This 7 page paper examines a case supplied by the student. K-Mart in the 1990’s is suffering declining sales. Competing against Wal-Mart K-Mart is suffering from a poor image and is struggling to find a competitive advantage. The paper examines K-Mart with a Porters Five Forces and SWOT analysis before suggesting an approach to develop a viable long term strategy. The bibliography cites 6 sources.
seek to develop specific competitive advantages. K-mart starts it as a discount store where it is competing on price and with the centralization of purchasing and inventory control we may
argue there is the strategy of gaining economies of scale. The market matured over time and even in mature market there appears to be the continued pursuance of the same
polices, seeing prices as the main issue when there are drops in sales. There were changes, but these appeared to react and follow others and fail to innovate. To consider
the situation of K-mart we can use Porters Five Forces Model. The first problem that faced K-Mart may be threat of existing competition. When the format of K-Mart was
created the market was already seen as mature. However it was believed that even in a mature market there could be renewal. This may be justified as the goods that
were being sold were not single purchases, general purchases needed to be made many times. However, the market was becoming more competitive and customer were changing in their buying habits.
Wal-Mart was the main competitor and appeared to be gaining a high level of K-marts business and had managed to gain the cost advantage in the market and was also
differentiated. In terms of competing with Wal-Mart, Wal-Mart had a better image, with customers perceiving K-mart as a low cost store with the target market being low income. As
such there was a mismatch between the target market, which were middle income families, and the perceived target market. Wal-Mart had managed to create a value image that appealed to
more middle income families and with the supply of general goods as well as groceries it created a one stop shop. Wal-Mart also had more stores and a greater level