market structure and its culture completely. I happened to witness this kind of behavior by American business people several times in my professional life. Aldi or Lidl for example approached the local markets all over the world in a much smarter way.
Aldi actually made the same mistake in Denmark and are closing their stores now as well. That said, I can see why a German company wouldn't be aware that going a few kilometres north of their normal markets would require a significant cultural change in operations.
I think Lidl and Aldi both have stores in the US and thrive there. Seems the strategy they made in Germany (like a smaller store, store brands to cheaper prices, repacked stuff so the staff don't have to do that, and more lively atmosphere) is appreciated by a lot of Americans
it's basically the same story in the UK with Asda, it just was a much slower bleed out, since they kept the Asda name and that name had some brand loyalty from customers but time slowly eroded that since they still tried to push American ideas on it, which didn't work.
@@Tomlar147it's mostly price. Aldi is dirt cheap due to private labels and limited choice.
Tell this to Lidl in Norway
The best part about visiting another country is not finding the same $hit you can get in the U.S. It's about experiencing local culture and food etc...
I realy dont undrestand what people find in mac Donalds. Im European and we had multiple macdonalds restos here. At first they Burgers are more expensive, no tasty at all and they are like dry sandwitch. Same time there is realy small Fastfood place in my country they have 8 shops in 3 citys Big Burger with 2 pihvs and cheese, and salat and alot of sauce is 3.30 dollar. Sammler version of that is 2.5. Samller version is bigger than Macdonalds double cheese burger.
@@asjaosaline5987 When McDo came at my town in Canada, in ~70's, I was going there because service was "fast" and quite cheap. Taste was not an issue and it is not that bad. Now, service is slow because they offer too many products, it's expensive as I can go to a local restaurant to get a good meal with service at the same price of a BigMac.
@@asjaosaline5987I agree, McDonald’s and stuff is not really worth it when I can get tapas or a nice bocadillo for less price..Europeans mostly go for kebabs if they want something fast
American retailers tend to think that they can be successful stepping into a foreign market while keeping up their obnoxious corporate culture, tacky and intrusive sales approach along with the same exploitative staffing practices as they get away with at home. In the UK as an example, people like to be given their own space. Being constantly approached by sales staff is both intrusive and irritating to us. The whole idea of having someone who's main job is to meet and greet people at the front of the store is something we find tacky and uncomfortable. Finally the 'have a nice day' and 'southern hospitality' approach comes over as insincere to us as well, American firms just seem to lack the ability to let people approach their roles naturally. Due to a combination of these factors consumers from the UK would generally try one of these stores once and never come back again while telling their friends and family to stay away from them.
Yet there are plenty of successful US companies in the UK - McDonald's, KFC, Starbucks and also that massive cash and carry place whose name I've forgotten.
@@capitalb5889and all of those you just mentioned are fast food places where people go to eat, not buy groceries and stuff.
The interaction with staff and the product it's pretty minimal besides the eating part.
My comment has Nothing to do with uk stores but about uk housing. UK Homes look like they are stuck in the 1930s. absolutely hideous semi-detatched/detached/ apartments and houses. Terribly gloomy and overall hideous to look at. The uk is so awful in so many aspects that i dont even know where to begin adressing it. Considering how much resources the uk have stolen from every damn country around the globe this is not how the country should be running. Your royals are covered head to toe in jewels while the rest of the people are covered in crumbs so to speak.
@@capitalb5889 McDonald's sure, KFC and Starbucks have been in decline in the UK for years and still failing. They got into the UK during the height of American culture, before the Internet, before people saw America as America, instead of the ideal version of America pushed by Hollywood and advertisements. Most American fast food chains are failing in the UK these days, the number doing well, you could probably count on one hand, McDonald's, Dominos, Five Guys and... erm struggling to think of any now... those failing, much easier, You have Burger King, KFC, Pizza Hut, Starbucks, Subway,
Outside of fast food, there isn't really a strong American presence. Many US Chain Fastfood restaurants also are rarely found outside of London or large city centers, again it'll be McDonalds, Dominoes, Burger King, Subway, KFC and maybe Five Guys you'll mostly find outside of London or large cities... so most chains are only in places with lots of Tourists and foreigners on business trips, looking for familiar foods. Personally I've never seen a Wendy's, a Popeye's, a Shake Shack, etc in the UK even tho they do have restaurants in London.
In most towns and villages... yea, you can go down your local high street and not see a single American shop or chain outside of the fast food which will be something like a McDonalds or Burger King.
@@capitalb5889Costco?
Probably the biggest blunder in Canadian retail history was that of Target. They could have succeeded here too if they wouldn't have rushed things meanwhile their inventory system didn't even work in the country.
Also their prices weren’t as good as Walmart. Thought it would be the same or lower prices than Walmart but it wasn’t.
Their inventory was trash. I worked there in the electronics dept, I had to tell customers that we dont have this in stock lol and i would just tell them go to best buy instead.
@@Dontworry1 I thought the whole point of target was to be a more upscale walmart
@@aakksshhaayy Exactly. A different crowd. Better environment. Better stuff. Just not the cheap china basic needs as much. Cheaper then the monopoly Walmart has?! They literally tell manufacturers what they will pay for their products or they will go out of business or shrink massively. They are required to have an office by corporate. Thousands of them in Bent.
@@441meatloafI don’t know about the electronics but a lot of the clothing and home goods seemed to be leftover Zellers products. If we didn’t buy it when Zellers was closing, we certainly didn’t want it from Target.
For those wondering, Target Australia isn't Target. They just got permission to use similar branding a long time ago but besides that the two retailers have never been part of the same company.
I was wondering about that. Target is Australia is more aimed at clothing, home wares, outdoor furniture, things like that. Target in the US is more about groceries.
Just like most Exxon gas stations for 2 decades now. They just pay for the bran name.
Ah.. makes sense. I thought Target in Australia is going OK
Target Australia has evolved from the original 1920's business based in Victoria Australia. The Target name has been in use since the 1960's.
funnily enough the majority of Target Australia stores were ultimately rebranded to Kmarts. there's only a few Target's left.
Target also failed to do their market research and didn’t realize their primary competition wasn’t Walmart but Canadian tire. I worked at Target at the time and their logistics was complicated by the fact that their merchandise had a different coding system than the American stores.
Manipulation method:
You have to make people who are against something demonizing it to see it as Nazis (nazification) and create a principle that summarizes everything you think then propose that same principle as the solution to that thing that you presented as the same devil then continually be attacking an ideology to present your principle that summarizes your ideology as salvation until everyone is convinced of you.
Their logistics was also complicated by untested software from an Israeli company that had no connection to the US systems. As well the incentive system for warehouse staff rewarded them for keeping the warehouse full and gaming the entire system (Which they did by holding stock as long as possible, misdirecting it, placing it in the wrong place in the warehouse and filling trucks and not releasing the stock I the warehouse, then leaving the trucks in the arrival lot for days, or marking it sent when it was in the warehouse resulting in the pallet being double counted as being two places at once).
This video didn’t even bother naming Canadian Tire or any Canadian retailers besides Giant Tiger. They named American origin retailers. The arrogance continues.
