Industry Analysis Report on Kmart
Kmart is a huge vintage company that had peeked at one time and now is
struggling to survive due to competition and other legal battles. This
analysis report will describe and analyze the major forces that shape
the structure and competitive intensity of Kmart. This report will
look at Kmart’s history, competitors, marketing strategies, and some
legal battles that have affected the company. The shaping and
structuring of Kmart started more than one hundred years ago.
Over a century ago, Sebastian Spering Kresge opened a small store in
Detroit, Michigan and tainted the entire setting of retailing. He
built this store not intending that his store would develop into an
empire of more than twenty one hundred stores and an Internet presence
that reaches millions of customers everyday.
The S.S. Kresge Company founded in 1899, opened its first Kmart
discount store in 1962. By the next year, Kmart had opened 53 stores,
on the verge of being the number one retailer. In the 1970s, Kresge
began opening smaller 40,000 square foot stores in smaller towns and
switched from brand name to private label goods manufactured
internationally at low cost. Over the years, Kmart hurt its own
development efforts by diversification into specialty retailing, which
brought it close to bankruptcy. In the 1990’s, the company had to sell
off its Sports Authority, Borders, Office Max and Builders Square
chains. A decade later in the twentieth century Charles Conaway
replaces Floyd Hall as chairman and CEO. About a year after the new
chairman and CEO joins Kmart, the corporation bought BlueLight.com
Internet service and soon there after Kmart Corporation files for
Chapter 11 bankruptcy protection due to stiff competition, corrupt
leadership, and bad financial planning.
Kmart filed for bankruptcy protection, once the largest retailer ever
to do so in U.S. history. Most industry analysts believe the cause of
the company's bankruptcy filing was due to stiff competition from
WalMart, Target, and lack of marketing strategies. Besides, when
WalMart and Target predictably entered into Kmart's territory, Kmart
had given its customers every reason to go somewhere else.
With more than 4,000 stores and insistent expansion plans, WalMart is
a one of the strongest retail forces. Their advanced inventory
management system, pull with suppliers, and thrifty corporate culture
have enabled the industry giant to produce solid boundaries while
offering the lowest prices. Target is also a fearsome competitor,
offering fashionable items at reasonable, but not the lowest prices.
Competition is not the only source of Kmart's consistent poor
performance. Another reason is that Kmart’s never had a marketing
strategy. Kmart needs a structure to guide its decisions in pursuit
of performance objectives.
In the past, Kmart depended on the focus of...