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Kmart has many competitive and environmental forces impacting the industry today. As all organizations do some or these forces are opportunities for them while others are threats to the organization. A few of the forces are their rivals or competitors, the substitutes that can be used, and the new entrants into the market. The main rivals among the merchandising companies are Wal-Mart, Kohls, Family Dollar and Target among many more. Wal-Mart and Target are their main rivals, this is because Wal-Mart is known for their niche as having the lowest prices and Target is known for their fashions and home furnishings both of these items Kmart tries to compete against. Also buyers see Kmart as a discount store which doesn! |t stand when other competitors have lower prices.
Kmart! |s customer service and available products are two other items that Kmart fails to be a strong competitor in against these rivals. Therefore, the rivalry among the merchandising stores is a strong competitive force in this market. Another external force that affects the market is substitutes. Substitutes are the items a customer can buy to replace the items they purchase for the same need previously. Kmart! |s competitors are able to supply goods to substitute the items they are purchasing at Kmart. Many times these items may be better quality or lower prices.
However many customers grow attached to a brand or store and in turn become loyal to that brand / store . However, a customer may only shop on the basis of price or customer service. In Kmart! |s case they do supply products that are exclusive to Kmart, for instance, Thalia So, Jaclyn Smith, Joe Boxer, Martha Stewart, and Sesame Street. This may make or break a customer which means that competition from substitutes is a moderate force in the market. For Kmart, the customers using substitutes for their product may be a tough one for them to outlive. However, there are other external forces that affect the market which may not be so difficult for them to compete in.
One of these could be the entry of new entrants or competitors in the market. Every company has to be concerned about the threats of new competitors. The cost to open a store and compete in this market is not ridiculous however with the competition being as high as it is today it would be hard to succeed unless it was a large a chain or they differentiated themselves in a way that the consumer felt the product was worth the money. For a new entrant to successfully compete against them it would take time and money to build a good company. Therefore, the threat of new entrants into the merchandising market is a low competitive force for Kmart at this time.
For Kmart there may be some great opportunities out there they could really open up the market and show the consumers this is the store they want to shop at. Kmart! |s technology has improved over the years however the high quality of technology today could make their world an entirely different place if they would invest. They could use it to account for all the products that are sold and instead of ordering the items themselves they could be directly connected to their suppliers. This would enable the supplier to know when a certain product is purchased. This in turn will allow them to send another one out to the store so the inventory of products is what the customer wants. This could cure the issues they are having with the product needed not available on the shelves.
They could also create self checkout lanes to enable more workers to be on the floor and answer questions. This could improve their customer service. They would also be able to place! yen help me! | buttons throughout the store so if a consumer is having trouble or needs assistance the employee would know right were they are to get to the customer in a satisfactory timeframe. There are so many ways Kmart could improve their stores by updating the technology. Kmart also has an opportunity to improve by implementing the research that they have completed.
Kmart has done quite a bit research to find out what needs to be done to win back their customers and if they would work on fulfilling these results they would be a better company. Not only would the company be able to solve their inventory problems but they would be able to satisfy their customers. Kmart has been going down hill for a period of time and with Wal-Mart and Target being such hard competition Kmart would be able to improve their stores and make consumers visits more pleasurable which in turn would make them want to come back again and would make Kmart more successful. On the other hand external forces are not the only items that impact the way a store should be ran.
The company has some internal forces that impact how successful the company can be as well. Kmart! |s competitive advantages and related strengths that have continued to help the company succeed are: "<< Competitive advantage: Exclusive brands "<< Strengths o Operates in 49 states o Blue Light Specials o Sell of stores after bankruptcy to boost profits o Bankruptcy will help them work better with partners to lower costs and improve merchandising o Merged with Sears Kmart! |s competitive deficiency and related weaknesses that have hurt the company are: "<< Competitive deficiency: Wal-Mart and Target are seen as bigger and better and the customers are going there to purchase products. "<< Weaknesses o Inventory management problems o Customer satisfaction problems o Kmart is having difficulty attracting customers o Justice department filed criminal indictments against two of Kmart! |s executives o Troubles differentiating themselves from their competitors o Strategy of the company is unclear to many consumers o Many of the stores need remodeling completed Kmart! |s financial status has not been great for quite some time. They have worked hard to try and make a profit. However for the past few years they have not been profitable. They have had several different management teams which some have focused on the same items as the ones before while others changed direction completely. When the company started out they were a small five and dime store.
Then they expanded into merchandise stores which continued to make them a profit however, after that started to subside they invested in other companies. While they gained and loss some money doing this the management team was not as focused as they should have been on the merchandising companies. Once Target and Wal-Mart opened their doors Kmart! |s market share was loosing interest. They are two of Kmart! |s largest competitors and to this day have made Kmart fight tooth and nail to stay alive. Kmart! |s business strategy is unclear to most consumers however as for the company they do have goals in place. At this time Kmart! |s strategy is closing down some of its more run down stores, changing their marketing campaigns and working on customer satisfaction.
In order for them to succeed they will need to complete these items and bring more consumers into their stores. This could be done by offering loyal customer advantages, coupon cards that give a customer a discount on their tenth visit to the store or even a promotional gift is received once a certain goal is achieved. They also need to focus on who their competitors are for at this time they are trying to compete against a large market and if they stopped trying to compete and focus on what they want to be known for they would win more of the market share. For instance, Kmart has started selling food items; it seems if they would focus on their exclusive brands, food would not have been brought into the picture. By getting rid of their food items they would also have more room on the shelves to stock the much more requested items that customers want. Since Kmart is up against a couple well known companies they are going to need to stand out.
They have their exclusive brands which is great if that is what the customer wants. They need to really push these items by marketing (TV spots and newspapers) so the consumer feels they need to have these items. They also need to put standards in place so that anytime research is done there is a project team put together to implement what changes need to be completed. Their strategy to win back the customer is failing because they are not implementing the needed changes. Instead they are closing down stores and not remodeling the ones that are still in business. They are loosing the market share to both Target and Wal-Mart because they are so focused on how to make another buck that they are not focusing on what really matters, the customers.
Until the customers are satisfied with the stores product (being on shelves), the service they receive and the location and shape of the stores they will not return as loyal customers to Kmart.
Free research essays on topics related to: external forces, customer satisfaction, market share, wal mart, lower prices
Research essay sample on Wal Mart External Forces
