Industry Analysis Report on KmartEssay title: Industry Analysis Report on KmartINDUSTRY ANALYSIS REPORTIndustry Analysis Report on KmartINTRODUCTIONKmart 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 Kmarts 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.
HISTORYOver 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 1990s, 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.
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Kmart has a lot to prove. The company already has 40 million subscribers to its network, at a price. In 2011 it sold more than 200,000 square feet of the headquarters, retail and business office space and about 25,000 square feet on the city’s Eastside in New York City. Kmart has been the biggest tenant in New York City since 1969. For the first time in history, Kmart will be able to expand online, offering retail and restaurant service on an increased scale than it did within its parent company, Borders, which brought home over 1.2 million square feet for sale in 2016. The largest opening was in 2013 with 20,000 square feet and 10,000 square feet a week, Kmart began to offer its own “new” branded product line that was created in January, 2015. During that time, Borders began to expand into a “more traditional” line of branded apparel, furniture, accessories, and even appliances with a 50% increase in retail space and higher end services, like digital customer service. This changed Kmart’s strategy after its $500 million sale of the K-mart chain. The K-mart brand began offering more online and at-home kiosks as its stores opened in July, 2017, so far. This made Kmart the #1 consumer retailer in the US for most of the year with 2 million members. Kmart will be able to offer a wide assortment of specialty and home-shop items, from handcrafted jewelry to jewelry for the first time with a 2 year “retail-only” warranty, to hand crafted clothing and accessories directly from Kmart stores. The K-mart brand’s online offerings include “Fashion Design” for Kmart’s major retailers “Hands-On” for Kmart’s brands and “Shop Now” for Kmart’s online stores. The brand also has a “Finance & Finance” section for Kmart’s financial advisers, with a section for Kmart’s senior executives, senior managers, stockholders, directors, analysts and other stakeholders. All things considered, each of Kmart’s major competitors has the potential to open new stores and have a lot more of an online presence if the growth of Kmart and Borders continues.
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In 2014 the company also opened offices in New York City and Chicago. Now it’s home to over 1,300 stores that have a total of 16 million square feet and more than 35,000 customers every week. The brand has more than 4 million members and customers, for example, love the convenience of Kmart’s restaurants and bars. It has partnered with over 30 restaurants in more than 130 countries and brands the world over including “Kangaroo Club”, “Fresh Fish”, “Cheeseburger, K-Mart Style”, “Paleo Taco”, “Burger King”, “Hot Dog”, “Lucky K”, “NUTS”, “Grammy”, “Supernova Cafe”, “Superstar”, “The King”, “Beats”, “Dagots”, “Dinner Style Chips”, “T-Shirts”, “Porky”, “Cars” and more – the list goes on. It’s a little surprising that as other companies launch new restaurants and the popularity of new products expands, so does profit, but it also means that these new companies can expand while still keeping costs down.
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In 2015 the company expanded into New York City. Now it’s home to over 1,300 stores that have a total of 16 million square feet and more than 35,000 customers annually. It has also partnered with over 30 restaurants in over 130 countries and brands the world over including “K
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Kmart has a lot to prove. The company already has 40 million subscribers to its network, at a price. In 2011 it sold more than 200,000 square feet of the headquarters, retail and business office space and about 25,000 square feet on the city’s Eastside in New York City. Kmart has been the biggest tenant in New York City since 1969. For the first time in history, Kmart will be able to expand online, offering retail and restaurant service on an increased scale than it did within its parent company, Borders, which brought home over 1.2 million square feet for sale in 2016. The largest opening was in 2013 with 20,000 square feet and 10,000 square feet a week, Kmart began to offer its own “new” branded product line that was created in January, 2015. During that time, Borders began to expand into a “more traditional” line of branded apparel, furniture, accessories, and even appliances with a 50% increase in retail space and higher end services, like digital customer service. This changed Kmart’s strategy after its $500 million sale of the K-mart chain. The K-mart brand began offering more online and at-home kiosks as its stores opened in July, 2017, so far. This made Kmart the #1 consumer retailer in the US for most of the year with 2 million members. Kmart will be able to offer a wide assortment of specialty and home-shop items, from handcrafted jewelry to jewelry for the first time with a 2 year “retail-only” warranty, to hand crafted clothing and accessories directly from Kmart stores. The K-mart brand’s online offerings include “Fashion Design” for Kmart’s major retailers “Hands-On” for Kmart’s brands and “Shop Now” for Kmart’s online stores. The brand also has a “Finance & Finance” section for Kmart’s financial advisers, with a section for Kmart’s senior executives, senior managers, stockholders, directors, analysts and other stakeholders. All things considered, each of Kmart’s major competitors has the potential to open new stores and have a lot more of an online presence if the growth of Kmart and Borders continues.
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In 2014 the company also opened offices in New York City and Chicago. Now it’s home to over 1,300 stores that have a total of 16 million square feet and more than 35,000 customers every week. The brand has more than 4 million members and customers, for example, love the convenience of Kmart’s restaurants and bars. It has partnered with over 30 restaurants in more than 130 countries and brands the world over including “Kangaroo Club”, “Fresh Fish”, “Cheeseburger, K-Mart Style”, “Paleo Taco”, “Burger King”, “Hot Dog”, “Lucky K”, “NUTS”, “Grammy”, “Supernova Cafe”, “Superstar”, “The King”, “Beats”, “Dagots”, “Dinner Style Chips”, “T-Shirts”, “Porky”, “Cars” and more – the list goes on. It’s a little surprising that as other companies launch new restaurants and the popularity of new products expands, so does profit, but it also means that these new companies can expand while still keeping costs down.
Larger:
In 2015 the company expanded into New York City. Now it’s home to over 1,300 stores that have a total of 16 million square feet and more than 35,000 customers annually. It has also partnered with over 30 restaurants in over 130 countries and brands the world over including “K
COMPETITORSKmart filed for bankruptcy protection, once the largest retailer ever to do so in U.S. history. Most industry analysts believe the cause of the companys bankruptcy filing was due to stiff competition from WalMart, Target, and lack of marketing strategies. Besides, when WalMart and Target predictably entered into Kmarts 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 Kmarts consistent poor performance. Another reason is that Kmarts never had a marketing strategy. Kmart needs a structure to guide its decisions in pursuit of performance objectives.
MARKETING STRATEGYIn the past, Kmart depended on the focus of expanding into rural areas where other retailers did not go. They should have focused on just being in the market, as well as protecting its geographic advantages. Nevertheless, the company continued to open new stores and bought several specialty chains, including sporting goods, office supplies, and bookstores. While buying all these specialty chains, conditions at their existing locations declined in cleanliness, service quality, and the selection of merchandise all became problems.
The marketing strategies Kmart made in an attempt to recapture market share in the 1990s proved to be unrelated and secluded events. Their first strategy consisted of converting all Kmart stores to the “Big Kmart”. Big Kmarts format was larger, brighter, and the stores had more categories of merchandise. Kmart also decided to sign an exclusive deal to distribute Martha Stewarts line of products, bed and bath fashions and house paints created by Martha Stewart, the famous home and garden icon. Inevitably, the same inventory and service problems continued. Unless you have to own Martha Stewart products there still is no reason to go to Kmart.
Most recently, Kmart started to drop its prices and develop advertisements to promote the price cuts. Kmart also brought back the Blue light special, a once popular reward program for Kmart shoppers to unexpectedly save on select items. Even though Kmart had these great deals, their competitors had the advantage in the low price game, responding with further cuts Kmart could not beat later leading into legal battles and struggles
LEGAL STRUGGLESKmarts legal battles