Business Analysis: Target Vs. Kmart
Strategy final project
Target vs. Kmart
Shai Zamir
Dan Saguy
Introduction
Kmart Corporation, incorporated in May 1916, is a chain of discount retail stores and a general merchandise retailer, headquartered in the United States, with store locations in all 50 states, as well as Puerto Rico.
Kmart went through significant changes in the last 10 years: In 2002 a scandal similar to that of Enron, Kmart’s management was accused of misleading information.
In 2003, after filing for chapter 11, it emerged as a new corporation, closing hundreds of stores. In 2005, it acquired Sears, forming a new corporation under the name Sears Holdings Corporation. Ever since, it has continuously reported sales decreases,
On December 27, 2011, after …show more content…
This leads to similar performance regarding porter’s 5 forces. Certain differences exist, mainly due to Kmart’s difficulties and struggles to develop its brand and add value to the company, which is reflected in the higher bargaining power of both suppliers and buyers.
VRIO Analysis
Resource 1: I.T. Competence
Value: Target has a core competence in its use of information technology that can support its management operations and just in time inventories (one of the best SCM in retail industry). Continues improvement in technology by intelligent IT spending. Valuable.
Kmart showed IT incompetence which made it inferior to its rivals. It changed five CIO’s in seven years. Not valuable.
Rarity: Competence in information technology is also an asset of other competitors (Wal-mart, Amazon.com, Costco, to name some), The resource is not rare.
Resource 2: Distribution Network
The companies rely on suppliers to deliver products that are of high standards, and there is a great importance for an existing high quality chain of …show more content…
There are other nationwide brands like Gap, Barns&Noble, Stop’n’Shop, etc. but they sell a smaller line of products, and not necessarily discounted. Therefore we consider it as being rare.
Inimitability: The distribution network is very difficult to imitate due to the cost disadvantage that competitors will face in acquiring or substituting this resource.
Organization: As for Target, the corporation has the organizational capability to exploit the resource that they developed, capture more share of the market and grow. Kmart, on the contrary, had some difficulties with supplier relations, along it’s history of financial disorders. Martha Stewart for example, terminated her contract with Kmart, selling her line of home products (She is now actually turned against Kmart).
Resource 3: Brand Name
Value: Target has a strong brand name, it is known as providing quality products for low price. The brand is related to a positive and even fun experience which is a result of Target's intensive investment in the store's design and shopping experience. Their mission statement focuses great guest service, clean stores and speedy checkouts. Fast fun and friendly
Target vs. Kmart
Shai Zamir
Dan Saguy
Introduction
Kmart Corporation, incorporated in May 1916, is a chain of discount retail stores and a general merchandise retailer, headquartered in the United States, with store locations in all 50 states, as well as Puerto Rico.
Kmart went through significant changes in the last 10 years: In 2002 a scandal similar to that of Enron, Kmart’s management was accused of misleading information.
In 2003, after filing for chapter 11, it emerged as a new corporation, closing hundreds of stores. In 2005, it acquired Sears, forming a new corporation under the name Sears Holdings Corporation. Ever since, it has continuously reported sales decreases,
On December 27, 2011, after …show more content…
This leads to similar performance regarding porter’s 5 forces. Certain differences exist, mainly due to Kmart’s difficulties and struggles to develop its brand and add value to the company, which is reflected in the higher bargaining power of both suppliers and buyers.
VRIO Analysis
Resource 1: I.T. Competence
Value: Target has a core competence in its use of information technology that can support its management operations and just in time inventories (one of the best SCM in retail industry). Continues improvement in technology by intelligent IT spending. Valuable.
Kmart showed IT incompetence which made it inferior to its rivals. It changed five CIO’s in seven years. Not valuable.
Rarity: Competence in information technology is also an asset of other competitors (Wal-mart, Amazon.com, Costco, to name some), The resource is not rare.
Resource 2: Distribution Network
The companies rely on suppliers to deliver products that are of high standards, and there is a great importance for an existing high quality chain of …show more content…
There are other nationwide brands like Gap, Barns&Noble, Stop’n’Shop, etc. but they sell a smaller line of products, and not necessarily discounted. Therefore we consider it as being rare.
Inimitability: The distribution network is very difficult to imitate due to the cost disadvantage that competitors will face in acquiring or substituting this resource.
Organization: As for Target, the corporation has the organizational capability to exploit the resource that they developed, capture more share of the market and grow. Kmart, on the contrary, had some difficulties with supplier relations, along it’s history of financial disorders. Martha Stewart for example, terminated her contract with Kmart, selling her line of home products (She is now actually turned against Kmart).
Resource 3: Brand Name
Value: Target has a strong brand name, it is known as providing quality products for low price. The brand is related to a positive and even fun experience which is a result of Target's intensive investment in the store's design and shopping experience. Their mission statement focuses great guest service, clean stores and speedy checkouts. Fast fun and friendly