...Kmart: A Strategy for Survival Lindsay Huston Hamilton Lee Chris Shewchuck Renee Welsh Economics of Competitive Strategy April 30, 2003 Introduction Discount retail has evolved into a highly competitive industry. As a result, discount retail pioneer Kmart, has faltered and fallen into Chapter 11 reorganization. This paper provides analysis of the industry, and a discussion of the firm-specific strategy that Kmart should undertake in order to reestablish itself as a player in the market. Relevant Industry Forces Entry Barriers Entry barriers in the discount retailer industry are high. In order to compete with the likes of Wal-Mart and Target, a company would need a minimum efficient scale to compete on cost. To Kmart’s advantage, it does benefit from a certain amount of economies of scale. The company is still the third largest retailer in the U.S. Once the restructuring plan has been implemented, Kmart plans to have 1,500 stores remaining. But Kmart has to realize, “Everybody today lives under the shadow of Wal-Mart.” 1 Kmart should not fool itself into thinking that its economies of scale in purchasing or its distribution system can compete with Wal-Mart’s. Wal-Mart is known for its expansive, powerful, and efficient inventory and distribution capabilities. It’s also known for its low-cost structure from real estate to labor (non-union). Wal-Mart is now one of the leading buyers of consumer products in the world. Wal-Mart claims it has the biggest private satellite communications...
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...side of Chicago and sales exceeded $1 billion. Sears continued to expand and offer a variety of services. It was until the early 1990s that Sears noticed a significant blow to its sales. 1992 was the start of the retail giant’s culture shift from senior management down to the hourly sales associates (Sears, 2011). A deliveryman, clerk, bookkeeper and teacher- these were all the hats worn by Sebastian S. Kresge. His ambition to succeed and his penny-pinching attitude led him to become a successful businessman. Through five and dime stores to Kmart stores, he became a millionaire. In 1966 sales topped the $1 billion mark. Kresge once said, "I think I was successful because I saved and because I heeded good advice … I worked—and I didn't work only eight hours a day, but sometimes 18 hours. When one starts at the bottom and learns to scrape, then everything becomes easy," (Sears Holdings Corporation, 2011). In 2002, with 2,114 Stores, Kmart hit financial hardship and needed to rectify the problem. The solution was to file for Chapter 11 bankruptcy...
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...When people ask me about a ‘favorite Nintendo Memory’, I often can’t come up with an answer. It’s not because I don’t have good memories in regards to Nintendo. On the contrary, I often have to stall because I can never seem to choose which one to pick. Do I talk about the first Nintendo console I played? Do I talk about the feeling of elation I had when I first beat Mega Man 5? Or perhaps when I first unwrapped my N64 with a copy of Pokemon Stadium? To me, there never has been a single moment with Nintendo that stood out above and beyond all others. How could there be when Nintendo continued to make games like Pokemon Stadium, Super Smash Bros., Fire Emblem, and Custom Robo? In many regards, Nintendo has been akin to DisneyLand to me for...
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...manufactured brands at a good discounted price. An example of this would be outlet malls with a variance of retailers offering extremely first-class discounted prices for named brand items. Conventional Retailers – Provide a service and product specific to a need. These types of retailers supply products to a target market. An example would be a tuxedo rental store. The target market would be customers who might need merchandise for a formal event such as weddings, dinner party or even a school prom. Mass-merchandising – Appeals to a larger market at lower prices in an effort to have a greater turn-over of merchandise with higher sell volumes. An example of this would be Walmarts, super stores such as Target Superstore and Super-Kmart. Due to the way things are within our economy and the affect it has on everyone including the retailers, I forecast it can go either way. Prices might come down in an...