@@j2174ignorance, not arrogance
@@ivok9846 Ignorance and arrogance.
I once went to a Skechers shoe store here in Finland. It was a very strange experience. Greeters, or whatever they're called, aren't a thing in Finnish stores. Also, for some reason, the salesperson insisted on tying my shoelaces for me. I can do that myself. Their selection of shoes was also a poor fit to the Finnish climate. Suffice to say I didn't buy anything from them.
Yes I’m British and I went shopping in a u.s store for a shirt and was jumped on as soon as u came through the door wanting to know everything he even tried selling me a belt that he said would look good with the shirt I liked it’s all very strange I just want to shop in peace
I'm Polish and every time I have to go to Sephora I need half a day to prepare myself mentally to all their sales personel shadowing my every move in there...
I buy shoes in the US and no one even gets the shoes for me, I try on what I want from the stacks. You are talking very old shoe store ideas in US.
@@MrTangolizard yes, in the UK we definitely don't like greeters and we certainly don't want other people packing our bags, heck we usually prefer it when we don't get a smile from the cashier since it just feels fake to us and we don't like fake smiles either but you get those everywhere in the US and apparently people in the US are incapable of packing their own bags, so trust some low wage employee to do it for them... VERY VERY different. Apparently the whole shopping bagger thing is starting to go into decline in the US... stores probably realised that hiring dedicated baggers really didn't bring them any real return, is my guess.
@@DoomsdayR3sistance yes it’s a strange thing to have someone pack your bag for you I’m capable of doing it myself but I guess that’s there way and as they say when in Rome
Any company will have to comply with local employment laws. Walmart didn’t do their homework on this and failed in Germany and the U.K. (and possibly others). I’m guessing German employment regulations are similar to that in the U.K., so everything from holidays (vacations), maternity/paternity leave, minimum wage, working week hours caps and of course health care contributions through corporate taxes to name but a few will have had an impact. Additionally finding sources outside the US to supply product to European markets might also have caused unanticipated problems (many US grocery products don’t meet European legal requirements due to chemical additives, growth hormones, processing techniques, sugar content, added water and saline etc).
Thank God they didnt make it here!
@@Marge719If by here you mean the U.K., they did. They bought out ASDA many years ago and despite having thrown billions at it couldn’t compete successfully in the U.K. market and sold the business fairly recently.
The warehouse "experience" should have ALL Walmart employees who do retail HAVE to do warehouse for five months. Then you know what a slave goes through. If you live.
Yes, conditions are even harder in Germany than in the motherland of liberalism.
Big box stores excel at ONE thing, having the largest store possible while not stocking a single thing I'm looking for. Its really amazing how well they do at this as though it was done by design.
I suspect IKEA does not have this problem.
@@OLDMANTEA They do. They just force you to walk past endless exhibits of ugly overprices furniture to desensitize you so you will buy the first marginally acceptable product they have on sale, and make you think you made a bargain.
That's a general problem today that stores does not have what you are looking for - and then they cry that you order in the internet.
@@Carewolf I have to disagree a bit. The type and quality of IKEA offerings are well known and they have a fairly generous exchange and return policy for their products. IKEA also scores highly on customer satisfaction surveys. Many of their customers go to their stores already knowing what they will or intend to purchase.
@@OLDMANTEA Then why is their stores considered the worst, again by customer satisfaction? And why are their stores specifically designed to avoid you being able to get to where you want to go?
Target failed on logistics. They couldn’t stock their shelves. McDonalds did the same in Iceland. The cost to import from Germany instead of trying local products made them unprofitable. The one size fits all doesn’t work from the logistics and cost standpoint. Thinking outside the box has to be part of any company’s expansion efforts. If you can’t nail down your logistics out of country, you’re screwed. No amount of marketing/advertising can change that fact.
Exactly. There is a reason some Canadian chains are only Western Canada or Central/Eastern Canada based because of shipping logistics.
just in time inventory system is trash
@@sp123 depends on what products. perishable products > unsuitable. unperishable and car parts as in toyota> workable.
@@sp123 It works only if you have the supply logistics nearby. Short supply lines and local suppliers make it possible. You can do it, but it has to have short supply lines and storage locally. Otherwise, you’re betting upon your suppliers to output 100% provide for production. Probably not a good bet or assumption.
@@shasanmaz it seems to me that if you want to offer fresh produce , jit supply is necessary. !
I would think that if Target can operate and maintain a supply chain in Montana and North Dakota it should be able to do Alberta and Manitoba !
Setting up a jit supply chain from scratch (in another country) may be difficult though ..
In India, brands like BMW and Triumph are thriving and selling high-priced bikes. However, Harley Davidson fails to resonate with Indians. It's hard to picture anyone riding a Harley in scorching 43-degree Celsius weather.
The south Park Episode "The F Word" S13-E12 perfectly sums up the image of the Harley Rider (Not all).
HD needs a low cost scooter for the Indian market.
Tbf Harley Davidson's "patriotic macho" brand image will fail everywhere except US and Canada.
Not only is Harley Davidson relying too much on its American-ess, foolishly believing that everyone wants to look and feel like an American. But they also fail to attract a young demographic. How many men in their 20s aspire to have a Harley Davidson? Very few. It's the Boomers that love the brand, millenials and gen z are not interested.
The image of Harley Davidson is so American. Americans think this leather and bandana look is cool and macho, but other countries might see it as goofy and corny. They would get laughed at if they went out looking like that. 🤷♂
@@devilselbow Harley was affiliated with the army and air force folks
and the hells angels ⚡
Here in the UK, we often see American businesses as coming over and destroying our home grown and much loved brands. In order to succeed, they often have to almost hide the fact that they're an American business. Asda, for example, is owned by Walmart. But I believe it's 3rd place in market share, behind Tesco and Sainsbury's.
Starbucks is also second to Costa in the coffee shop market.
Some years ago, there was a huge public outcry when Kraft foods did a hostile takeover of Cadbury's chocolate. It brute forced its way through using every trick it could, made promises about keeping factories open in the UK (and promptly shut them anyway) and was the archetype of why we hate US businesses. The board actively tried to fight the takeover but lost out in the end anyway. I think some law changes were put in place as a direct result of the move because it was hated so.
Walmart sold ASDA a few years ago.
@@paulqueripel3493 did they? Didn't know that
@@himaro101 just looked it up, Walmart still have a minority stake and a seat on the board.
Jan 2021
Yeah, New Zealand had a similar response to Cadbury Chocolate being bought out, it went from THE Chocolate brand in the country, to what you buy if there is literally nothing else on the shelves. Even Nestle, who are actively Evil, is preferred.
Asda isn't owned by Walmart anymore and hasn't been for 2 years
I remember whe had a walmart here in germany some years ago. it was just a weird place to be and seeing all the creepy stuff the employess were forced to do.
I'm curious what you considered creepy stuff?
@@AB-wf8ek Smiling for no reason. Walmart told it's German employees to greet customers with a smile. Smiling for no reason is not a common thing in many European countries. Instead of coming off as friendly, people mistook the employees' smiles as attempted flirting, something that is creepy when it is unwanted and repeated with every run in with Walmart employees. There are more reasons for Walmart's failure in Germany but failure to adapt to the culture were the main reasons. One of my college courses reviewed a whole case study into Walmart's overseas failures.
