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Operations Planning

Once the operating requirements and any existing Canadian assets that can be lever- aged have been identified, the retailer would be well served to investigate a variety of operating solutions to support its expansion efforts. In developing these options, the retailer should consider a full range of operating and systems alternatives and combi- nations thereof. To that end, the following options represent the more typical ‘go to market’ approaches for retailers:

  • 1.

    Upgrade the existing operational and technological infrastructure to support the business from outside of Canada.

  • 2.

    Typically, this approach represents the most common choice for U.S. retailers that do not currently have a physical presence in Canada. This option involves the re- tailer making the necessary enhancements to its current operating environment that at a minimum will support the launch and at least one to two years of ongoing oper- ations in Canada. At a minimum, these enhancements would include the implemen- tation of an international shopping cart and logistics solution provider as previously discussed. With this approach, the retailer has the time to ascertain the viability of the Canadian business along with gaining a better understanding of the necessary operating and marketing requirements before having to make major investments in Canadian systems and infrastructure. It also has the potential for lower operating costs and better customer service than a third-party solution, primarily because the retailer has the ability to leverage its existing systems and operations and to main- tain a single inventory. The negative considerations with this approach are longer transportation times, additional freight/duty costs, and potential customs-related delays.

Typically, the timing and costs of this approach are dependent on the scale and complexity of the modifications to the current systems.

3. Utilization of outside service contractor(s) for any or all of the operations and/or technology activities in support of the Canadian enterprise.

This approach is usually employed if the retailer is located outside of North America; employs third-party service providers in its domestic online business; or if the busi- ness has determined that the enhancements to the retailer’s existing operation to support the Canadian undertaking will take too long or be too costly. As was the case with the first option, the retailer will be able to defer major infrastructure invest- ments until after the viability of the Canadian launch has been determined. Most likely, this approach will also result in lower start-up costs and a faster deployment than an in-house option. Also, the retailer will have the advantage of leveraging the supplier’s systems, knowledge, and experience resulting in the need for less inter- nal resources from deployment all the way to operational maintenance. In terms of adverse implications, there are a limited number of qualified suppliers. Additionally, the retailer will have indirect control over the customer experience, and a separate inventory must be maintained in Canada. Lastly, there is the potential for financial and operational instability of the contractor.

Visa e-commerce cross-border handbook for U.S. retailers

Copyright 2010 Visa. All rights reserved.


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