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Kmart's mission statement is as follows: Kmart will become the discount store of choice for low and middle income households by satisfying their routine and seasonal shopping needs as well as or better than the competition. They are basically saying that they are to become the store of choice for all shopping needs. As stated by Charles Conaway, K-mart CEO, the ultimate vision of K-mart in the minds of people must be making Kmart the authority for moms, home and kids. In order to accomplish this, Conaway charges his executives with the goal of "pumping new life into tired apparel lines, " such as the Jaclyn Smith and Kathy Ireland labels, and add more exclusive brands like Martha Stewart. (Business Week, February 4, 2002) c. Strategies and Policies Kmart's corporate level strategy is one of a single business. They are concentrating on the discount and general merchandise retailing industry.
They are doing what they know best as a company since it was started as a discount retail store back in 1899. Kmart is investing greatly in all of their resources to become the market leader in their industry, which is currently occupied by Wal-Mart. The downfall for Kmart pursuing this strategy is that they are losing out on opportunities that other retail chains are capitalizing on. These opportunities will be mentioned later.
Kmart, although they are generally considered a single business, is starting to focus on strategic alliances with suppliers, other retail chains, etc. Eleven of the worlds leading retailers, including Kmart, have formed a collaborative partnership to establish the Worldwide Retail Exchange. This new web-based business-to-business exchange is designed to facilitate and simplify trading between retailers and over 100, 000 suppliers, partners and distributors. Some of the participants include CVS, Kmart, Safeway, Inc and Target. This is a great alliance for all of these companies since it will provide the means for auctioning products and services between retailers and suppliers. Utilizing this Worldwide Exchange will reap many benefits for Kmart and the other participants yet there are other strategic aspects that Kmart should pay attention to.
Wal-Mart uses JIT systems to replenish the stock in its stores at least twice a week, while Kmart replenishes its stock every two weeks. Now compared to Kmart, Wal-Mart can maintain the same service levels with one-fourth the inventory investment, which is a major source of cost saving. Kmart has a multi-divisional corporate structure. There is the Chief Executive Officer, Charles C. Conaway, the corporate headquarters staff, and the different divisions with their different structures. The purchasing division has their own way of doing their job as does the new product line division.
They chose this corporate structure because they can control the spending and profits for each division more easily than any other structure. Kmart's generic business level strategy is differentiation. The reason is that they must provide their products at the lowest possible cost, as does their competitor Wal-Mart, while appealing to every customer type. All of their products are popular national brands and exclusive private label brands. They are developing strong and prominent private label brands to increase the mix of high frequency items, providing a better merchandise assortment while ensuring competitive prices.
Strategic vendor alliances with some of the nations strongest, most popular brands have enabled Kmart to expand its merchandise assortment and offer customers better value. Some of Kmart's private brands include Kathy Ireland Martha Stewart Everyday, Penske Car Care, Sesame Street, Thom Mc An and White-Westinghouse. The Martha Stewart line of products is key to Kmart's success.
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Research essay sample on Wal Mart Martha Stewart
