Strategic Plan for a Company Term Paper

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Kmart-Strategy

Kmart was the second largest retail chain in the United States before it announced bankruptcy in the early part of the 2002. But while for some it may have appeared as the biggest blow to the country's already waning economy, economic analysts were not exactly surprised that KMART had filed for 'chapter 11' protection. This is because the company had been encountering several problems since past many years and despite its numerous measures had been unable to fight with the other two retail giants i.e. Wal-Mart and Target. It is important to understand that Kmart would have never immersed itself in such deep waters, if it had not tried to compete with its rivals using their strategies. In other words it was extremely important for the chain to develop a strategy that was not only different from its competitors' but was based on the core niche of the company.

OLD STRATEGY

In the early days, it was clear that Kmart was emerging as the biggest retail giant in the United States. It was because in the year 1987, the company enjoyed a great customer base, a very strong product line and its sales were soaring, it was clear that some of its strategies in the past were then paying off. The greatest strength lied in the fact that Kmart was competing in the urban areas and thus had little chance of an active competition. Secondly it was one store where every person was likely to get what he wanted and this gave it advantage over other similar chains.

The biggest flaw of the company strategy lied in its competition techniques and in its inability to adapt to change. The company had no idea what to focus on because it never really tried to carve a niche for itself in the retail industry. What happens then is that companies lose focus and direction and thus start incorporating all sorts of foolish unproductive ideas in the company's strategy even when it is clear that these ideas are not exactly suitable.

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For example WALMART has its own niche in the industry, it is and will always be recognized as the "Low prices always" king whereas Target will always be a trendsetter and will be known for its style. But Kmart, a king of what? This is where the identity problem sets in, as people do not know what should Kmart be associated with.

With rapidly changing retail industry and with the entry of new players, Kmart was suddenly faced with some tough competition, which it was not yet prepared for. For example the store that was considered the great retail chain in the United States in 1987 was soon taken over by Wal-Mart which only became the most influential chain in the retail industry in 1991 but also managed to retain that status for several years to come. For some odd reason Kmart totally lost its focus when it came to competition even when its own internal strategies were working perfectly well at least before the 90s decade. The changing retail industry was the greatest threat for which Kmart had been unable to prepare itself and this resulted in the sudden collapse of the giant in the 1990s.

NEW STRATEGY RECOMMENDATIONS

Kmart should solve its identity crisis

As it has already been mentioned, Kmart required a complete identity change or better, it needs an identity to being with. Companies like Wal-Mart and Target have always overshadowed Kmart as it was crunched between pricing and style of the two giants. There was no way Kmart could succeed without finding a niche for itself. It is therefore extremely important for the company to first find its strengths and know exactly where….....

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