Kmart Swot Analysis

Kmart started off on the right foot back in 1899 and was a major player in supplying goods to the consumers from their small five and dime stores. From there they started to expand, they were a provider of low-cost merchandise but once the competition (Wal-Mart and Target) started opening they started losing

the fight. Since that time they have been through many changes and many hard times. By 1962 they started opening full line discount stores which continued to help the company succeed. From 1980 - 2002 five different CEOs ran the company. Some of their strategies were focused on the same track as the one before them while others had to change direction entirely in order to fight to turn the company around. Kmart has suppliers that they order their goods from so they can keep their shelves stocked. They do not make any of their own products however they do try to differentiate themselves by selling exclusive brands that include Thalia Sodi, Jaclyn Smith, Joe Boxer, Martha Stewart, and Sesame Street. KmartЎ¦s strategy has changed a few times since they started out and may continue to change in order to succeed. They have faced bankruptcy in the past and have fought to continue to compete against their competitors.

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 doesnЎ¦t stand when other competitors have lower prices. KmartЎ¦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. KmartЎ¦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 KmartЎ¦s case they do supply products that are exclusive to Kmart, for instance, Thalia Sodi, 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.

KmartЎ¦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