Case Analysis of K-Mart

Essay by MistressUniversity, Master'sA+, November 2004

download word file, 2 pages 3.0

Downloaded 80 times

Page 1.

Anne Foss

October 8, 2004

MT 460


Management Policy and strategies

Lesson Project 1


Kmart was founded in 1899, it was known as the SS Kresge store. In 1912 the firs was incorporated and had 85 stores with sales of $10,325,000. Next to Woolworth's it was the largest variety chain.

In 1957 Harry Cunningham became General Vice President. In 1962 the first K-Mart was opened as a one-stop shopping unit. It was where you could by a variety of goods at closeout prices.

Its weakness is when they tried to venture into other types of business and they spread themselves to much. This is where K-mart made one of their worse decisions in business.

They realized expanding this way would not work. The only thing that they could do is to expand and improve their own stores.

In 1990 K-Mart started to reverse their strategy, so they refurbished, expanded stores, on lifestyle departments, merchandising, and more capital investment in retail.

Page 2

It was a $2.3 billion dollar program, which involved all stores. K-Mart senior executive was to get others to recognize that nothing is good forever. "good-planning" =getting involved, "poor-planning"=done by those who don't recognize it and when they do it is too late. Their management believed they were successful in stratagy planning.

Then in 1993, disappointment came. There was a loss of $974 Million in sales of $34,156,000 for the fiscal year ending January 26, 1994.

The structure of K-Mart to me is one of pricing their products for the low to middle class of people. Then they tried to restructure their company and expanded to other business, which in turn did not measure out and had a severe loss of profits.

K-Mart should go right back to their basic structure from the beginning.