K-Mart which is often known as Kmart is one of the leading American chains of discount stores which has its headquarters in america of America. In 2005, it attained Sears so that it could form an totally new company and exploit the opportunities available in the market. Sears Holding Company was proven in 1962 and grew to become the 3rd biggest string of discount stores around the world. The two main opponents of Kmart are Concentrate on and Wal-Mart. Kmart offers its customers high quality products by having a diversified profile of top notch brands such as Sofia Vergara, Smart Sense, Road 66, Joe Boxer and Jaclyn Smith (Sears Media, 13).
As of Feb 2013, the Sears Keeping Firm has about 1, 221 Kmart store in 49 claims of United States across Guam, the U. S. Virgin Islands and Puerto Rico. You will discover about 1, 196 discount stores which have an average size of 94, 000 sq. ft and about 25 Super Centers with average size of 168, 000 sq. foot. It has been mentioned by Graff that most Kmart stores are on one floor in the form of free standing systems which are having the wide selection of products from many types of products such as seasonal items, outdoor living, garden equipment, consumer electronics, toys and games, food and consumable along with clothing (60).
Kmart is well-known for the Blue Light Specials which happened as the delight occasions at the store (). The employee at the store would light up a light of mobile police highlighting the discount offers specifically team of the store. Kmart is also within Australia and New Zealand but they have its major operations within US (Sears Press, 16).
SWOT evaluation of K-Mart
In order to examine the strategic setting of Kmart, SWOT examination will show you the resources and capacities owned by the business and the opportunities and hazards present for the discount store. A detailed review of all of these factors will reveal the future aspects of the retail industry in US and will ensure that Kmart can exploit the opportunities available within the industry (Zhu, Vishal and Tag, 454). With the advent of time, the retail industry is getting competitive as the organizations are contending against one another aggressively for attaining high degrees of market talk about. The detailed evaluation of Kmart's SWOT is as follows:
Strengths
As Kmart has been present in the industry for many years, it includes strengthened its resources and functions effectively. The only way of contending in tough monetary situations is to purchase the core competencies possessed by the store. The analysis of Kmart performance in the retail industry shows the following advantages:
It has an extremely committed and faithful labor force and management team that are always striving to keep up the store's competitiveness within the industry. The employees of the organization are considered to be an integral part of the corporation so that they can feel appreciated and worthwhile. To be able to wthhold the employees for long period, every staff are provided the most appropriate compensation package so that they are rewarded for their performance.
HR professionals of the business ensure that they keep an eye on the changing requirements and regulations related to the employees in order that they develop policies relating within the legal limitations. The guidelines and laws are kept up to date frequently so the employees are provided the latest settlement packages for their jobs.
In order to provide excellent shopping experience to the clients, the sales and marketing workers ensure that they are provided the easiest one stop shopping service. Although Kmart allocates limited amount of cash in its marketing campaigns but it designates sufficient money for working out and development of sales employees. Kmart mainly relies on the knowledge provided to the customers on the first stop by at the store so that they become repeated buyers and loyal to the store as well.
Since every company is buying creation of value chain supply chains, Kmart has attempted to capitalize onto it by developing an efficient distribution network. It includes carried out the latest IT system so that its procedures become digital and cost efficiency can be gained from these online operations.
Kmart is highly regarded among its customers for offering the most diverse range of products that happen to be of superior quality and present them value your money can buy. The latest brands are stored in the discount chains so the customers can get the entire range of offerings within their budget range.
Weaknesses
Since every firm has some fragile areas, it is essential for them to keep track of them so that they can be eradicated with the duration of time (Li and Lin, 593). Kmart has some weak areas as its reputation has been influenced by some events and it is important for the business to work on them in order to be converted into its strong areas. Kmart has the following weaknesses:
Bankruptcy declaration which was submitted by the store in 2002 as its sales were suprisingly low. Though it has been more than ten years since the company faced this issue but it offers still impacted the brand image of the Kmart stores to a significant level.
Kmart has developed a highly effective Marketing section which carefully bears out the marketplace research to assemble information about the customer needs and desires. The one weakness in this team is that the marketing strategy is not properly designed and it includes unexploited various avenues for achieving the marketplace effectively.
It has allocated low profit margins in the suburban stores which has effects on its revenue stream. It has to revise its financial strategy so that it can ensure that the financial plan is properly developed and sufficient budget is allocated for the useful management of procedures.
The supply chain is ineffective as it lacks the success required in the discount chain stores. Wal-Mart has generated a competitive advantage based on its efficient and extraordinarily cost-effective circulation channel so that it can have a adaptable and agile logistics construction.
There is lack of uniformity in the stores and the assortment of products is not correctly done. Most of the customers think that the Kmart stores do not provide extraordinarily interesting shopping experience in the stores as they find difficult in locating the products within the outlet stores.
Opportunities
In order to assess the opportunities designed for the store, it is better to examine the exterior factors within the industry such as political stability, economic developments, customer demands while others in order to be availed properly. The opportunities available for Kmart are as follows:
The store strategy must be repositioned such that it can comply with the demands of the urban population. In order to fortify the image, the business has to reconsider the merchandise and service offerings so that they meet up with the standard degree of the prospective market.