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...Environmental Scan Paper MGT/498 December 10, 2014 Dr. Pamela Linden Environmental Scan Paper Environmental scanning plays a critical role in the strategic management planning process. The environmental scan provides important information, which may be useful in forecasting changes for the future. Environmental scanning is, “the monitoring, evaluation, and dissemination of information from the external and internal environments to key people within the organization.” (Wheelen and Hunger, Ch.4, Sec. 4.1) Managers scan the internal environment for strengths and weaknesses and the external environment for opportunities and threats. Strengths and weaknesses can be found within the company structure, as well as the employee pool. Scanning the external environment can expose the company to opportunities not yet taken advantage of by other companies. This external scan can also bring light to threats from other organizations in respect to products, services, and costs. Starbucks was founded in 1971 when the first coffee store was opened, and became the competitive company it is today when expansion began in 1987. Starbucks’ mission is “to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.” (Starbucks, Our Heritage, 2014) Internal factors affecting Starbucks’ product decisions involve environmental aspects such as where their coffee beans are farmed and the cost of those beans. If the farmers have issues with their beans, this...
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...* DAY1 * What is Sports Marketing? It depends! (IV League Schools say!) * We need to influence and Persuade! * Sponsorship “getting the bat in the hands of the right player” * IMGbiggest sports marketing agency in the world, Mark McCormick, said “it is putting a celebrity/athlete with a product/company”….and that is it. * Louis Shefield* wanted NBA basketball team in Miami (Miami Heat). He said “its easy to fill a stadium once, but each time its hard”. He saw that basketball would get bigger than it was and it needed to go to Miami. He said sports marketing is just about “Sagacity.” * Sagacity A vision for the future. Example by Louis, Nike taking swoosh off bottom of shirt and putting it on the chest. And, the only reason we know about Ted Turner is because of exposure. Active and innovate an idea. Dictionary Definition: foresight, discernment, or keen perception; ability to make good judgments. Seeing a trend and executing it! Execute your idea and fulfill what you start! * Tommy Karam Wanted to turn LSU scoreboard into a marketing opportunity by putting ads on it using triplicates (3 rotations: purple, purple and tiger stadium, then purple, tiger stadium and a company’s name). He thought this would be sagacity! He spoke with a man at Exxon and he liked Karam’s idea and Karam sold the sponsorship to Exxon for $250,000 per scoreboard (when they were going for around $300,000). Karam later found out that corporate signage is against University procedures...
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...Question #2 Economically, who benefits when retailers in Europe and the United Sates source textiles from low-wage countries such as Bangladesh? Who might lose? Do the gains outweigh the losses? * Economically, when retailers in the U.S. and Europe source textiles from low-wage countries such as Bangladesh, many parties benefit. Some of the biggest retailers such Wal-Mart or Kmart benefit a lot by having better profit margins. Costs of goods are relatively low which allow them more room to offer lower prices in goods and services. Customers benefit from this as well because prices are lower which mean they are more affordable. Another party that benefit also is low income countries in job creation and in economic. * In contrast, developed countries find disadvantages because fewer resources cause job loss in the employment market. Even though customers are able to get these items at a cheaper price, they find disadvantages in the end quality of the product. The quality of these product decline as resources are limited. * I think the gains outweigh the losses because it allows low income countries to develop and improve their standard of living. Question #3 What are the causes of the weak safety record of the Bangladesh garment industry? Do Western companies that import garments from Bangladesh bear any responsibility for what happened at the Rana Plaza and other workplace accidents? * I think the government is the cause of the weak safety record of the...
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...Samsung Electronics in a very ambitious new direction. His goal was to make Samsung become a premiere brand that would dethrone Sony as the biggest consumer electronics firm in the world. Instead of being a copycat, Samsung was to become a cutting-edge product leader. As part of Samsung’s revamped strategy and positioning, along with developing stylish and innovative new products, the company altered distribution to match. Samsung quickly abandoned low-end distributors such as Walmart and Kmart and built strong relationships with specialty retailers such as Best Buy. 2] Is Samsung’s product development process customer-centered? Team-based? Systematic? Customer-centered new-product development focuses on finding new ways to solve customer problems and to create more customer satisfying experiences. Samsung uses the product development process by using market testing. Samsung created the “Wow!” test which every new product had to pass. If the product did not pass the “Wow!” test it went straight back to the design studio. Team-based new-product development is an approach in developing new products in which various company departments work very close together and overlap the steps in the product development process to save time and increase effectiveness. Samsung uses the team-based approach when CEO Lee started the “new management” era. This strategy was utilized to make Samsung the premiere brand they wanted to be and to create a top-to-bottom...
