Kmart Case Study

Kmart and Sears have issues that a lot of stores had once WalMart came onto the scene.  WalMart is able to attract customers with their low prices for all there products.  Recently, WalMart is a one-stop shop for everything that the consumer needs.  During Christmas time it is often that people go to WalMart for their sales.  Before Kmart and Sears deiced to join forces the Sears was having trouble themselves.  The problem with Sears and Kmart is that they didn’t do enough to differentiate themselves in a changing market.  These companies could have greater been able to compete had they not made some critical mistakes that were discussed in Chapter 8

        The failure of Kmart and Sears to formulate a functional strategy of corporate strategies the company began to pull itself apart.  The first thing that the companies did wrong is they attempted to follow the leader.  With combining Sears and Kmart the two companies were trying to be too much like WalMart and other competitors.  This strategy ignores what strengths the two companies brought to the table.  They should have looked at what each of them did well and built off of that.  The fact that Sears has a lot of knowledge in home supplies could have been a positive for this company.  Kmart also has an extensive gardening section.  These two things could have been played together as strengths that the other competitors didn’t focus on. The companies also should try and avoid hitting another home run like WalMart did. WalMart is already capturing the family that is living on a budget.  It would have been a good idea to look for a mid to upper level market to try and attract.  Having two many things like WalMart would saturate the market. They also made a mistake in entering into an arms race with the other competitors in the market.  Price wars probably caused low profit margins and contributed to the bankruptcies of Kmart.  Kmart also needs to accept that they may not be able to compete with these other companies.  As said in the chapter, believing that it has too much invested to quit, management may continue to throw “good money after bad.”