KMart: A Retailing Giant on the Ropes

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KMart A Retailing Giant on the Ropes

• Bryan Keith Rauch
• EMGT 314 B
• University of Missouri - Rolla

2
Introduction

• Examine Discuss
• Corporate history
• Current Situation
• Future plans

3
Corporate History

• 1899 - S.S. Kresge Company founded
• 1966 - 1 billion sales
• 1977 Kmart Corporation
• 1980s - Expansion / Acquisitions
• 1990s - Contraction / Divestments

4
Corporate Strategy?

• Textbook example of how NOT to run a business
• Complete misunderstanding of market
• Poor strategic thinking
• No focused strategy

5
The Perfect Storm

• Keys to success (or failure) in retailing
• Location
• Price
• Assortment
• Service

6
Bankruptcy

• Falling sales in 2001
• Late payments to creditors
• Executive Bonuses!
• Fleming Foods the last straw
• Closed 350 stores

7
Stock Performance
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Discount Retailing Environment

• Operating Expenses
• Advertising cut 40 in 2001
• Sales driven by advertising
• Pricing low price leader?

9
Future Plans

• Brand positioning Family Values
• Public perception ?
• Differentiation

10
Recommendations

• Find a profitable market niche
• Takeover target?
• Reorganization Plan
• Questions?