Kmart Corporate Strategy Essay

3187 Words Apr 5th, 2007 13 Pages
Historical Background
Kmart started off as a discount retailer successfully pioneering the same concept as that of F. W. Woolworth. As stores began to grow and diversify, Kmart stepped in and took the lead role in offering a one-stop shopping center that fulfilled everyone's needs. As new niches began to emerge offering larger, more specialized stores, Kmart hit a major hurdle. The successful management strategies it had developed early on were now outdated and in major need of being renovated to coincide with changing market place and customer values. As Kmart attempted to revolutionize its image and infrastructure, stores such as Target and Wal-Mart took over as the leaders in the discount retailer arena. As Kmart's image began to sink
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Kmart will need to redefine and re-establish their relative position in the marketplace by increasing brand awareness and the quality of their customer service. Updating their stores with newer, more modern appearances and conveniences that make that an easier task will require substantial investment.

Internal Functional Analysis (using appropriate ratios and DuPont Analysis)
The Kmart Corporation is setup as a top down structure. Only recently did Kmart implement a technology infrastructure that would allow them to track and order inventory. Kmart headquarters is responsible for monitoring all inventory, ordering and shipping for each store. Senior management is accessible to all store managers, but all key decisions are being made at headquarters.
Stores are designed and stocked to be the same across the board. Changes tend to be very broad in scope with little attention to specific market being served by certain stores.
Continually look to inside guidance for evaluating Kmart process and policy along with tracking market trends and new opportunities.
With the bankruptcy filing, the majority of the senior management team has been replaced. Many of these new employees have worked to successfully resurrect other bankrupt companies and return them to profitable states.
Management has tended to be reactive rather than proactive. The initiative for research and rethinking management strategies has developed when

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