Organization And Management Kmart

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Abstract Kmart is one of the leading discount stores chain in the United States. Despite having gone through turbulent times over the years, the company has experienced resurgence after resurgence to remain among the top three largest chains. However, it ranks third behind Wal-Mart and Target, despite being a pioneer of the discount stores ‘movement’. This paper took a closer look at Kmart’s value proposition, market position and competitive advantage. it also scanned its current environment and that of the industry by applying the Porter’s five forces model. Identified several strategic issues that Kmart must re-look so that it can either regain its leadership position in the industry or remain as a worthy player in the industry. For instance, it should tailor its target market from the urban areas where its stores are predominantly located. It should also abandon the cost leadership approach in its pricing strategy. Adapting technology in managing its inventory and merchandising would go a long way in cutting its costs. Revitalising its brand image should focus on creating a unique customer experience. Furthermore, besides transforming its methods the company should look at management changes to steer it from repeating similar mistakes that has led it to the current situation. Table of Contents Abstractii Table of Contentsiii 1Introduction1 1.1Value proposition1 1.2Market Position2 1.3Competitive Advantage2 2External Environmental Scan/Five Forces Analysis3 2.1Current environment3 2.2Five Forces Analysis3 2.2.1Buyer Power3 2.2.2Supplier Power4 2.2.3Rivalry4 2.2.4New Entrants5 2.2.5Substitutes5 3Strategic issues5 3.1Target Market5 3.2Pricing6 3.3Inventory Management6 3.4Brand Image7 3.5Management7 4Summary/ Key Findings and Recommendations8 References:9 Running head: PRELIMINARY STRATEGY AUDIT i PRELIMINARY STRATEGY AUDIT ii Introduction Kmart’s story began when Sebastian Kresge opened a store in Detroit back in 1899. His low prices appealed to many customers and he was able to open an additional 84 stores in the next thirteen years. Currently, the Kmart business empire has about 1500 stores and operates an online store, Bluelight.com. The brand stands for quality products and low prices. Despite many challenges presented by wars and financial crises, the business did not fizzle out. It continued its expansion and opened ‘discount stores’ that sold goods for a dollar or less (searholdings.com). The discount stores chain has beat all odds to become the world’s third largest chain behind Target and Wal-Mart. Value proposition Kmart is a subsidiary of the Sears Holding Corporation that offers its customers quality products at affordable prices. The discount stores chain offers an assortment of merchandise that includes consumer electronics, toys, garden equipment, outdoor living, food products, apparels and seasonal products. A few y.

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In November of 2013 Doug McMillon had just been named the CEO of Walmart Stores, Inc. effective February 1, 2014. McMillon had unique preparation for the job. He had held senior executive positions in Walmart’s domestic operations and had presided over both the company's international operations and Sam's Club, Walmart’s discount club chain. McMillon would likely need to draw upon his diverse experiences to successfully lead the company in the face of mounting challenges. As recently as 1979, Walmart had been a regional retailer little known outside the South with 229 discount stores compared to the industry leader Kmart’s 1,891 stores. In less than 25 years, Walmart had risen to become the largest U.S. corporation in sales. With more than $469 billion in revenues, Walmart had far eclipsed not only Kmart but all retail competitors. Yet another measure of Walmart’s dominance was that it accounted for approximately 45 percent of general merchandise, 30 percent of health and beauty aids, and 29 percent of non-food grocery sales in the United States. Despite its remarkable record of success, though, Walmart was not without challenges. Many observers believed that the company would find it increasingly difficult to sustain its remarkable record of growth. Walmart faced a maturing market in its core business that would not likely see the growth rates it had previously enjoyed. Growth in same-store sales had declined in multiple quarters in the previous year. Many investors believed that Walmart had reached a point of saturation with its stores. Supercenters had provided significant growth for Walmart, but it was not clear how long they could deliver the company's customary growth rates. The company added new stores at a prodigious rate, but the new stores often cannibalized sales from nearby Walmart stores. Walmart faced problems in other business areas as w& The Walmart-owned Sam's Club warehouse stores had not measured up to Costco, their leading competitor International operations were another challenge for Walmart Faced with slowing growth domestically, it had tried to capitalize on international opportunities. These international efforts, however, had met with only success at best. Walmart was also a target for critics who attacked its record on social issues. Walmart had been blamed for pushing production from the United States to low-wage overseas producers. Some claimed that Walmart had almost single-handedly depressed wage growth m the US. Economy. For many, Walmart had become a symbol of capitalism that had run out of control. Indeed, Time magazine asked, "Will Walmart Steal Christmas?" Much of the criticism directed at Walmart did not go beyond angry rhetoric. In many cases, however, Walmart had faced stiff community opposition to building new stores. With such challenges, some investment analysts questioned whether it was even possible for a company lilac Wal-Mart, with more than $469 billion in sa ...

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In November of 2013 Doug McMillon had just been named the CEO of Walmart Stores, Inc. effective February 1, 2014. McMillon had unique preparation for the job. He had held senior executive positions in Walmartâ€™s domestic operations and had presided over both the company's international operations and Sam's Club, Walmartâ€™s discount club chain. McMillon would likely need to draw upon his diverse experiences to successfully lead the company in the face of mounting challenges. As recently as 1979, Walmart had been a regional retailer little known outside the South with 229 discount stores compared to the industry leader Kmartâ€™s 1,891 stores. In less than 25 years, Walmart had risen to become the largest U.S. corporation in sales. With more than $469 billion in revenues, Walmart had far eclipsed not only Kmart but all retail competitors. Yet another measure of Walmartâ€™s dominance was that it accounted for approximately 45 percent of general merchandise, 30 percent of health and beauty aids, and 29 percent of non-food grocery sales in the United States. Despite its remarkable record of success, though, Walmart was not without challenges. Many observers believed that the company would find it increasingly difficult to sustain its remarkable record of growth. Walmart faced a maturing market in its core business that would not likely see the growth rates it had previously enjoyed. Growth in same-store sales had declined in multiple quarters in the previous year. Many investors believed that Walmart had reached a point of saturation with its stores. Supercenters had provided significant growth for Walmart, but it was not clear how long they could deliver the company's customary growth rates. The company added new stores at a prodigious rate, but the new stores often cannibalized sales from nearby Walmart stores. Walmart faced problems in other business areas as w& The Walmart-owned Sam's Club warehouse stores had not measured up to Costco, their leading competitor International operations were another challenge for Walmart Faced with slowing growth domestically, it had tried to capitalize on international opportunities. These international efforts, however, had met with only success at best. Walmart was also a target for critics who attacked its record on social issues. Walmart had been blamed for pushing production from the United States to low-wage overseas producers. Some claimed that Walmart had almost single-handedly depressed wage growth m the US. Economy. For many, Walmart had become a symbol of capitalism that had run out of control. Indeed, Time magazine asked, "Will Walmart Steal Christmas?" Much of the criticism directed at Walmart did not go beyond angry rhetoric. In many cases, however, Walmart had faced stiff community opposition to building new stores. With such challenges, some investment analysts questioned whether it was even possible for a company lilac Wal-Mart, with more than $469 billion in sales, to sustain its accustomed .

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