Target and Kmart comparison report

Topics: Hypermarket, Wal-Mart, Kmart Pages: 14 (3073 words) Published: April 22, 2015
Retail Comparison

Kmart and Target

Word Count: 2500

Executive Summary
The comparison that has been undertaken in the study is a thorough study taking in to account the external and the internal environment of both the retail companies Kmart and Target which are both successful in different countries. Kmart in Australia is successful while target is a struggling Company. Both deal with the same types of products and both companies belong to the same sector. The aim of the study is to find out why one retailer is successful and another retailer in the same type of environment is unsuccessful What came out during the course of the study is that the customer segment that was being targeted by both companies was similar and yet the approach and the pricing strategy of both companies were different. This has provided an edge to Kmart along with the support that it receives from the government. Target is an American group that has expanded into the region and the expansion program though successful has not produced the expected results increasing their investment in real estate but providing very little returns from the real estate so far.

Introduction
In the global environment the retail competition is stiff and many of the companies indulge in a price war and a policy of trying to increase the customer base though price differentiation and the customer service changes that are increasingly become technology driven to cut costs and increase the customer experience through automation Selection: The two retailers that have been chosen are Kmart and Target Kmart

The products of Kmart are all retail consumer markets that are sold from retail outlets. The service categories are in insurance, in food, in chemical and fertilizers and in Industrial services. So far the company operates in Australia and New Zealand. It also operates out of U.S.A. The segment that Kmart caters to is the lower middle class, the upper middle income and successful professionals who do not have the time but have the money to shop. The format that is sued is the Big Box store format which suits Kmart (Bogenrief, 2012). Target

Target has discounted departmental stores, super center, super store and hyper market. It caters in Financial, Retail, Medical and retail services. It is extensively present in U.S.A., Australia and India. Its customer segment is generally urban customers that are uptown.mid town mix and an urban core customer segment. Its channels and formats include urban store format and the Big Box format (Golberg et al., 2005).

Situational Analysis –Kmart
Political Forces: The political and the legal forces are in favor of Kmart as it is a home corporation and there is absolutely no requirements of regulations that are proving to be obstacles especially since the customer base are the lower middle income groups and the middle income groups. It is supported by the Australian government because of the large scale employment that the organization provides to Australians. Economic Forces: The economic conditions in Australia have been good. The tax rate that Kmart pays in Australia is 30%, the level of regulations is low for Kmart, and it has the scope to be able to do business in the entire region facilitated by trade and online business. The international scope is not very good currently after having filed for bankruptcy in 2002 in U.S.A with acquisitions that did not perform. Socio Cultural Forces: The Australian customer base and the culture and social conditions are well known to the company which is why it has been able to outperform Target Corporation by understanding the needs of the lower middle class and the middle class. The social challenge that Kmart has thrown to the customer segment is if the customers can find a lower price in Australia then the company will match it! Technological Forces: The technological changes that Kmart has put in place have worked in Australia...

References: Bogenrief, Margaret. (2012) Three Things That Kmart Needs To Fix If It Wants To Survive, Business Insider, www.businessinsider.com, retrieved on April 15th 2015
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Golberg, Katie.,Moreck,Nicole.,Hardy,Clint., Holft,Tom., Noetzel,John., (2005) Strategic Industry Analysis,www.c.umm.edu, retrieved on April 15th 2015
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Hahn, Lindas. (2014) Target Corporation Strategic Report, http://economics-files.pomona.edu/jlikens/SeniorSeminars/sagegroup2005/Reports/Targetreport.pdf
Kmart (2015) Corporate Website, www.kmart.org retrieved on April 15th 2015
Lea, Morgan. (2015) SWOT and PEST Analysis, http://prezi.com/
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Wooten, Lynn. (2007) Target Corporation, Expansion Into Urban Markets, Thesis, www.uebases.bus.umian.edu retrieved on April 15th 2015
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Sinclair, Samantha. (2014) For Kmart Australia, Stability and Low Cost Are Key, CSC, www.csc.com retrieved on April 15th 2015
Tongue, K., McDonald, K., Doutkevitch, R., Midgley, K and Munro, T
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