Kmart Case Study. To This Essay

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First, the company needs to determine who they are -- what their mission is. If they want to be a low-cost leader and compete head-to-head with WalMart, increasing their economies of scale is critical. However, I don't think this is truly feasible. Instead, I would suggest that they find a way to differentiate themselves from WalMart, much like Target did. They attempted a very similar approach with hiring Martha Stewart and Joe Boxer, but these names were not powerful enough to pull the entire company through the financial trouble they were in and rebuild the Kmart name. For this reason, they need to discover a different mode of attack -- something that Target and WalMart don't offer.

With their merger with Sears, I would suggest that they keep the brands and strategies separate, but utilize whatever economies of scale they can manage from the merger. Kmart could utilize the electronics buying power of Sears and become a low-cost department/grocery store, as they are, but who specialize in electronics. Although Target and WalMart both offer electronics, if Kmart were to offer well-trained and helpful employees, much like you'd find at a store that solely sells electronics, this would give them a significant advantage.

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Sears has a similar unique advantage still in place that they simply need to capitalize on -- knowledgeable employees. Although stores like Home Depot and Lowe's are taking away from Sears hard goods sales, Sears needs to market their employees' ability to help customers make the right purchase, and the Sears support that follows after the purchase. Too often employees at the other stores work in multiple departments and may not be true appliance specialists. Sears can capitalize on this. In addition, Sears still has considerable value in the Craftsman brand name, for their tools. By keeping the companies separate, they'll be able to take advantage of opportunities presented with the merger, but still keep the advantages they already have in place.

Conclusion:

In the end, only time will tell if Kmart will be able to compete against powerhouses like WalMart and Target. These two companies especially have developed very effective competitive strategies. However, the Sears merger offers new opportunities for Kmart that, if utilized correctly, could help ensure they remain a contender in a very competitive industry......

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