@@AB-wf8ek The greeters, employees are expected to spy on co-workers, cashiers were expected to smile at costumers (which they experienced as flirty)
But IMHO the biggest problem was simply their locations, big stores in the middle of nowhere, where you need a car and time to get there. That might be normal in the US, but here I have 4 grocery stores within 10 minutes walking distance - why should I drive to some remote location? 🤷♂
And the quality of many of the goods in the Walmarts here in Germany was much inferior than the same brand products sold in America. Like Levi's for example.
The Walmart cheer. I refuse to do. Thankfully, that's mostly died out.
Alot of countries don't let American companies come to theirs because they see how ruthless companies are towards their own employees. It's about ethics and morals. Americans don't prioritize that even a little bit
I agree with you on that
What?! We run on regulation, you don’t have any.
@@ozzy_ruiz educate yourself. Lots of countries refuse to let American companies operate in their countries. Even when they did, American companies have been kicked out because of the public hating how they treat workers. American corporations would rarely leave America these days because regulation in other countries is too strict in their eyes. The reality is it's just basic respect stuff
This is something you want to believe, but is absolute NONSENSE. Most American companies thrive outside the US, so what is explanation for that success? Those companies treat their workers better? Most consumers would not put that in their top five reasons as to why things don't always work out.
Additionally, this is such a broad and stupid (and I would suspect, European) generalization. Not all companies operate the same. Not to mention companies operate according to the laws of the jurisdictions where they operate. So naturally, a McDonalds in Denmark is going to be run differently from one in Colombia.
It's not about "letting" them come, it's that they can't operate at a profit while following safety standards for food and workplace environments, or at least not enough of a profit to go for it.
If you rush into a community guns and blazing, don’t understand the needs of the community, and not give that community a reason to buy items from you, you’re going to fail big time.
Canadian Hudson's Bay department stores failed epically when they wanted to open 20 stores here in The Netherlands. They didn't have a clue what they were doing.
I visited a Target store in Ontario Canada on Christmas Eve aftrenoon to do my last minute shopping for gifts. I was expecting to be in a store full of desperate people filling thier shopping carts with all sorts of items. As it turns out there were only a handful of customers and staff standing around doing nothing.
I knew then that Target Canada was doomed to fail.
This video forgets to add that a lot of nations will "rally around the flag", as in, they will opt to support local, independent retailers once a big international chain opens as they don't want to lose local businesses. That's one of the reasons why Starbucks failed so spectacularly in Australia. Australia has a very developed bistro culture which is mostly comprised of independent, one-off cafes. The thought of losing something so ingrained in the national conscious to an enormous international player really spurred a movement to support existing local retailers. Of course, there are other reasons behind Starbucks' failure in the Australian market, but it appears that these videos fail to raise this point. Sometimes the locals just really want to protect something from being decimated by monolithic multinationals.
Plus, Starbucks coffee tastes like crap and in Australia it doesn't matter how cheap or gimmicky it is, crap coffee is crap coffee and won't last long💜
Charbucks fails due to bad coffee. I roast green beans at home. I can take any coffee bean, cook twice as long and it is ruined but tastes like Charbucks. My brother loves the stuff the day before he visits i over roast and ruin a half pound and he is delighted at the taste.
Pretty much
Similarly for New Zealand, in that there area few, but mainly in tourist towns where people from Overseas can get their Starbucks, as most locals go to a local cafe where the coffee is actually good.
@@Scuzzlebutt142 Oz too.
Hudson's Bay, a huge Canadian retailer, came to the Netherlands and though they could transplant their business model directly. This turned out to be a mistake, a 184 million euro mistake. Hudson's Bay, Signa (an Austrian investment firm) and the owners of the existing stores invested a total of 516 million in this venture.
After 3 years of struggling, they closed the 15 locations. The CEO admitted that they did not do any research, didn't look into their location and were very much over-confident. They had a massive store built for them in the city center of Amsterdam, across the square from De Bijenkorf (The Beehive). This is a Dutch version of Hudson's Bay and is a staple of the Dutch retail industry. Dutch people are very adverse to change, so very few people chose to shop at Hudson's Bay instead of De Bijenkorf. This location was supposed to be their crowning jewel, but became the mill-stone around their necks as we say in Dutch.
Too many companies think their business model will be a success everywhere but they don't realise how different cultures do their shopping. Both for groceries and retail.
Hudsons Bay is NOT owned by Canada, for a long time now Usa corp bought it and wrecked it, just like they did tim hortons
All true except that we are adverse to change, we are actually one of the easiest countries to test new products in and are often used for that as well.
@@malloott No, we're not the easiest, we're the hardest. If it works in the Netherlands, it is likely to work elsewhere. If you know you can climb the highest mountain, the smaller ones aren't a big issue.
Hudson’s Bay is failing in Canada as well. They’re struggling to remain relevant and the most valuable asset they have is real state and some value left on the brand.
@@alarriag1 Same happened to a more budget version of Hudson's Bay and De Bijenkorf: V&D. A staple of the retail world in the Netherlands, but that also killed them as they refused to change, thought they determined what the market did but once they realised what was going on, it was too late.
Hubris and arrogance are bad motivators.
As someone that worked at Target Canada corporate, I can say that the office environment was extremely toxic. The managers they hired were absolute narcissistic psychopaths. It was the most awful experience I have ever been through.
did you get sexually harassed
@@MikaelFresco Let's just say it was just the run-of-the-mill scapegoating and power trips.
So, typical US managers.
Always keep in mind that the US has laws that forces corporations to favour local businesses over foreign ones.
This means that they have to invest in local US based stores more than foreign ones irrelevant of which stores needs investing in.
It means that they must cut resources and personnel in foreign stores first, even if those stores fall in the red because of those cuts.
Also, management treating foreign stores employees as complete garbage is standard US management model.
If you work for a business that is bough by US investors, you have 3 years before it goes bankrupt. Anything of value will be move to the “new” US based office first. The rest will be bled for money then disposed of.
I had the same experience working for a big American corporation here in Ireland. Only the true psychopaths or those with little-to-no moral compass made it past team leader and up to manager. Horrible working environment and the harassment I received while pregnant and too ill to work was atrocious and caused me to end up in hospital with high blood pressure due solely to the stress they caused (even though I was legitimately signed off by my hospital which is all that is needed by the labour laws here) funny enough, after months of threats and registered letters demanding I go against my doctor's orders(in so many words they aren't that stupid as to spell it out), they suddenly never sent another letter or made another phone call after I ended up in hospital.
Awful corporate philosophy and horrible managers
@@lellyt2372 I am so sorry to hear about your experience. The only thing I can really say is I hope there is karma and they get what they deserve. I hope you're in a better place now. :)
In countries like in Europe, the dominance of large franchise businesses facing competition from small businesses is common. This is mainly because the concentration of people and economic activity in urban areas creates a favorable environment for small businesses to thrive and compete against larger franchises.
