Competitive Strategies
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Foluso Balogun
Strayer University
BUS 508 – Contemporary Business
Assignment 2 – Competitive Strategies
Leonardo R Serrano PhD
October 19, 2013
“The “culture” of a corporation powerfully influences its performance for better or for worse”. (Kotter and Heskett, 2011) also, “No two organizations are the same” (Henn, S.K. 2009, p. 137). “In 1962, Walmart, Target and Kmart each opened its first discount stores. The first Kmart was in Troy, Michigan, first Target was in Roseville, Minnesota and the first Walmart was in Rogers, Arkansas. Target and Kmart were discount store format of major retailers; hence, both had access to funds, and were able to expand rapidly. Walmart was the discount format of Sam Walton, a small town merchant who lacked financial backing, which made Walmart expansion slow in the 1960s. By the beginning of the twenty first century, the position of the discount chains changed dramatically. While Walmart and Target continue to increase their number of stores and sales volume, Kmart sales volume and number of stores declined”. (Graff, 2006). However, as of today, Kmart has stores in Puerto Rico, US virgin Islands and Guam (which houses the world largest Kmart).
This paper will determine how Walmart corporate culture differs from Kmart and Target. It will also analyze three ways that each unique culture has benefitted by the others competition; speculate how each would continue to thrive if its current corporate culture would need to change in the near future. I will state what changes I am speculating on and what led me to identify the possibility.
How Kmart corporate culture differs from Walmart and Target.
Price and cost control: Kmart lacks a unique brand identity; it offers discount-pricing hoping to attract customers for a set period. (Boone & Kurtz, 2012, p. 454). Kmart offer seasonal discounts. Walmart purpose is “Everyday Low Prices that offers the customer a better deal and save on merchandising and advertising cost”. (Stalk, Evans, & Shulman, 1992, p. 3). Target offers quality product and value at a reduced price.
Ethics: Walmart requires that all its suppliers use recycled and non-toxic materials whenever possible. Walmart pursued three sustainability goals: “To use only renewable energy sources, to recycle all of its waste, to sell product that sustain people and the environment” (Boone and Kurtz, 2012, p. 38). Kmart ethical standard of honesty and integrity direct towards its employee. Target believe in supplier diversity. They encourage minority and women owned vendor and supplier and have given 5% of its income in health and sustainability of the communities.
Target Scope: Walmart targets the blue-collar clientele, which is the low-income group. Target has focused on the middle class clientele. Kmart “Lacked a strategic approach, did not assess its strengths to determine where it wanted to be as a brand”. (Turner, 2003, p. 14). Kmart targets clientele between Walmart and Target income segments. (Turner, 2003, p. 47). Kmart is stuck in the middle. (Porter, 1980).
Trust: Kmart lacked the culture of trust. Customers are often annoyed with items advertised as discounts, but are not available at the store when they go to purchase them. Meanwhile, Walmart built a reputation of trust by relentlessly focusing on satisfying customer needs by providing customer access to goods, always making these goods available when and where customers want them. Target built a reputation of trust by price matching and an additional 5% savings when guest shop using its Red card.
Vision and Mission: Kmart lack a vision and mission statement, suffer from inconsistent management, and therefore could not turn the founders visions into reality. Gelphman noted, “Kmart did not move beyond its original vision”. (Turner, 2003, p. 14). Walmarts management adhered consistently to Sam Waltons original vision for Walmart, “Save money, live better”. Targets mission is to deliver outstanding value by fulfilling its “Expect more, Pay Less” brand promise.
Customer Service: “Kmart lack a commitment to customers, associates do not respond to customer complaint”. (Kotter and Heskett, 2011), therefore, are not reaping the benefit of repeat business. They lack motivated, productive, courteous, helpful and stable workforce. “Walmart inspires his employees and molds a culture of service excellence; the greeters who welcome customers at the door; the motivational power of allowing employees to own part of the business”. (Stalk, Evans, & Shulman, 1992, p. 58). Targets team is its greatest asset; fun, fast and friendly, they invest in the growth and development of team members and are committed to building a team that does the right thing for the community, shareholders and guests. Walmart and Target presents a workforce dedicated to fostering strong ties with customers and partners and solving customer problems.
Innovation: Kmart did not make replenishing inventory the centerpiece of its competitive strategy. Kmarts automated inventory control not at per with Walmart and Target, which leaves Kmart understocked. Walmart mastered this area, thus becoming a technological leader in inventory management. Walmart scan every item purchased and store in a database. This directs the store to replenish these items. Target believes that when design works, it satisfy a need, therefore, Target makes good design accessible to all.
Outlook: Kmart presents stores that looks tired and an image that seems outdated, this discourage customers from shopping in the stores. In addition, associates are not neatly and uniformly dressed, they do not wear nametags and designation at all times. Walmart and Target maintain and upgrade its stores building bigger stores. Walmart associates are neatly dressed uniformly in royal blue polo shirt over brown khaki pants and black covered boots. Employees always have their nametags and designation on at all times. Targets associates wear red and brown khaki with their nametags no matter what level they are, they present fast, fun and friendly atmosphere in stores.
Rituals: Walmart recognizes associates from each country who demonstrate integrity and inspires others to do the right thing by giving “The Integrity in Action Award”. Votes come in from around the world to decide the recipients. Target sponsor yearly the Reaching out MBA (ROMBA) Conference a non-partisan organization. The event