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...Walmart from posting eleven per cent increase in sales. It has grown to become the world’s most powerful retailer in the recent past. The company has been focusing on low income earners with it stores built on warehouses that minimal décor. Walmart has been operating globally having different stores for different folks. It has penetrated into Mexico, Brazil, Argentina, Germany and United Kingdom among other nations. Walmart has been a leader in the field of technology so as to ensure maximal efficiency in operations. The store deployed its own private satellite network, and managed its logistics via a central system for all warehouses and distribution centers. The store has been ranked as the largest employer amongst the private industries back in the year 2004. This is because it hosted over one million associates in its ranks. Walmart has not been operating as a monopoly. It has had a fair share of competition in the market making it work extra hard so as to remain relevant and competent. The main competitors of Walmart are...
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...I. Abstract There are many reasons why we give gifts today for birthdays, weddings, graduations, etc. to friends and loved ones. A few reasons we give gifts is for peace, protection, love, or because of social obligations. Holiday gifting is a special occasion going back to the beginning of Christianity where the Three Wise Men brought gifts for baby Jesus. This gesture has now turned to giving gifts to our family and friends. The holiday season of 2014 is shaping up to be a prosperous year for retailers. With an estimated 4% increase in holiday sales compared to 2013 and consumer confidence is at its highest because of lower unemployment, higher wages, salaries, and disposable income. Consumers this holiday season are expected to spend approximately $804 on gifts. Along with lower gas and energy prices, consumers are more likely to spend more this holiday than the last on gifts like Disney Frozen Snow Glow Elsa Doll, Apple iPhone 6, and jewelry. Key promotions like Wal-Mart’s price matching policy, Kmart’s layaway service, USPS delivery service schedule hours expansion, the holiday season looks to be headed in a positive way. There are other ways to improve this holiday seasons like online retailers providing free shipping on all purchases or discounting newer products instead of outdated items. The holiday season will be promising! Even 2015 holiday season will be a good one as long as consumers are confident that the U.S. economy is recovering from the recession! II...
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...order): The communities of the places the new facilities were built – These people lost business of their Mom and Pop stores making many people suffer and lose jobs. While being bribed to give up locations and being manipulated into potential poverty. The customers of Wal-Mart in Mexico - The consumers who are treated as though they are being thought of, by lower prices, and marketing schemes that seem more appealing towards them, all the while being teased. Wal-Mart as a company – Not only has the company lost much business because of this brutal wrongdoing, but reputation, which in a company is most cherished. Wal-Mart will never be looked at in the same eyes as before. Competitors – Other companies such as Target and maybe even Kmart have benefited from the bribery committed by a company who, many may say is there largest competitors. Conferring to all of the ethical theories, Wal-Mart was wrong to decide to issue these bribes....
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...Business Economics GM545 Feb/2012 lynnettehamrick@yahoo.com The gas prices in my area have significantly increased within the past few weeks. I reside in Silver Spring Maryland and my Nissan Maxima requires premium fuel. The current price at Shell for premium gasoline is $3.999. I'm paying $4 a gallon for gas. Fox five dc news reported that last year around this time, the price for regular gasoline was $3.25 a gallon (http://www.Thepriceoffuel.com). The gas prices lately have not been stable and since the recession started in 2008 the gas has been fluctuating around $4 a gallon for regular oil. Gas prices fluctuate for many reasons which include the price for crude oil in the world market, supply and demand for gasoline, local competing gas stations, government regulations, and taxes. Crude oil prices are 55% of the price of gas and distribution and tax account for the remaining 45% (http://www.Thepriceoffuel.com). The demand for gas occurs around summer vacation and major holidays where motorist consume the most gas. When people drive less and use other means of transportation like, car pools, public transportation, and bicyclist, this brings the demand down. The average price in Maryland for regular gas is $3.626 compared to a month ago at $3.416. The highest gas stations in the area our in Montgomery county, where as locations like Baltimore county and Waldorf have cheaper priced gas. Another aspect of the lower prices is that these our locally...