This is exactly why Burger King failed in Slovakia, left for a couple of years, and then came back again. They should have done their research the first time lol
Europe isn't a country but I agree with your assessment.
Today I learned that Europe is a country..
And then americans go "why can't we do things outside our smart-land?!"
@@sirsancti5504 i lold but funny enough hes not wrong
@@sirsancti5504 "countries like in europe" = countries like in [those] in Europe. They didn't say Europe was a country.
Walmart succeeded in Canada, but failed in: Argentina, Brazil, Germany, Japan, Korea, UK.....
but canada right across the US border so stupid to fail anyways
Walmart never opened in the UK.
Not just Americans. An Australian hardware firm Bunnings took over Homebase, formerly part of the Sainsbury’s supermarket chain, in 2016. First, they changed the name to Bunnings, discarding decades of brand recognition. Next, they threw out all the things that people liked about Homebase, such as bathroom designs, and replaced then with their own crap, very basic stuff. Eventually it all failed, and in 2018 they sold it to another company for a symbolic one pound. It’s now profitable again.
@Joana-il2ur: Yes indeed. They sold it back for a symbolic £1 to the former owners of Homebase who promptly renamed the stores back to Homebase.
Bunnings completely misunderstood the British market, not only did they discard popular Homebase items they brought, in for example , very exotic BBQ equipment at outlandish prices which may be popular in Australia but given the UK climate were unlikely to be used very frequently by the average shopper. Mundane things like packets of screws were made in Australia and imported all the way to the UK. Can't imagine how much that cost!
The original plan was to not change anything for a while and then try a store or two based on the Australian concept and tweak it. The new local Bunnings Management ignored that, fired everyone and went full on Bunnings rebrand. The Westfarmers CEO has clearly said the original plan wasn't followed.
@@hoofie2002: In that case it doesn't say much for the Westfarmers management if they can't control the local management of the Company. Sadly they deserved to fail!
I loved Bunnings and thought Homebase was awful. I liked that it was a hardware shop with lots of tools and not a home decorating place. Plus it had a play area that my daughter still remembers. Pity but I suppose I'm a colonial so my view of what I want is similar to the Australians.
@@timmurphy5541 But it was a home decorating place, and we have plenty of tool shops already. They already had Screwfix. Bunnings failed to understand their market, it seems.
McDonald's did an amazing job in France. They widened the offer with products important to the French : better bread, french cheese, local meat, fruits and vegetables in the happy meal, many choices of burger alternatives (salads, wraps, etc). They reduces the quantities (the larger size is between a small and a medium in the US and the drinks are not refillable). When I went to the US, i was shocked by the lack of choice, the poor quality of food and the amont of fond served.
I don't like McDonald's but I must admit that they did a great job to understand the french market. France is their first market outside the US.
Nobody want a 500 sq miles armory with a concrete valley next to it, vote for small shops and more parks
American business model doesn’t always work overseas. McDonalds has a completely different menu in Greece and China. You can’t base sales of undergarments in a big box store in some markets because no one has the square footage to take it all home.
In Portugal, they replicated (poorly, but still) some local sandwiches. In Spain, they also have "local" stuff in the menu.
I think they do that across all (or the majority) of Europe's countries.
The ones in Japan seem interesting.
@@sirsancti5504 yes there is only 6 products or so, which are the same in every mcdonalds.
In France they directly serve you, there’s multiple unique burgers and even a type of burger called signature, they are more expensive but also bigger and with better products, also the buildings are black and green, with no trace of red
McDonald's also has a hamburger with dark rye bread in Finland.
Interestingly enough Burger King seems to have more interesting special offers in Singapore, but hamburgers are clearly smaller than those sold in Finland; last time I visited my perception was that the biggest hamburgers (with same amount of patties, that is) were smaller there than smallest in Finland. Then again, it's well known that meat is very expensive in Singapore. (I must wonder why I eat in Burger King in such a city, but sometimes convenience and hunger just take over.)
The biggest tragedy of the failed Target launch in Canada was the loss of Zellers. The 2 Zellers in my area were always busy.
Target tried to expand far, far too fast in Canada. Should have opened perhaps a couple dozen through Canada's major cities and iron out the bugs before to the mid-sized cities and smaller towns.
My favorite will always be when Walmart tried to get into Germany and lost over a billion before tucking its tail between its legs and getting the hell out of dodge. They found out that while their business practices are just considered disgusting in the US, in Germany they were actually illegal! 🤣
We don't need all US retailers. We have our own.
If Target could've simply recreated their US stores in Canada - including relative prices and selection - they would've been a great success here. The disaster was organizational, not conceptual. NEVER open a store until it's the _full_ expression of what you can offer the consumer.
Masters Hardware stores failed here in Australia partly due to wrong products, wrong time, Masters partnered with Lowe’s Companies Inc. (based in the United States) in a joint venture. Lowes didn't understand that when it's summer in the US it's winter in Australia, so products were out of season in the Australian market and they failed to understand the seasonality inherent in hardware products, eg no-one buys lawn mowers in the depths of winter.
Plus their locations were very wrong. A lot of stores were right next to or across the road from Bunnings that the public felt very comfortable with and the Masters store were very sterile in the vast blue and white layout.
Starbucks also failed spectacularly in Australia. There was a rapid roll out of stores, but they failed to take account of local coffee culture (Australians are coffee snobs and the Starbucks product was not up to their standards). After a couple of years of empty shops, 80% were closed, the only ones remaining were in areas visited by overseas tourists.
Masters also had some issues with some of the products they stocked. Such as large gun safes - very much a niche product here in Australia without the US gun culture, more so stocking them in stores in suburban Melbourne. A rural/regional area I can understand given a lot of rural folk here will keep rifles, but not so much in the cities. They also had a section devoted to selling large bulk packs of washing detergent. Not the sort of thing that people here would buy at a hardware store, and people here don't buy massive bulk packs of detergent as laundries in most Aussie homes wouldn't have the space to store them properly. Given Woolworths was the JV partner with Lowes, you would have thought that the questionable product & ranging choices would have been nipped in the bud in the planning stage. A pity as their service was much better than Bunnings at the time. Nearly all the large Aussie retailers now vary their product ranges depending on store location. Even to the extent of stores in the same city. A store located in a wealthy inner-city suburb will have a different offering from an outer-suburban store, and a store in a rural town might have a different offering again.
Not enough Roo-chow is my guess?
@@terrygerhart1485 cute 😄🇦🇺
Talking about McDonald’s and a Scandinavian country I still think it is interesting how Denmark forced McDonald’s to unionise, because against conmen belief we have very loose laws with unionising and you are not forced to do so as a company, but our trade unions very much want you to do so because they want people to be paid fairly for certain, so when McDonald’s refused to unionise for over a year the hotels and restaurants union simply just asked the other unions to go on strike with McDonald’s, now that meant that suddenly McDonald’s could not get anything, because ever business was in a union and by extend got told not to deal with them or their workers would go on strikes, after that McDonald’s was very happy to sit and talk with the hotels and restaurants union, ah yes how the power of “you can do that but we won’t work with you” can cripple a greedy company real fast.
