Overview, Current Technology Assessment, and Value Chain AnalysisKmart Holding's purchased Sears Roebuck in an effort to help the two struggling companies survive by combing their technology. Kmart who had filed bankruptcy several years ago has taking on a new challenge. The two companies merge in a deal valued at about $11 billion, creating the third-largest retailer in the U.S. Kmart's chairman, Edward J. Lampert and Sears Chairman Alan Lacy said that the idea behind the merger is to build up a new company, not tear down an old one. But they also are betting that a new management team can forge a single, lower-cost competitor out of two perennial laggards, which likely will mean selling off some stores and cutting redundant operations. They will combine their operations with a single "great culture," and the two retail chains may exchange both store locations and merchandise brands in the process, said top management.
(O'Neal, Chandler, & Dresser, 2004).
The new Sears Holdings Corp. will have about $55 billion in annual revenue, and about 3,450 stores, the companies said. Sears Holdings will act as the holding company for Sears and Kmart, which will continue to operate separately under their brand names and operate separately under their respective names. Kmart is the place to get Martha Stewart home products, Jaclyn Smith fashions and the popular Joe Boxer line. Sears is the place that carries Kenmore appliances, Craftsman tools, Die hard batteries and, more recently, Lands' End apparel.
Top management believes by combining these two stores it will give customers a greater selection at choosing top quality brands under one roof. (Covert, 2004). Analysts and media top management of the two companies said they see a "significant opportunity" for Sears to take over some of Kmart locations as it pursues an off-the-mall growth strategy. Kmart,