Free Essay

K Mart

In: Business and Management

Submitted By rodbroc
Words 1119
Pages 5
Overview
Kmart is a general merchandising company. The benefit that Kmart has is that it can cater to the basic needs of any human being. Kmart has a “blue light discount” specials strategy that can water the appetite of any customer by stimulating the essence of excitement, suspense, surprise and pleasure in a customer (Sptimes). The blue light special is a system which Kmart officials randomly get o the intercom and declare the famous slogan “attention Kmart shoppers” and shine a blue light in the department of the store where there is an extreme discount. This strategy is capable of impacting any nation or culture world wide because everyone loves discounts and good surprises. Kmart earned a customer satisfaction reputation because of its blue light tradition. The way it worked was by having random store officials in different departments shine a blue light to symbolize that there has been some major cut backs (in pricing) in their specific departments. It worked to Kmart’s benefit at one point because it would cause customers to want to visit the stores more often and sometimes stay in the stores longer for shopping because of anxiousness. Usually when the blue light comes on, you would hear a representative say, on the intercom, “attention Kmart shoppers” (Wikipedia). The slogan became so popular that it even had spot lighted moments in movies.

Coming up
Kmart was one of the prime merchandising companies along side Wal-Mart and Target, but unfortunately, they had to close many shops in 1994 due to lack of positive renovations. Kmart failed to invest in computer technology and it caused them to be behind in technology advancements to keep tabs on there sales supply. The loss in revenue caused their competitors to take advantage of the competition to make it more of a one on one thing (Target versus Wal-Mart).
In 2004 Kmart declared that it would purchase Sears and change its name from Kmart to Sears. The merger benefited sears due to the fact that Kmart invested into many super centers and Kmart benefited greatly with sears due to the fact that sears invested a lot into technological niche. As a result of the merger, Kmart reported its first annual sales increase in 2005 since 2001(Funding Universe).

Environment Kmart had a very good organizational culture. Customers loved the excitement that the business had to offer and employees were very happy to be at work. Culture is the environment that surrounds you all the time at the work place and Kmart had a culture that was equally matched with Target and Wal-Mart (About.com). It’s important that when a customer walks inside of a store, that the store gives them a perfect sense of comfort for their shopping experience. Due to bad leadership, Kmart has undergone some very bad lawsuits that were related to poor judgment and customer awareness. Bad customer service usually leads to a bad company image and that translates into lawsuits (in my opinion). The one thing that caused Kmart’s culture to suffer was its storehouse keeping. Kmart had such a hard time keeping up with assets and they lost a lot of easy money due to the mismanagement. Kmart would not be able to notice if a product sat on the shelf for many years without being touched by a customer. In business, you have to consistently hold tabs on your assets to replace what is not selling. With an inability to keep up with buyer preferences, you can’t understand your customer needs.

Strength & Weaknesses

Kmart has the ability to really take a lot out of its competition if they really started to focus more on their weaknesses instead of only adding juice to their strengths. Some weaknesses that really limits Kmart includes its supply chain management, poor leadership, bankruptcy, poor store house keeping, strategy execution, lack of consistent customer service, lack of up to date technology, and a lack of appealing to the youth. Kmart does have some good qualities that should in some ways provide some momentum for them to get back into the competition such as buy power, brand awareness, Big K-Mart (supercenters), alliance with sears (technology boost), and an opportunity to have international growth. If Kmart played their cards right, they could really come back strong. It is clear that Kmart’s cultural environment is at was with itself. If you replace the leaders with people who have a servant leadership mindset, then you can really fix a lot of other small things in the company. Servant leadership and selfless leadership walk hand in hand. I would hire a selfless leader (one who puts himself in the customer’s shoes) and have him be in charge of hiring personnel. It would eradicate all of the poor housekeeping problems, keep up with buyer preferences, and make the store more customer friendly over-all. The only thing that Kmart needs to focus on is establishing a sufficient supply chain system, efficiently manage its inventory, build a stronger brand, and work on its discount system. The blue light is good, but I do not agree with letting the prices drop to the point where your company actually loses profits.

It’s clear that in today’s economic environment, businesses are looking to profit without extra spending. Merchandising companies want to increase their profits with the stores that they already have instead of having to build a lot more stores. Kmart did a terrible job of managing inventory in the stores that it already had, so building new stores wasn’t going to solve anything for them without correcting the problems in the stores it already had. Kmart needs to start by optimizing the merchandise that it already has with good technology to keep track of its stock. If customers continually see that the stock of merchandise is always finished, then customers will want their needs met at other companies. Use the technology to help management give constant feed back on what is selling so that they can make better decisions when ordering more stock.

Benefits of the merger The merger with sears really allowed Kmart to be more competitive with Target, Home Depot, and Wal-Mart (USA Today). Sears brought profits due to the massive supply chain and technological advances that it had. It’s the perfect start for Kmart to enter the international competition and make a huge mark.

Work Cited
About.com. www.humanresources.about.com/od/organizationalculture/a/culture.htm

Funding Universe. www.fundinguniverse.com/company-histories/kmart-Corporation-Company-History.html

Lieberman, David. USA Today. www.usatoday.com/money/industries/retail/2004-11-17-sears-kmart_x.htm

Sptimes. http://www.sptimes.com/2007/05/16/Business/Kmart_s_blue_light_ba.shtml

Wikepedia. http://en.wikepedia.org/wiki/kmart#Environment_record…...

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