“Dockworkers refused to unload containers that had McDonalds equipment in them. Printers refused to supply printed materials to the stores, such as menus and cups. Construction workers refused to build McDonalds stores and even stopped construction on a store that was already in progress but not yet complete. The typographers union refused to place McDonalds advertisements in publications, which eliminated the company’s print advertisement presence. Truckers refused to deliver food and beer to McDonalds. Food and beverage workers that worked at facilities that prepared food for the stores refused to work on McDonalds products.”
“Once the sympathy strikes got going, McDonalds folded pretty quickly and decided to start following the hotel and restaurant agreement in 1989.
This is why McDonalds workers in Denmark are paid $22 per hour.”
-Naked Capitalism
www.nakedcapitalism.com/2021/09/when-mcdonalds-came-to-denmark.html
I worked for a German found business that was sold to a US company. They were in for a rude awakening when they realized that they couldn't treat us like our US counterparts. Our company offered us a lot of benefits on top of the mandatory ones, and they wanted to take them away. Safe money and satisfy the investors. As a result a lot more employees joined the union to fight against it - successful for those who stayed. But In the end a lot of us left for the competition after a year and they are still running a lot of aggressive advertisements that they're hiring. A friend whose still there says the fluctuation is still high since then.
I really, really don’t understand how Target could screw up Canada
The attraction of Target stores in the U.S. to Canadians was that it was cheaper than shopping in Canada. Lots of Canadians would cross the border to shop there. But their stores in Canada were no cheaper than Canadian stores.
Shout out to the scrapper with two shopping carts full of steel from the closing store at the 1:30ish mark. Now that's Canadian.
In Brazil’s largest metropolitan areas , it’s Carrefour or Casino , not the failed Walmart , that reigns in. Those are French companies.
But even then , what it looks like a mover within their stores is grocery retail , not merchandise retail. The Electronics retail section always look empty. Same for apparel.
And in the grocery field alone is ultra competitive.
In the home improvement specialty, there are a number of scattered chains , but the closest you have to a Home Depot or Lowe’s is Leroy Merlin , again a French based company.
Because the French Chain Retailers depend on foreign markets more than they do at home , they work carefully to adapt to markets they serve. Americans , on the flip side , think of their overseas subsidiaries , as an extension of what they do in their home country. So inevitably , they fail.
A good example would be Wal Mart US management insisting on bringing lawn mowers to be stocked at their São Paulo stores. When every Brazilian single family dweller barely cultivates a plot garden, never mind a grassy lawn. And that a considerable portion of the population lives on apartment buildings.
I walked into their flagship Edmonton location at West Edmonton Mall.
Most shelves were bare and messy. Seemed really half @$$ed.
Was hoping it was an American Zellers type place. Never came back, what a careless deployment.
I live in Ireland and I am looking at buying a bike for my husband. Again it will be Royal Enfield [we owned one in the 1980s before our daughter was born] that we buy. A truly great bike, originally purchased because it ranked highly in the reviews at the time but we were so impressed that I won't even look at another brand, I'll be heading directly to the local dealer. If you want a ''traditional'' motorbike then Enfield is the bike to choose and I can well understand why they are the world's largest sellers of heavy weight bikes, they truly deserve to be. I honestly don't think Harley Davidson could ever compete [except possibly in the US] because Enfield are not only iconic to look at but the product IS BRILLIANT AND WORTH EVERY CENT.
Simply put, the US is unique. The way the cities are built and bulldozed means having a single, enormous retailer a 15 minute drive away is more convenient, because it is straight up illegal to have anything but houses in suburbs. Everywhere else, it isn't illegal, so people can go buy groceries from the local convenience store they can reach by foot (only exception are rural people, but they often rely on self-sufficiency and mutualism), making giants like Target not only redundant, but also being seen as a threat against the local community, which includes pre-existing giant retail stores that are still a fraction of the size of Target.
It's not just retailers either. Uber ran into major issues when they thought they could push out the established taxi model in The Netherlands.
Unlike their Uber Eats branch though, not just anyone is allowed to ferry people around commercially.
Good, Uber is such a parasite.
They were banned in Denmark too I believe. Absolutely hilarious that they obviously did zero market research.
I'm constantly frustrated by the claims that Canadian consumers were somehow 'different' and that was part of the reason of the fall. It wasn't.
We Canadians KNEW what Target was, KNEW what a store was like and KNEW what the prices should be.
We we walked into a Target in Canada it wasn't Target. The prices were too high, the stores were different, and the shelves were empty. We WANTED a carbon copy of Target in Canada, and they didn't deliver, that's why they failed.
EXACTLY! I hate how people try to portray Canadians as some weirdo aliens. In fact, many Canadians wish they were Americans, they just wont say it out loud.
Even MCD's in Japan cater to Japanese sensiibilities. At one 3 story McDonald's, which is pleasant all by itself, they bring your order to your table. Your teriyaki burger arrives quickly. At another location, their doors opened earlier than other fast food places in that neighborhood. It made it easy for bicyclists and runners, trying to escape the heat, to stop by and get a bite after their morning exercise. The staff knows what coffee is supposed to taste like and keep coffee fresh. Many also serve tea- real tea. At one Okinawan MCD's they had a "beni imo" shake which is a pure sweet potato native to that part of the world. Blended in a shake gives the shake a unique flavor which is distinctly Okinawan. They may not survive in Japan forever but they are trying.
On the other hand KFC is almost a part of Japanise culture.
McDonalds is well established in Japan. Not huge but "Lets go for McDonalds today" is a thing even with the 50+ generation (especially if they have kids or grandkids). So McD will succeed in Japan as long as they serve decent fries and Teriyaki Burgers.
McDonald's has been popular in Japan for decades.
@@qtheplatypusit's not really - there are far more outlets of McDonald's than KFC. It's just that KFC managed a brilliant advertising campaign to get people to buy its crap on one day of the year.
Target failed in Canada because Target Canada werent able to re-stock any items they sold, the prices weren't bargain priced compared with competitors like Wal-Mart, and the locations they chose werent ideal that will maximise thier consumers ability to reach a Target store
They also failed because they DID NOT provide the American experience. Even if Target Canada were fully stocked and fairly priced they would be severely gimped versions of the real deal JUST across the border! Target tried to take Canadians for plebs and fools but it backfired on them.
@@potatopotato8360 American experience? You mean black people robbing you at gunpoint outside the store? I don't want that "American experience" nope.
@@UnknownNameUnknownNumber There's more black people in Brandon than in Grand Forks lol. Stop looking at a few diverse, high crime cities and thinking that's what ALL of America is like.
What I refer to as the "American experience" is abundance, wealth, freedom, not having french shoved down your throat etc.
@@potatopotato8360 lol😜 Oui
Its not about cost of harleys in India, its about what their bikes represent. An american image which most of us does not relate to. Big loud heavy and too much bling. We love humble motorcycles which won't cost a fortune to maintain. I myself own a quarter litre motorcycle known as Pulsar 200 NS. And those mid range bikes guves you performanc3 and are economical on your pockets. I am soon planning on buying a Royal enfield Interceptor 650 which is a parallel twin which i like very much. Its nit that i can't afford BMW or a kawasaki by spending a bit more but its about the image we portray. Because our bike refl3cts what kind of a person we are.
