The Pros and Cons of Logistic Relationships and International Expansion

The Pros and Cons of Logistic relationships and International expansion

        I chose two articles that have a complete opposite effect on logistic relationships in order to demonstrate the ramifications of international expansion of American companies. It is crucial to understand all aspects of a culture before migrating into it; this includes beliefs, ethics, and sometimes even religion. With a good strategic plan a company can become fruitful and profitable while assisting the locals of the country into prosperous growth. A successful endeavor would be one that benefits both company and adoptive country. However,  a company with a weak strategic plan would lose favor as well as customers due to the lack of communication, logistic planning, and inexperience. Endeavors such as these would lead to profit losses, bad reputations, and ill hearted relationships; in worse cases a complete pull out of the adoptive country with no chance of return or expansion.

        Here are the two articles which gives you an idea of what I mean.

In a Surprise Move, Target Exits Canada and Takes $5.4 Billion Loss

        After less than 2 years, Target has decided to pull out all 133 stores from Canada which will cost them an estimated $5.4 billion in a pre-tax loss, exit costs, and operating loss.

        The decision to leave Canada was due to the struggles of supply chain management; these consisted of poor communication, warehouse deficiencies, and the use of inexperienced staff. Due to these struggles it leads Target stores to be poorly stocked with limited selections leaving customers disappointed and deterred. Target hired Eleven Point Logistics a subsidiary of “Genco”, which planned the movement of items and a wholesale agreement with  “Empire Co’s Sobeys” which would supply the groceries, Though there were many instances of finger pointing between Target and its logistical suppliers the facts show that many concern were identified the first year that could potentially impact the company’s bottom line; facts such as the with the push of new technologies and systems  employees lacked the experience to adapt and the poor training did not help as well. An example was used to explain one such problem; Barcodes on many items did not match what was in the computer system causing massive logjams in the warehouse, thus products did not get restocked in a timely manner.

        Though Target is liquidating its store (benefiting those who wish to expand into Canada such as Wal-Mart) It will compensate former employees with 16 weeks’ of pay and evaluate itself on where it went wrong.  (Rueters, 2015)

India Lets in Wal-Mart, with conditions

        Wal-mart has come to an agreement with India to allow them to open up stores and sell within their country, however there are some stipulations in which Walmart need to follow in order to complete the deal,

        1-Retail stress can only open up within states who follow the policies