Industry Analysis Report on Kmart
INTRODUCTION
Kmart is a huge vintage company that had peeked at one time and now is
struggling to survive due to competition and other legal battles. This
analysis report will describe and analyze the major forces that shape
the structure and competitive intensity of Kmart. This report will
look at Kmart’s history, competitors, marketing strategies, and some
legal battles that have affected the company. The shaping and
structuring of Kmart started more than one hundred years ago.
HISTORY
Over a century ago, Sebastian Spering Kresge opened a small store in
Detroit, Michigan and tainted the entire setting of retailing. He
built this store not intending that his store would develop into an
empire of more than twenty one hundred stores and an Internet presence
that reaches millions of customers everyday.
The S.S. Kresge Company founded in 1899, opened its first Kmart
discount store in 1962. By the next year, Kmart had opened 53 stores,
on the verge of being the number one retailer. In the 1970s, Kresge
began opening smaller 40,000 square foot stores in smaller towns and
switched from brand name to private label goods manufactured
internationally at low cost. Over the years, Kmart hurt its own
development efforts by diversification into specialty retailing, which
brought it close to bankruptcy. In the 1990’s, the company had to sell
off its Sports Authority, Borders, Office Max and Builders Square
chains. A decade later in the twentieth century Charles Conaway
replaces Floyd Hall as chairman and CEO. About a year after the new
chairman and CEO joins Kmart, the corporation bought BlueLight.com
Internet service and soon there after Kmart Corporation files for
Chapter 11 bankruptcy protection due to stiff competition, corrupt
leadership, and bad financial planning.
COMPETITORS
Kmart filed for bankruptcy protection, once the largest retailer ever
to do so in U.S. history. Most industry analysts believe the cause of
the company's bankruptcy filing was due to stiff competition from
WalMart, Target, and lack of marketing strategies. Besides, when
WalMart and Target predictably entered into Kmart's territory, Kmart
had given its customers every reason to go somewhere else.
With more than 4,000 stores and insistent expansion plans, WalMart is
a one of the strongest retail forces. Thei...
... middle of paper ...
...les is still functioning. This analysis report described and
analyzed the major forces that shape the structure and competitive
intensity of Kmart. This report reviewed Kmart’s history,
competitors, marketing strategies, and a few legal battles that have
affected the company. Kmart needs to realize the need to developing a
strong marketing strategy before they are forced to go out of
business.
REFRENCES
Accela Communications Inc (2003). “BlueLight folding into Kmart, lays
off staff.” http://www.itworld.com
American City Business Journals, Inc. (2003) “Kmart reports $862M
first quarter net loss.” http://www.albuquerque.bizjournals.com
Fox News Network (2003). “Kmart Web Site Answers Angry Shareholder
Questions.” http://www.foxnews.com
InfoWorld Media Group (2001). ”Benefits of a slowdown.”
http://www.archive.inforworld.com
Kmart Corporation (2000). “More Information about K-Mart.”
http://www.kmartcorp.com
Microsoft Corporation (2003) “Kmart’s 5 big blunders.”
http://www.bcentral.com
The Detroit News (2002) “A look at Kmart’s History.”
http://www.detnews.com
Where It’s @ (2002). “Kmart-Running Out of Time.”
http://www.retailindustry.about.com
I am sure almost all of you have either been to or heard of SeaWorld. Today I am going to tell you about what they do to their orcas that they are trying to hide. I chose this topic after watching a documentary called “Blackfish” that goes into the behind the scenes of how SeaWorld treats its animals. I have since done further research online to prepare for this presentation. This is an important topic because you should know what kind of company you are funding and behaviors you are endorsing when you go on your vacations to this destination. Today I am going to persuade you that SeaWorld is corrupt and maltreats its animals, specifically the orcas. First, I will talk about the specific way the orcas are treated and how it affects them
Kmart, contrarily, entered behind Wal-Mart as the second largest retailer in the United States after Sears’ reign. They, however, suffered a similar affliction to what felled Sears when Kmart ruled discount retail so heavily that they seemed almost unstoppable. However, with lack of solid knowledge on the business’ purpose and Wal-Mart as a strong competitor, there began a steep decline, along with Sears, that led to filing for Chapter 11 bankruptcy (New York Times 2002).
An orca, more commonly known as a killer whale, is currently one of the largest marine animals held in captivity. Countless arguments are being made, supporting and opposing captivity of orcas to be exploited as circus animals in theme parks around the world. Throughout recent history, Sea World trainers have been injured and killed by the orcas and the whales, and the whales themselves have been observed as severely depressed. If Sea World releases the whales, they would undergo an immense economic downfall and the whales would be too weak to survive in the wild if they were freed. Since the first Sea World park opened in San Diego, California in 1964, common questions have arose concerning the well-being of orcas in captivity, the dangers of humans training them, the physical capability of whales theoretically being released, and the psychological differences between whales living in the wild versus whales living in Sea World's confinement.