In my city in Ontario Canada the big major retail centers are anchored by a Walmarts with big box stores and other stores/strip malls/restaurants/movie theaters/entertainment businesses within close proximity thus getting a lot of foot traffic. Walmart was Target's biggest competitor when it came to Canada, they tried to challenge Walmart in prices/value but Target went to the failed Zellers locations so after the initial opening hype settled down people went back into their normal routine, with Target stores opened out in the middle of no where in strip malls that only locals go to, while Walmart was busy in the big retail center locations with a lot of foot traffic. If Target would have opened stores near the big retail centers it might have been able to compete.
When Zeller's was in Canada it had the reputation of being always out of stock, when Target opened in their old stores and had the same issue, we dismissed Target as being Zellers 2.0 and went back to Walmart.
We had a Target in Cambridge, ON. Walking in the store the first thing you noticed was that it smelled funny. Sort of a rubbery smell. The store was a mess - it resembled a close-out location. It was not a pleasant experience. I went in twice. Once when it was new and then a second time later to see if it had got any better. It had not.
Support Canadian retailers, not Walmart.
@@j2174 Target wasn't Canadian, and Zellers wasn't a Canadian retailer after 2006. It is hard to support a retailer that had supply chain problems like Zellers did, they had empty shelves with no probucts
@@proteus404 Where did I say Target was Canadian? 🤔
@@j2174 I didn't say you said Target was Canadian
Point of order: Zeller's was a fixture in Canadian retail for a couple of generations. It did not fail. It was shamefully abandoned by The Bay, which caused it's own self to suffer. Canadians remain loyal to Zeller's, to the extent that The Bay is reopening some sites encapsulated in their bigger stores. Zeddy says "the lowest price is the law". Always was; always will be ;)
Walmart failed in the UK so it took over the fourth largest supermarket chain ASDA, thry pulled out recently selling ASDA to a British billionaire. Also in reverse mode, our TESCO had a huge failure in the USA. I think its more down to cultures and customs more than anything else.
When they expanded to Canada, they actually flew employees from the US branches to dictate how to train and do things within the storefront
It went down really bad and those working were hating their us counterparts before they bailed entirely
Nonsense if true. If workers did not like the instruction quit the job. I suspect Target expected work to be done. Their store, their rules. Even if they failed they deserved to have their work expectatons to be followed. Same on any worker that took the money but did not do what was requested.
@@terrygerhart1485 you are clearly not from canada. over here, most folks that work in places like Metro/Walmart/Target cant afford to ditch their jobs or are kids that dont care and just there for the pay cheque. they may think youre dumb or stupid but will follow the order regardless. Also, i have friends that actually worked at the stores when things went down.
nice, but you missed the biggest fail: why Walmart failed in Germany and therefore the whole EU
Canadian Hudson Bay is another retailer that failed in Europe, for instance, in the Netherlands. They took over the property of Vroom&Dreesmann, a similar chain of Dutch stores that had gone bankrupt. As they were targeting the exact same clientele that wasn't interested in these kinds of stores (that's why the other company went down), it didn't take long before they went bankrupt as well.
Hudsons Bay is NOT owned by Canada, for a long time now Usa corp bought it and wrecked it, just like they did tim hortons
Similarly, Tim Hortons and Shoppers Drug Mart, two Canadian category killers, have tried but failed to penetrate the US.
Love how 3 of the examples reviewed in this episide show that the simple, research-allergic dictum that "US retailers fail to account for differences in consumer preference in international markets" is by no means the ubiquitous case some have imagined. Rather, we see that (1) poor inventory management and lack of operations modernization and (2) lack of foresight in supply-chain vulnerability, and (3) pricepoint sensitivity that requires new manufacturing lines were critical failures that did in major brands in key international expansion campaigns -- not some feel-good, but baseless jingo about not understanding consumer preferences due to cultural imperialism. In these 3 examples, popular sentiment and desire of the targeted consumer base was NOT the problem. Cultural imperialism certainly exists -- I just think the profit motive has "learned" a whole generation of retailers, many of whom have adapted since the early days of the post-Soviet collapse, post-China-in-WTO moments. Observe how different McDonald's stores - in particular, their coffee offerings - are in Australia, vs. most locales in the US, as an example. Funny how many likes come to poorly researched statements that react to other real trends that are not necessarily reflected in the cases of major retailers. This is from someone who doesn't typically support globalization. I just think we should appreciate complexity management operational sophistication - and the formidable challenges to the same - wherever they occur.
You’re right that its naive or misguided to believe that big US companies don’t do market research to understand different consumer preferences - they certainly do. But they don’t always follow it through very well, especially if the research tells them they’re going to have to start doing things that are fundamentally alien to their corporate culture. I speak as someone who has been involved in coaching US executives based in the U.K. - you can show them chapter and verse, from their own research, on why they have to do something differently and of course they “get it” (these are usually very smart people). But then they think about having to explain it to the folks in HQ, and they know that they’re going to have to explain it every time they report (“remind me why this has to be different there?”) and every time they get any visit from someone from HQ.
And there’s an assumption in most (not just US) companies that any kind of process deviation creates cost and complexity and there’s a huge pressure to avoid it - and thus a huge pressure on executives not to suggest that, sorry, but in this case we have to do it differently. Sure, it’s not as simple as it’s painted here and the companies aren’t stupid, but adapting to different markets and consumer cultures really is a big challenge. The particular challenge for American companies is the foreign operations are often initially tiny in comparison with vast US operations and turnover and that creates an even stronger resistance to any process or proposition deviation (“we have to do this - for how much? Nah, keep it simple, do it our way”).
@@davidpaterson2309 Great to have a response from someone with a first hand window into market entry attempts. The point you make about scale difference between home base and pilot and fighting internal ops prefs is well taken.
Oh, okay, American retailers don't necessarily fail in Canada. Walmart and Costco were succeeding, and even Sears was still there. Target just sucked. I do think this is a poor example of "Why American companies fail abroad", because it sounds like all they had to do was come correct, show up with the same experience they were already selling, make sure the first few stores were working well before they expanded, then just build it out from there, and they would have had Canadian customers all day long. But they just shot themselves in both feet about it.
Well,...Sears have also left Canada since 2018 and just this year, Nordstrom has also closed their stores in the country.
Target tried to expand there too quickly. Sadly, a sign of poor management. You can't build a whole huge retail infrastructure for hundreds of stores in another country in a few months. Huge blunder.
Harley motorcycles are overweight and underperforming.
Their brand image is strong, but they need a different type of bike to enter competitor markets.
The best the the US government will do is to sanction China so a Chinese competitor don’t steal from Harley-Davison at home with a cheaper and better quality imitation.
Worked for a really great contractor in Minnesota that built a lot of the buildings around here. We also had a great operation in Iowa and Phoenix. We had a chance to do business in San Antonio Texas and we jumped on that. We build a hotel and condo park. It was an absolute disaster. They used Minnesota contracting standards for everything. They even sent Minnesota project managers down there to manage it instead of hiring locals. It was a huge lesson to the company and they learned quite a bit. Now they are in quite a few states and didn't make the mistake of assuming every state was as easy to do business in as Arizona or Iowa.