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...Chapter 1 Mastering Strategy: Art and Science LEARNING OBJECTIVES After reading this chapter, you should be able to understand and articulate answers to the following questions: 1. What are strategic management and strategy? 2. Why does strategic management matter? 3. What elements determine firm performance? Strategic Management: A Core Concern for Apple The Opening of the Apple Store Image courtesy of Neil Bird, http://www.flickr.com/photos/nechbi/2058929337. March 2, 2011, was a huge day for Apple. The firm released its much-anticipated iPad2, a thinner and faster version of market-leading Apple’s iPad tablet device. Apple also announced that a leading publisher, Random House, had made all seventeen thousand of its books available through Apple’s iBookstore. Apple had enjoyed tremendous success for quite some time. Approximately fifteen million iPads were sold in 2010, and the price of Apple’s stock had more than tripled from early 2009 to early 2011. Saylor URL: http://www.saylor.org/books Saylor.org 4 But future success was far from guaranteed. The firm’s visionary founder Steve Jobs was battling serious health problems. Apple’s performance had suffered when an earlier health crisis had forced Jobs to step away from the company. This raised serious questions. Would Jobs have to step away again? If so, how might Apple maintain its excellent performance without its leader? Meanwhile, the iPad2 faced daunting competition. Samsung...
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...Chapter 1 - The World of Integrated Marketing Communication TRUE/FALSE 1. A company that markets a vitamin supplement produces a commercial that has the stated purpose of simply delivering straight information about the product. It is still an attempt to directly generate sales. ANS: T PTS: 1 DIF: Difficult REF: p. 6 OBJ: 1-1 2. IMC is the use of many tools, including advertising, in a coordinated manner to build and maintain brand awareness, identity, and preference. ANS: T PTS: 1 DIF: Moderate REF: p. 7 OBJ: 1-1 3. A public service announcement (PSA) for the Partnership for a Drug Free America is aired on three major television networks for free. This is an example of a public information message, not advertising. ANS: T PTS: 1 DIF: Moderate REF: p. 6 OBJ: 1-1 4. Mass communication has two major components: production and reception. ANS: T PTS: 1 DIF: Easy REF: p. 8 OBJ: 1-2 5. The communication production process produces the content of all advertising messages. The communication reception process produces the same interpretations among all audience members. ANS: F PTS: 1 DIF: Difficult REF: p. 9 OBJ: 1-2 6. A target audience is the whole group of consumers that will see an advertisement or an advertising campaign. ANS: F PTS: 1 DIF: Easy REF: p. 10 OBJ: 1-3 7. When trying to deliver an advertising message to a professional audience, the medium of trade journals is most predominantly used. ANS: T PTS: 1 DIF: Difficult...
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...Why do organisations need change? Table of contents Introduction Why do organisations need change Environmental pressures for change The promotion of innovative change Innovation and change case examples Recommendations Conclusions Annex 1 - Defining the Four Antecedent Processors 3 4 6 10 11 14 16 17 2 Introduction This report sets out to explain why organisations need change. Faced with dynamic economies and increased competition, more and more companies are struggling to establish dominance, gain market share, and in some cases, ensure their survival. Management must understand that the key to competitive success is to change the way the organisation functions. To assist in the need to change proposition theoretical frameworks and tools will used with supporting case examples to better illustrate why organisations need change. 3 Why do organisations need change? Organisations need change for a wide range of reasons. Organisations are never perfect and should be constantly changing to make themselves into significantly better companies (Porter 2005 ; Thompson et al. 2010). For example working practices may need updating to gain efficiencies, staff skills may need improving, customer service response times could be shortened, customers demanding a product or service you do not currently provide, new technology may produce improvements in efficiency, costs could be reduced, innovative new products may be possible to increase revenues and profit. This is by no means an...
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