ADMS 2511 Lecture Notes - Lecture 33: John Mulligan, Groupthink
1 May 2018
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ADMS 2511 Lecture 33 Notes – Why did a large, experienced retailer make so many basic
errors when launching its Canadian outlets?
Introduction
• If soeoe does ot speak, it’s assued that he or she is i full agreeet.
• In other words, abstention becomes viewed as a yes vote.
• Groupthink can also take place among strategic decision-makers, as OB in the Street
shows.
• In 2013, US-based Target brought its mass-merchandise stores to Canada, building over
100 stores in under a year.
• Things did not go well over 2013 and 2014.
• The stores drastically underperformed, with customers complaining about poor
selection, high prices, and empty store shelves.
• The retailer admits to poor planning, failing to research the prices charged by its
Canadian competitors, and not making sure its supply chains would work properly.
• Even with these difficulties, Target Chief Financial Officer John Mulligan said the retailer
was in Canada for the long haul.
• Mulligan admitted that we bit off way too much, too early.
• I retrospet e should’e proaly opeed fie to stores [i ]—refined the
operations, refined the supply chain, the technology, got our store teams trained.
• But agai, that’s all hidsight, e are here e are right o ad e’re foused o
moving forward to fix this for our guests.
• Despite this stateet, i 5 the US paret opay’s CEO, Bria Corell, aoued
that Target was pulling out of Canada and closing all 133 stores across the country.
• Why did Target’s Caadia management team choose to continue to open even more
new stores in 2014 after its first stores opened with a strategy that was proving highly
problematic? Groupthink is part of the answer.
• As one former employee stated: [Key team members from the United States] were not
guides or resources, as much as they were obstacles to progress.
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