If there's one takeaway from this video it's that American companies tend to enter a market without understanding the market they're entering into.
MacDonal's failed in Jamaica too. One reson I think 8s the quality of their food. Many Jamaicans complained about it and how small the big Mac was.
In the mid 90s, K Mart are also short lived in Singapore too. They failed and eventually closed down all.
Why? KMart was a great store chain.
Thoroughly enjoyed this, thanks.
HD is for leisure not utility. That's mostly a non-existent concept out of the US.
Why didn't they open a few stores first to test the waters? And why flee at the first sight of trouble instead of solving the issues?
Money, you either go in make a killing or you get out before you lose too much, baby steps dont work for companies only seeking immediate profits
It is their way or the highway
One thing I didn’t hear mentioned was Walmart’s failures both domestic and abroad. Two mistakes were 1) to adapt to German retail, I believe in the 80s or sometime like that they tried their hand at opening in Germany. It’s been a while since I read up on this but I believe they failed due to the existing supermarkets like Aldi and Lidl which are already marketed as discount retailers making up an existing majority of retail shoppers. Therefor shoppers were hesitant to adopt to Walmarts system.
2) Secondly I heard that when introduced to the idea of moving online (sometime in the 1990s) they thought of the idea of selling online as absurd, they were strictly a brick and mortar retailer (introduce Amazon) and we now see that they are trying to move more online allowing you to shop online.
Yup. I went there twice, and it was half empty and never went back for several years until they left.
Target Australia is not owned by Target USA, it's not doing well either. It's competing with Kmart which are owned by the same people as Target. They're in the process of either closing down Target stores or converting them to Kmart stores.
You guys still have Kmart 🤯
@@J-wu8sc yes, and it is super successful, completely different to the US Kmart
It’s likely Target in Australia will become more online focused. Kmart in Australia has been mimicking some of what makes Walmart do so well in the US.
@@av_oid Kmart Australia doesn't sell food. Their checkouts are in the middle of the store. Things are separated into sections and then rows, not long rows from end to end. A different type of store.
@@J-wu8sc Our Kmart and Target have nothing to do with the American versions. Basically the have the same name and brand colors and that's it.
I thought Target just overreached. They should have started with a few stores in Ontario and worked out the kinks, then expanded more slowly to other provinces.
Almost any successful brand has to adjust to a massive degree to the needs and wants of the local market. That means the leadership has to be at least 50 percent or more from that country, and the solutions also. What Target should have done is first open a small network of Canadian stores that they could experiment with and improve until they were operating smoothly in terms of distribution, inventory selection and control, etc. Then they should have expanded slowly to other provinces, again allowing for adjustments along the way.
I lived in Japan for many years, and almost invariably the American brands that were successful there allowed for local control of operations. 7 Eleven for example is the largest convenience store chain in Japan and it dominates that market - but it is operated by Japanese leadership. Kentucky Fried Chicken in Japan continues to be successful, again because it operates in accordance with the needs of the Japanese market. I even saw American brands there that have almost disappeared in many US markets. (Shakey's Pizza).
@@JulianKazmier-vo3fn Yes, now they do. When the company first went to Japan they didn't. The company headquarters are based in Irving Texas and it started in 1927.
"I even saw American brands there that have almost disappeared in many US markets."
Seeing Lawsons in Japan cracked me up.
Exactly this. You take the advantages of a parent company (logistics, purchasing power, etc) and you tailor the user experience based on local needs/wants. You don't force the experience on a different culture or abandon the economies of scale you already have.
Navy?
I miss Target! I was there mostly every week! My store was never empty!
Because cutting customer service and value to the community by 90%, while reducing prices by 5% does not work anywhere but in the US.
They fail because the American retailers are only hyped up in America.... 🤦🏻
It's Harley's design is its downfall. Why would you use and ride one on a congested and rush hour traffics like in India etc. whereas you can use slim and compact motorcycles that can easily slip through in a traffic.
Target came to Canada, moved in to the old Zeller's locations, and just became a repeat of Zeller's, shlocky merchandise, messy aisles, bare shelves, few staff, few real bargain prices... a big disappointment for the many Canadian consumers who often had first-hand experience of U.S. Target stores...
I live in Australia andTarget has been here I don’t remember how many years, because I moved here from Europe 36 years ago and if I recall exactly Target stores were here about the same time.
Years ago target was a store that sold cheap stuff but about average, meaning better quality than Kmart, a little bit more expensive also; but slowly it started going down until one day we realised that everything in the store was equal cheap quality to Kmart or even worse.
About 8-10 years ago or so, the Target store in my neighbourhood shut down its gardening and outdoor furniture department.
All my neighbours and everybody in the area was pretty disappointed because the next store that sold gardening tools, potting mix, plants and pots and outdoor furniture was pretty far away from us now and we missed that section of Target.
We could not guess for what reason they closed it down. This was long ago and we still didn’t get a replacement for it in our residential suburb…
Then three years ago the entire store shut down altogether and that was a shock to everyone because we didn’t realise it wasn’t doing well… whenever we went there, were people inside it wasn’t empty or deserted.
But it still , the quality of everything they sold was at the level or below the level of Kmart, although the prices were a little bit above Kmart and that was something that everybody noticed.
Woolworths took Target’s place and that’s not good enough for us really, because it doesn’t have cheap clothing and household appliances like Target used to.
Now the next Target store close enough to us is like 10 km away…
My Local Canadian Target store was very nice. Prices were decent, and it was a pleasant place to shop in comparison to Walmart. However, they never had anything on the shelves to buy. Christmas Merch showed in in Spring, and Spring Merch showed up in December. Target didn't fail because there was no market. Target failed in Canada because it didn't have anything to bring to the market.
I triedb Target a couple of times. Too much empty shelving.
Consequence of not accounting for french labeling requirements and trade barriers, so they (unfortunately) couldn't just haul stuff in from their DCs in Minnesota to sell in Winnipeg Targets, for example.
As a European, I don't see a point in selling 500x the same product in different packaging. An alley with no end with just toilet paper... yeah right.
😂😂 you need to stock up man. Each trip takes a few hours.
I haven't started the video yet. But I have a guess.
US stores are highly optimized for US shoppers, suppliers, land use and variety of other very specific factors. No matter how good a store like Target is at that *very particular* function, it doesn't translate well outside of that market. Although we see big box stores as being somewhat of a general goods store, the truth is that they are a highly evolved specialist that struggles outside of its native territory.
Just like you wouldn't want to race a F350 dually on a track against a Porsche, you don't want to try to pull a 15,000 pound trailer up a mountain pass with a 911.
Walmart took over ASDA in the UK and now have sold the controling share but everyone is aware of Tesco failing in the US. An Australian company bought UK's Homebase and sold it within about a year. Danish Netto left the UK in 2010s after 20 years in the UK came back in 2014 then left again in 2016. Aldi just left Denmark after 45 years. I dont think it is just an American problem.
