Kmart: The Learning Curve Over Term Paper

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Wal-Mart will also adjust itself to the economic environment in order to remain competitive. After 9/11 Wal-Mart recognized a change in consumer spending at their stores and adjusted prices to reflect this trend. Wal-mart understood "the consumer need of a breather at the start of s long-awaited consumer spending recession." What did his business philosophy, model for business success over the long-range and subsequent adjustments due to consumer trends amount to for Wal-Mart? This last Christmas seasonal shopping remained promising when compared to 2003 but still did not meet analysts' forecasts. When in this challenging economic state, Wal-Mart to be successful because of "a late surge in shopping and use of gift cards -- which estimated to make up 8% of holiday sales this year -- after Christmas resulted in solid, if unspectacular, sales." In comparison, Kmart "stores open at least a year fell 4.6% in the November-December period."v

Learning Curve

What can Kmart stand to learn from Wal-Mart in light of its new merger with Sears? It is clear that this is Kmart's chance to reinvent itself and persuade the public to believe in their way of doing business. Kmart needs a complete revamping of its brand, the stores and its customer service because it's that simple. Without customers and their loyalty, there would be no stores. Yes, price plays a role but it's the immediacy of product that is number one for the customer. Kmart needs to restructure its process of providing inventory and devise a way to make it cost effective. In this regard, using Wal-Mart's model of tracking inventory from the distribution center to the hub, then to shelf and out the door; would substantially improve Kmart's image. Investing the time and resources in remodeling its stores and making the stores it already has top-notch will also add to their edge. Still once this is done, continued upkeep and organization is key. Presentation is everything in retail. Kmart could also learn from Wal-Mart's top-notch customer service and use of flexibility. By having happier employees, who have received proper training and knowledge, this reflects down to the customer. Another thing is Kmart needs to stop flaunting its discounts and focus on the quality of their products. This will drive customers to the stores and create consumer confidence.

Conclusion

With respect to the Kmart-Sears merger, the jury is still out on rather or not this idea will succeed.

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By combining the two stores, there is product diversification and new locations as a result. Susan Chandler writes, by putting "Kmart and Sears together, you're putting two broken business models together" and the only positive coming out of the deal is real estate and exposure for Sears outside of the mall. It will be interesting to see how the two companies take their individual strengths and use them to outweigh their weaknesses. It is suspected that neither company will remain in the years to come but a combination of the two will remain intact as a better shopping experience for customers. One name will fade away and because Kmart is already established as a discount retailer, do not be surprised if Sears disappears. In this respect, Kmart has been smart to invest in Sears because they are finally seeing the big picture of ultimate retail evolution. "The merger should help the new company compete against Wal-Mart, as well as Home Depot" and this serves as an excellent strategic move for Kmart's future.

Dixon J. 2003 Jan 15. Kmart Pins Survival on Staggering Cuts. Detroit Free Press

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About Kmart, Corporate History. 2005 Jan 10. Kmartcorp.com. Available at http://www.kmartcorp.com/corp/story/general/corporate_history.stm. Accessed 2005 Jan 10.

The Story of Wal-Mart. 2005 Jan 10. Walmartstores.com. Available at http://www.walmartstores.com/wmstore/wmstores/Mainabout.jsp?BV_SessionID=@@@@1774239062.1105368586@@@@&BV_EngineID=cccjadcmjgijheicfkfcfkjdgoodglh.0&pagetype=about&categoryOID=-10630&catID=-8242&subCatOID=-10396&template=DisplayAllContents.jsp. Accessed 2005 Jan 10.

Delong. 2003 Nov 13. Forbes.com: Wal-Mart dumps cold water on U.S. economic bulls.

Strange Third Quarter News From WalMart. Available from: ht tp:/ / www.j-bradford-delong.net/movable_type/2003_archives/002718.html. Accessed 2005 Jan 7.

Shoppers Brighten Wal-Mart's Post Christmas New. 2005 Jan 3. USA Today. Available from: http:usatoday.printthis.clickability.com/pt/cpt?action=cpt&title=USATODAY.COM+-+Shoppers+brighten+Wal-Mart%27stpost-Christmasnews&expire=&urlID=12758. Accessed 2005 Jan 3.

Chandler S. 2004 Nov 18. Will Bigger Be Better. Chicago Tribune Online Edition. Available at http://www.chicagotribune.com/business/ch1-0411180366nov18,1,607

0450.printstory7ctrack-3&csct-true. Accessed 2005 Jan 7.

Bhatnagar P. 2004 Nov 17. The Kmart-Sears Deal. CNN Money. Available at http://cnnmony.printthis.clickability.com/pt/cpt/action=cpt&title=Kmart%2C+Sears+ to+merge+int%2411B+deal+-+Nov.+17%2C+2004&expire=&until. Accessed 2005 Jan 7.

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