Analyzing Wal-Mart's annual report provides a positive outlook on Wal-Mart's financial health. Given the specific ratios and its comparison to other companies in the same industry, Wal-Mart is leading and more than likely continue its dominance. Though Wal-Mart did not lead in all numbers, its leadership and strong presence of the market cements the ongoing success. The review of the current ratio, quick ratio, inventory turnover ratio, debt ratio, net profit margin ratio, ROI, ROE, and P/E ratio all indicate an upbeat future for the company. The current ratio, which is defined as current assets divided by current liabilities, is a measure of how much liabilities a company has compared to its assets. Wal-Mart in the year of 2007 had a current ratio of .90, and as of January 2008 it had a current ratio of .81. The quick ratio, which is defined as current assets minus inventory divided by current liabilities, is a measure of a company's ability pay short term obligations. Wal-Mart in the year of 2007 had a quick ratio of .25, and as of January 2008 it had a ratio of .21. Both the current ratio and quick ratio are a measure of liquidity. Wal-Mart is not as liquid as its competitors such as Costco or Family Dollar Stores Inc. I believe the reason why Wal-Mart is not too liquid is because they are heavily investing their profits for expansion and growth. Management claims in their financial report that holding their liquid reserves in other currencies have helped Wal-Mart hedge against inflationary pressures of the US dollar. The next ratio to look at is the inventory ratio which is defined as the cost of sales divided by average inventory. In the year of 2007, Wal-Mart’s inventory ratio was 7.68, and as of January 2008 it was 7.96. Wal-Mart has a lot of sales therefore it doesn’t have too much a problem of holding too much inventory. Its competitors have similar ratios though they don’t have as much sales as Wal-Mart. Wal-Mart’s ability to sell at lower prices for same quality, gives them the edge against its competition. As of the year 2007, Wal-Mart had a debt ratio of .58, and as of January 2008, it had a debt ratio of .59. The debt ratio is calculated by dividing the total debt by its total assets. Wal-Mart has a lot more assets than it does debt so Wal-Mart is not overleveraged.
Sears has created a “Financial Crisis” when hedge fund manager Edward Lampert took over control of the company. The mentality of investors of a CFO is an important viewpoint during crisis because it can help streamline process and reduce cost. Retail experience should be dominant the retail in order to feel the pulse of the consumer desires and to determine proper margin levels while eliminating inefficiencies in the organization. According to Marina Strauss of the Globe and Mail, “a sweeping change will be required to improve the retailer’s outlook”. She quoted the (CEO of Sears-Canada) Mr. McDonald saying in a memo that “Our store are too difficult to shop in. We have inconsistent execution…We do not offer the right product in the right market” (STRAUSS M., 2011).
We can see that Target is successful due to its good brand strategy and thus in order to keep up the success the company must change their strategies and branding so that they can match the needs and the wants of the customers. Even when the companies have a lot of similarities still the differences are greater. Kmart took decisions at a late point and still struggling to capitalize on the opportunities and Target has been active always to capture opportunities and overcome its weaknesses.
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 loosing 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. Kmart¡¦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.
The issue of keeping Orcas in captivity and under the care of man has been a controversial practice ever since the first dolphins and whales were taken into aquariums for the amusement of humans. In more recent times, the documentary Blackfish (which has been recently broadcasted on popular TV stations such as CNN) that focuses on Tilikum, an orca held by SeaWorld, has brought to light the controversy over captive killer whales. Orcas are majestic, beautiful, and intelligent creatures that should not be kept in captivity for our entertainment because of the harm it causes them.
Reinhard Heydrich had a lonely childhood. He was teased by boys at school (“Elie”). He didn't have friends he was thin and small and had a very high voice. Heydrich was by now over six feet tall He still was know for the man who still had the high voice they named him Billy Goat because of his weird laugh. People in the nazi party got gelis because he was a higher rank. (“USHMM”) They spread rumors about him having a Jewish background from his Dad’s side of his family. Hitler heard about these rumors about Reinhard and had a long meeting with him and said he had many talents that would be useful to him and his plans with the Jews and his army.
... hikers to experience the wilderness the way it was initially intended. With unpredictable weather, wildlife, etc. Where hikers are granted the freedom to make their own decisions. As much as the tangible dangers hinder the journey one may face during the trail--the desire, attitude and the love for hiking are perhaps what keeps them yearning for the next level.
Wal-Mart initially began its operations in 1945, when Sam Walton leased a ‘Ben Franklin’ franchise variety store in Newport, Arkansas. After relocating to Rogers, Arkansas in the early 1950s, Sam Walton’s ‘Ben Franklin’ became ‘Walton’s 5 & 10’. By 1962, Walton found himself the chain owner of 11 different Walton’s stores across Arkansas. He then decided to rename the chain ‘Wal-Mart’, after himself. On October 31, 1969, after further expansion across the state, the chain was incorporated as Wal-Mart Stores, Inc. Three years later, Wal-Mart was approved and listed on the New York Stock Exchange (NYSE).
The purpose of this presentation is to provide a comparative analysis of business activities of two well-known representatives of the US retail industry, Target and Walmart. My research is focused on a business strategy of these largest and most experienced American merchandising companies; particularly, on their activities in Canada. Based on the data collected from the various sources, I would like to detect, analyze, and demonstrate the obvious causes that have lead to a catastrophic failure of Target in its unsuccessful attempt to win a Canadian market.
Kmart is shutting down stores in the following states, Livonia Michigan, Kahului, Hawaii, Beavercreek Ohio, Meadville Pennsylvania, Mill Hall, Pennsylvania and Spanaway Washington.
I once spent a full three minutes looking for a bullfrog that was so unexpectedly large I couldn’t see it even though a dozen enthusiastic campers were shouting directions. Finally I asked, ‘What color am I looking for?’ and a fellow said, ‘Green.’ When at last I picked out the frog, I saw what painters are up against: The thing wasn’t green at all, but the color of wet hickory bark” (p. 695). This example illustrates how we can perceive colors differently from one another. Annie had visualized her idea of what the green bullfrog should look like, possibly from a picture she had seen in the past. The person that told her the frog was green may have meant that it was an olive green. For instance, what some might call burgundy, others would call dark red or even crimson. Furthermore, people who are colorblind have an entirely different perception of colors; depending on the degree of colorblindness, they may not be able to recognize the colors red, green, or
Sears began as a small retailer but as the years have gone by, they have become