I was an American University Student living in Quebec and got a part-time job at Target when it just opened. People were excited at first and open to it. Target didn't understand their Canadian Customers and their Quebecois customers at all. No market research at all. Essentially all they had was 1 20 something woman (smart woman) who was flown to Minneapolis for a Summer, paid to translate things, and then put them in charge of the regional market with orders to enforce.
Quebecois customers are Canadian customers. The arrogance of US retailers is regularly on display. They assume Canada will be the same as the US. It isn’t. Not at all.
@@j2174 Québec is considered a different market than Canada due to different consumer habits, and as such, are treated as distinct from Canadian customers (which is why La Petite Vie has the world record for highest market share achieved by a single television program, despite having around 4 million watchers : that represented over half of the population of Québec at the time).
Let me guess, you're Ontarian ? Maybe Albertan ?
@@bastobasto4866 Nonsense.
@@j2174 strong argument
@@bastobasto4866 just as good as yours. All you said is “Quebec is considered a different market than Canada due to different consumer habits”. That an intro sentence, it’s not actually a point.
And then all you had was “oh a show had the largest market share in a market”. Not evidence of a “different market”.
Then you went down the generic path; “let me guess, you’re Ontarian ? Maybe Albertan ?” 🤣
Did you think that was point as well?
Released 3 hours ago but all the sales research is 5 years old. Curious how these companies did during the pandemic.
A lot of large retailers did pretty well during the Pandemic. Mostly because they were the only stores allowed to be open. But although Target's stock price nearly tripled during the surge, it's about half of that now
I lived in USA for three years. One thing I don’t get is the popularity of Target, especially the grocery part. It has less than one aisle dedicated for fresh produce. How can Americans shop in places like this?
Easier than making a trip to another place
The same is happening in Australia. The problem is they failed to do their research properly which is why many businesses fail. They just don’t meet community need. The products in Target are drab and dated and just are not what the community wants or needs. They also have to compete with other stores like KMart and Aldi who are cheaper and more current especially with clothing, footwear and other products. Having the American model of shopping is not necessarily congruent with multicultural communities who open their own shops where people buy what they need. Last time I went to Target I just couldn’t find what I wanted. The women’s clothing was simply dowdy and poor quality and the men’s not much better. I think KMart will end up the same way for different reasons. Making shoppers feel discomfort for going into their store might be what sinks them. People don’t want store robots and facial recognition spy equipment to contend with or poor service.
Target Australia isn't Target. They just got permission to use the name, that's it.
Government to blame over taxing & regulating private sector... socalism policy sucks
In Australia, KMart and Target are the same company.
The US CEO leaving was good for the company as he was a bad CEO. He was the one that decided the stores in the US needed to change promotions and retention.
He decided that 100% of the interviewers had to say yes to a candidate or they'd not be promoted and that departmental specialists were to be eliminated costing 10s of thousands their jobs
Target stunk it up in Canada.
They hired a bunch of old Zellers staff and the place looked like a Zellers store with Target signs. It was a weak management team that had flopped before.
Target HATES employees and is a poorly run company. My daughter works at one of the largest Targets on the East Coast and they are systematically understaffed. Store managers hire the absolute minimum of employees necessary just to keep the doors open and then treat them like chattel so they quickly leave. The 2023 Christmas season saw the store largely skip seasonal hiring. As a result, displays were left a mess and stocking fell behind. Worst of all, they rarely had more than one or two cashiers resulting in ridiculously long checkout lines. The stores are incredibly unremarkable and I really don’t get the obsession.
Canada, Europe etc. already have strong companies that offer what Target, Wallmart, Amazon etc. offer, and they´ve been around for a long time in these countries, so people won´t switch without good reason. Therefore winning market shares there isn´t as easy as in for example an underdeveloped market or the home market. To get people to switch, either they need to offer unique products or better prices. But it will be hard either way, because they´re late to the party.
They should have started off with one store. They should have found out what products Canadians wanted.
I've heard that Costco has done surprisingly well in both Japan and South Korea. My friend's membership card even worked there!
Costco does very well in Canada also. They treat their employees very well and it shows. Walmart on the other hand….I rarely set foot in
I know exactly why Target failed in Canada...
The "grand opening" was delayed several times ( over six months). My wife and l drove by several times for the official openings only to find contractors still working on the building).
The selves were often empty with some entire isles partially deserted.
Canadians gave Target a chance but were disappointed too many times.
Guess what!! Americans generally do not love Target. As a matter of fact, we are boycotting them.
Using the verbiage "Neighbour with a 'U'" isn't some genius marketing thing it's just correct spelling in Canada (and everywhere else in the world that speaks English that isn't America)
English is definitely one of the weirdest and most inconsistent languages
It's actually pretty effective marketing if you think about it. It highlighted Target as an American country, and also a nod to being a friendly country that shares a border at the same time.
It also speaks about the overall similarities while recognizing there are some differences. In terms of communication, it's saying a lot with very little, which I would call effective marketing.
@@TheGreatWasian_ "thanks" to americans! When I learned English in school in the 80s communist Romania we were taught the British English since that's the correct English since Brits are older than Americans. And so was the British English taught everywhere else around the world because the american propaganda and deculturalization had not yet started until early 90s (at least here in Romania).
But with the americans taking over the entire planet like the plague that this nation is, a lot of words and phrases have been invented, all of the media was spoken in american english, the computers, the cartoons, the movies, the music... everything was in american english (even I speak the american english today, which sucks, but I have other things that I need to fix in my life that are more important that fixing the version of English that I speak)...
So yeah, americans.... so sick of them, this is the most artificial and fake-ass nation that has ever existed. I think even Liberia are more genuine than USA... I hope by 2100 we will never hear about USA anymore...
@@TheGreatWasian_ that’s because Noah Webster deliberately changed such things in his American Spelling Book. His idea was to turn American into a new language that Britain couldn’t understand. Trouble is, we changed some too, such as tragick, magick, musick and olympick.
BEST BUY failed in Turkey too. They opened big stores outskirts of cities while its local competitors had smaller stores in cities and BEST BUY failed...
18:11 yes! when I visited Iceland I was taken aback by how expensive the food was
They should have just copy pasted the Alaskan Targets into Canada. Obviously Alaska and Canada are not the same, but they figured out the logistics here, they could have done it there. They could have started in Vancouver, and slowly expanded east.
The fact that Target thrives in Alaska but is crap in Canada means someone fked up bigtime. I mean, some of my Target deliveries literally travel through Canada to get to my doorstep.
Australian Bunnings hardware superstores went to the UK and were robbed blind. They lost over a billion dollars and shut the UK adventure down.
Maybe they should try San Francisco next?
Bunnings got things very wrong in the UK they took over Homebase and trashed everything . They sacked a lot of middle management because they new better what we British wanted and got rid of what people went to Homebase to buy. They stocked stuff that sold well in Australia like big gas bbq’s log splitters which are not that useful in the UK and dropped the soft furnishings which sold well ,Homebase had a largely female core customers. They were losing twenty million pounds a week before they pulled out and the company went into administration and lots of good people lost their jobs which was terrible. This is possibly a case of mismanagement at it’s finest.
@@johnludmon510 : Yes but the story ends on a brighter note (for British customers) because Bunnings sold the business for a token £1 and now Homebase (the original owners) are doing really !!