An integrated supply chain should be created like the main one in Wal-Mart so that the management of functions becomes efficient and effective. The IT system can be upgraded by availing the services of the leading companies such as SAP, IBM or Cisco who will design the complete system in accordance to the requirements of Kmart.
An up gradation of store infrastructure is required so that everything becomes sorted out and disciplined. By using an efficient IT system, it'll be simpler to design an attractive and convenient design of the store so the customers have an outstanding shopping experience.
In order to increase the presence in international marketplaces, it is important to design a strategy relating to the marketplace requirements so that the customers are able to develop an association with the brand.
The products can be increased by targeting the middle class people. The forex market is incredibly huge and it presents various opportunities to Kmart along with the probable of reaping high amount of income.
Threats
Some of the major hazards that are posed for Kmart in the retail industry are the following:
The competition from both high end and price competitive players is increasing which is emphasizing the necessity of creating a well-designed and effective online marketing strategy.
The consumer spending vitality is lowering and they're looking for goods which are available at affordable prices but also provide them good quality options. A lot of the customers are now shifting from top quality products as the economic tough economy has impacted their throw-away income to a great degree.
As the economies of range can be savored only by the retail giants such as Wal-Mart, it can impact the profit margins of Kmart if it shifts its location in cost-effective areas.
The federal can impose more stringent regulations in the retail industry which can affect its enlargement strategy and capacity to remain competitive effectively within the market.
External Research of K-Mart
PESTEL evaluation of the US retail industry will focus on the main element factors impacting the functional activities of Kmart in its market. A brief history of the external environment of Kmart is reviewed below:
Political - Kmart's functions are greatly influenced by the US government regulations. In order to ease your competition among the main element players, it includes imposed various rules so that unfair competition can be avoided and the clients are provided goods at sensible prices. The government has also handed down the laws for lowering the consumption of single carrier plastic hand bags so that the environment is guarded from any kind of pollution.
Economical - The economy of the united states continues to be in recession phase which is visible from its economical guidelines along with increasing unemployment rate and declining consumer spending electric power. However, the demand of grocery store market products is inelastic due to the fact that folks have to buy them for daily nourishment needs; there is certain budget restrictions that impact the quantity of the goods purchased.
Social - The families are the primary target market of US discount string stores as they would like to provide them a program for purchasing everyday items of their limited budget. Majority of individuals are changing their lifestyle patterns because they are becoming mindful about eating a healthy and well-balanced diet. Kmart can stay one step prior to the social requirements of the customers and unveiling the "Eat Smart" range of products.
Technological - All of the businesses in US are making heavy ventures in their technical system so that they gain competitive edge within the respective industry. The online shopping pattern is gaining immense importance as the majority of the consumers are using Internet for shopping the goods online. Kmart has developed the website such that it can meet the demands of the customers effectively and provide them convenient shopping experience.
Environmental - As the environment's safeguard is becoming an essential requirement of every organization, the retail stores are minimizing the carbon footprints on the surroundings by version of the lasting and eco-friendly techniques. Kmart has even carried out steps for the reduced amount of carbon footprints and has substituted the carrier totes with the reusable bags so that the recycling strategy can be emphasized.
Legal - Kmart has to ensure compliance with the legal regulations so that it can ensure that it conducts its business activities within the legal framework. Some of the legislations which have to be strictly followed as Least Wages Act, Equivalent Employment Opportunity Take action and Health and Safety at Work so the employees are given a conducive working environment.
Action Plan
In order to bolster its position in the discount store category, Kmart can take on following initiatives:
The main thing required is to build up an efficient source string management system such that it can form its competency in this field. Wal-Mart has been supplying difficult competition to the store because of its skillful logistics system. The organization can seek assistance from IBM who'll ensure that the most versatile and progressive system is integrated for the powerful performance of the store.
The layouts of the stores need to be changed so the customers can have a wonderful shopping experience. Kmart must improve the product offerings by adding organic food options as the consumers are becoming conscious about living a healthy lifestyle. It can even start its private labels after conditioning its brand image in about 2 yrs time.
In order to eliminate the bad reputation of the brand, it will develop collaborations with NGOs and actively take part in community related tasks. It'll show that the business is concerned about the advantages of the contemporary society and ensure that it does not break the trust of its devoted customers.
Finally, it must revamp its marketing strategy by emphasizing that it is targeting both upper and middle income customers. In order to reach the customers properly, Kmart must use online multimedia tools such as SEO websites, sociable networking sites and offering various marketing promotions on its own website.
Conclusion
Hence, Kmart has to fortify its position in the discount chain store market by commencing various initiatives. The most crucial aspects that have to be attended to by the business are development of highly integrated supply string system, designing a highly effective marketing strategy, widening the product offerings with the addition of organic foods and redesigning the store design to supply the customers with a convenient shopping experience. Therefore, Kmart should ensure it assesses its performance on regular basis so that it can enhance its performance in the rough and ever before changing business environment.
