Kmart Vs Wal-Mart free essay sample

This analysis of the two business mentioned above will describe the success and failure for the companies. I have included a SWOT analysis of Kmart and Wal-Mart, and it includes a cross-case analysis of the two companies. This two chains were very similar in many ways including, looking very similar, the prices were very low, sold the same kind of products with the same kind of quality, then, why is Kmart gone? And why Wal-Mart keeps getting stronger? Kmart Kmart was a chain of store discount department in the USA, Virgin Islands, Puerto Rico, and Guam. There is Kmart stores also in Australia and New Zealand although the stores have no relation to the stores in the USA. Mission Statement We are committed to improving the lives of our customers by providing quality services, products and solutions that earn their trust and build lifetime relationships. Kmart SWOT Analysis Strengths -Strong store name brand -Loyal customers -Great customer service -Good efficiency on it’s supply chain -Their operational margin was two times the average of supermarkets -Great food quality (perishables) -Huge variety on products -Great employee benefits and good compensation policy Weaknesses -Grocery store was too big to look for things -Expensive prepared food -Not too many locations -Being a private ownership store limits store expansion due to capital Opportunities -More locations -Develop private labels -Growth in higher margins Threats -Competitors like Wal-Mart and Target -Inability to absorb price increases due to smaller scale vs other competitors -Economic down turn affecting the customers economic status Kmart Strategy The strategy that Kmart tried to set in place was working closely with their marketing and merchandising departments, there was also a huge investment in television campaigns and glamorous representatives such as Jaclyn Smith, (former Charlie’s Angels) who has her own line of cloths for Kmart. So, in other words, Kmart strategy consisted mostly in advertising and remodeling their stores. Kmart did not adapt to changes in the marketplace, this was one of the reasons that Kmart had to go to the bankruptcy in addition to that, Kmart had a series of bad management decisions. The business community could not understand why such a great store name like Kmart company could have been completely devaluated. Wal-Mart At the beginnings of Wal-Mart, Sam never thought that he could compete with a store as big as Kmart. Kmart was way ahead of the game, it had almost the double of stores than Wal-Mart where Kmart had 2,223 discount stores Wal-Mart had 1,198. While Kmart sales were $25. 63 billion, while Wal-Mart had $15. 96 billion. Big red â€Å"K† logo had great visibility for advertising in addition to that its large urban presence. Although Wal-Mart had a more consistent record of earnings and revenue growth, in the eyes of many experts it had never played in the major leagues. Unlike Kmart, whose stores sat on expensive urban real estate and competed against other big discounters, Wal-Mart sat in pastures outside small towns and picked off the customers of aging mom-and-pop shops. To present time Wal-Mart Stores operates numerous retail store formats in Argentina, Brazil, Canada, Chile, China, Costa Rica, El Salvador, Guatemala, Honduras, India, Japan, Mexico, Nicaragua, Puerto Rico, and the UK. Mission Statement We help people save money so they can live better. Wal-Mart SWOT Analysis Strengths -A market leader like no other -It is the largest discount store in the world -Low cost retail store -International Weaknesses -Have not been able to penetrate metropolitan areas in the US -It has over 60 wage-hour class lawsuits Opportunities -Take the retail store leadership in China and India -having variety of food and organic food could bring more revenue due to the fact that people are getting healthier every day and looking for fresh organic food. -Emphasize on the internet sales to be able to grow even more and quicker Threats -Too many employees like Wal-Mart has it increases the cost in health and insurance payments -Volatility in prices, cost inflation and rapid changes -Resistance from the competitors Wal-Mart Strategy According to Wal-Mart executives there are three types of shopping. 1. Stock-up mission, which brings families to Walmarts 3,200 nationwide Supercenters. 2. Basic grocery run, when shoppers want to go someplace nearby and more navigable, such as one of Walmarts 300 neighborhood markets. 3. -Immediate access stop, when shoppers head for the traditional convenience store. Bill Simon describes this 3 types of shopping as an â€Å"ecosystem† Cross-Case Analysis Based on the information obtained by the SWOT analysis for both retail stores, Kmart and Wal-Mart we can pin-point the CSF of each. Critical Success Factors Kmart – CSFWal-Mart CSF Strong Name BrandLargest Discount Store in the World Huge Selection of Food ProductsLow Cost Retail Store Great employee benefits and good compensation policyGlobalization Similarities They both have low prices, the store look very similar, the name Kmart and Wal-Mart resemble each other, their mission statement is along the same message, and customer service they both strive for the best. Differences The biggest difference between this two stores is the adaptation to change. I believe that this was the key strategy that Kmart did not acknowledge. In addition to that, there is also a huge difference in the sales volume and the number of stores around the world. Conclusion At this point we all know that Kmart is slowly going out of business and Wal-Mart is quickly growing. Kmart never updated their inventory tracking system, whereas Wal-mart invested millions of dollars on their tracking system, this could be another breaking point for Kmart, not being able to track their inventory and replenish as the shelves went empty like Wal-Mart does was the start of the down fall, losing numerous customers to Wal-Mart where the customer could always find what they look for. There are many variables to push Kmart out of business, not only their own faults, but the competitor just surpassed Kmart in many different ways.