Kmart/Sears Case Analysis

1263 Words3 Pages

In 1897 Sebastian Spering Kresge opened five-dime stores in Memphis and Detroit with John McCrorey as his partner. Two years later the partnership broke up and each person kept one city. Mr. Kresge kept the Detroit store and began expanding from there onward. In 1912 the company became incorporated as S.S. Kresge and was the 2nd largest dime store chain with 85 stores and annual sales of more than $10 million. In 1918 S.S Kresge was listed on the New York Stock Exchange. Throughout the decades, Kresge rapidly expanded eventually opening the first Kmart store in 1962 in Garden City, Michigan. By 1966 there were more 160 Kmart stores in the US and Canada. In 1968 Kmart began airing TV commercials. In the 1970s, Kmart continued to expand opening 270 stores in 1976 alone. In 1977, S.S. Kresge changed its name to Kmart because 95% of its sales were coming from that branch. In the 1980s and early 90s, Kmart diversified by adding other retailers such as Walden Book Company which was the number one bookstore chain in the US. The Sports Authority in 1990, 90% stake in OfficeMax and the Borders bookstore in 1992. Also in 1990 Kmart opened its first Kmart Super Center in Medina, Ohio. Whatever was left of the Kresge locations in the US was sold to S.S. Kresge's former partner's store chain McCrory's. Between 1994 and 1995 earnings began to fall for Kmart causing them to sell off their other operations, OfficeMax, The Sports Authority, PACE, Borders and its US automotive service Centers. Also in that time period, more than 200 US stores were closed. Fast forwarding to the future, Kmart launched www.bluelight.com which is now known as www.kmart.com in 1999. In 2002 Kmart filed for Chapter 11 Bankruptcy which was the biggest retail bankruptcy i... ... middle of paper ... ... Our Strategic Issue for SHC is, "How can Sears Holdings Corporation strengthen Kmart's position and regain its competitive advantage? Our recommendations are as follows: 1. Differentiation Strategy: Appeal to low and middle income families with children, Quality clothing and decorating store. 2. Stable & Effective Management: Retention, Value Chain Analysis: Supply Chain, Inventory Control (Product Selection), Technology (Reserve), Overall Consistency, Continue Value Adding Strategic Alliances, Similar to alliance with Joe Boxer. 3. Continue to Evaluate Store Portfolio, Focus on owning more/ Premium space. 4. Meet Customer Expectations, Customer Service, and Continuous Research & Development.

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