Strategic Management of Kmart and Sears - Essay Example

The paper "Strategic Management of Kmart and Sears" is an outstanding example of an essay on business. Kmart and sears corporations were U.S. discount department stores dealing with hard goods. Kmart was strategically located in discount stores in populated and highly visible corner locations which are not very prone to competition. On the other hand, sears were located inside large shopping malls and majored strongly in hard goods like home appliances and tools. It was the second efficient store in sales after Walmart with the second-highest annual sales controlling 40% sales of major home appliances.

However, up the crop of new stores in the malls and in the stores presented upcoming tastes and preferences which rendered those of Kmart outdated. Competition and lack of viable business strategy have seen the Kmart struggle and go through bankruptcy petitions. Its emergence from bankruptcy did less to solve its problems as the company did not have a business strategy that will reclaim its market share.
Both stores were going through the same ordeal. The competition was threatening to oust Kmart out of business as other well-known stores like Korvettee’s, Grant’s, Woolco, Ames among others had become outdated and were already out of the market. Sears was also going through the same fate as most of their customers were turning from shopping malls to big-box retailers on stand-alone stores like Lowe’s ad Home Depot to buy their home hard goods. The two were struggling to find a strategy that would improve their competitiveness and increase their sales.
Kmart regained its profitability by closing some of their stores while selling some to Sears and Home Depot. This move was able to revitalize sales in the stores. The next move was the acquisition of Kmart by Sears. Despite the fact that both the holding and the acquired company were experiencing problems with their sales, they felt the move would cut their costs by $500 annually.
The failure in the sales performance in the two stores can be attributed to a lack of business strategy and a viable business model that would invest more in-store and brand improvements as opposed to buying the already sluggish stores like sears and Restoration Hardware. The store continues to experience low sales. Read More