Walmart & Kmart

Posted on 19 September 2014 at 04:38

www.minyanville.com/investing/articles/retail-KMART/2/17/2009/ • John Tschohl,Desk.com Blog EXPERT CORNER SERIES. • warlmart.blogspot.com/2009/02/introduction.html • Paul Leinwand and Cesare Mainardi | 8:38 AM December 15, 2010 • www.kmart.com • ">www.walmart.com"> Introduction Wal-Mart's history is one of innovation, leadership and success. Wal-Mart was founded by Sam Walton in 1962.It started with a single store in Rogers, Arkansas in 1962 and has grown to what is now the world's largest and arguably, the most emulated retailer. Some researchers refer to Wal-Mart as the industry trendsetter. Objective Walmart’s core objective has always been the following: “PROVIDE EVERYDAY LOW PRICES AND SUPERIOR CUSTOMER SERVICE” Walmart’s success doesn’t just stem from impressive logistics, aggressive vendor management and its position as a low-cost retailer. What really underlies Walmart’s advantage is a coherent and differentiated approach to the market. • Their well-defined way to play focuses on “always low prices” for a wide range of consumer items, from food to prescriptions to electronics. • They support their low-cost way to play with an integrated system of capabilities, including: real estate acquisition; no frills store design; and superior supply chain management involving among others expert point-of-sale data analytics. • Their product and service mix is kept tightly aligned with their way to play and capabilities system: avoiding big-ticket items (e.g., furniture or large appliances) where it has no cost advantage, or where new service capabilities might be required. And it innovates constantly within its chosen constraints: e.g., tailoring product assortments to local trends. Logo history Strategies • The real strategy Walmart has sticked to is clearly visible in its logo that says, “Save money.Live better” • Wal-Mart‘s business strategy is ‘Overall Cost Leadership’, offering their customers great quality service and products at a lower price than their competition. • Wal-mart follows the five forces business strategy i.e.buyer power, supplier power, threat of substitute products and services, threat of new entrants, and rivalry among existing competitors. One person best qualified to account for Wal-Mart’s success is David Glass, former President and CEO. He said that “the secret to Wal-Mart’s success is the fact that when he was CEO the company paid very strict attention to three basic principles.” Those principles are: 1. Value and service for customers. The customer is the boss. Everything possible is done to make shopping at Wal-Mart stores a friendly, pleasant experience. Wal-Mart associates strive to provide exceptional customer service. 2. Partnership between the company and its associates (employees). A family-like environment that stresses teamwork. 3. Commitment to communities in which stores are located. Wal-Mart founder Sam Walton once said: “Customers are more loyal to us because our associates treat them better than salespeople in other stores do. I tend to believe that better customer service and motivated employees who feel wanted and appreciated are the reasons businesses succeed and thrive. Wal-Mart had focused on developing and maintaining a corps of friendly, motivated associates who understand that the customer is boss and act like it. In turn, Wal-Mart has been dramatically more successful at increasing sales.” Productivity & Achievements • Today, this retailing pioneer has annual revenues of over $100 billion, 3,000 stores and more than 750,000 employees worldwide. • Wal-Mart's ability to replenish theirs shelves four times faster than its competition is just another advantage they have over competition. • Wal-Mart operates in Mexico as Walmex, in the UK as ASDA, and in Japan as Seiyu. It has wholly owned operations in Argentina, Brazil, Canada, and Puertorico. Wal-Mart's investments outside North America have had mixed results: its operations in South America and China are highly successful. • Another success feature of Walmart is ‘Fighting Hunger Together’ in which it is donating 1.1 billion pounds of food valued $1.75 billion. KMART Introduction More than one hundred years ago, Sebastian Spering Kresge opened a modest five-and-dime store in downtown Detroit...and changed the entire landscape of retailing. The store that Kresge built has evolved into an empire of more than 1,500 stores and an Internet presence that reaches millions of customers. Objective The business philosophy of Kmart stayed the same -- offer consumers products they need at prices they can afford -- and they'll keep coming back. It has no appealing or strategic kind of logo, it only says: “Kmart-Deals on Furniture, Toys, Clothes, Tools,Tablets & TVs’.” Strategies It has not adopted any profound strategy and payed its only focus on advertisement thriving to keep its pace atleast upto its strong competitors like Walmart and Target. Logo History Productivity Its total revenues are US$15.593 billion (2010). Reasons for Kmart’s Failure The causes of Kmart's decline have been speculared about in numerous business journals. Here are a few reasons that stand out: • Kmart lacked a unique brand identity Sure, it sold a bunch of stuff - but who was it for? And what's the difference between a Kmart, a Big K and Super Kmart? Who knew? Wal-Mart's message, on the other hand, was explicit from the get-go: "Always Low Prices." When it came to saving a few bucks, shoppers knew that Wal-Mart was the place to go. Kmart, however, never redefined its brand in response to its competition. • Kmart rejected modernization In 1987, Kmart celebrated its twenty-fifth anniversary and boasted $24.2 billion in annual sales. But Kmart managers refused to update to automated inventory control, hugely impacting to the company's bottom line. Meanwhile, Wal-Mart and Target embraced automated inventory systems and modern cash registers.Both retailers now soar ahead of Kmart. • Kmart suffered from inconsistent management Sebastian S. Kresge founded Kmart in 1962. Since then, the company has endured an endless influx of managers from different companies. The lack of a unified corporate culture meant that Kmart has also lacked a unique and consistent brand. Wal-Mart's management, on the other hand, have adhered consistently to their original cultures. The result: a disciplined operation with a clear message. • Kmart lacked cutomer services ability Kmart rejected improved customer service. Early Kmart shoppers knew what they were getting: cheap prices, poor customer service.For a long time, Kmart could get away with this model. But again, Walmart changed the game by offering cheap prices and consistently good customer service, as evidenced by its slogan: "Save money, Live better."Kmart did little to bring its customer service up to par.All this left customers with a bad taste in their mouths. • Kmart lack employ-supervisor relationship One of the ways toward better customer service is to make sure that employees feel valued, loved and appreciated. If you expect an employee to treat the customer like royalty, you must treat the employee like royalty. Neither Wal-Mart nor K-Mart pays their employees more money than the other, but Wal-Mart communicates to its employees that they are wanted, loved and appreciated. When front-line employees are paid very little, it’s critical that you work hard to make them feel appreciated. K-Mart has never been successful with this strategy. Conclusion In business, as in life, only the strong survive. Kmart failed to adapt to the new retail environment - one that it had, ironically, helped to create. The lack of a clear concept about how to reach the market, is the single most important factor in explaining why Kmart’s fortunes have fallen so far, compared to its rivals. Without a clear way to play, and capabilities to support it, a company cannot achieve the coherence it needs to truly excel at what it does, and thus outpace competitors. References: • www.minyanville.com/investing/articles/retail-KMART/2/17/2009/ • John Tschohl,Desk.com Blog EXPERT CORNER SERIES. • warlmart.blogspot.com/2009/02/introduction.html • Paul Leinwand and Cesare Mainardi | 8:38 AM December 15, 2010 • www.kmart.com • www.walmart.com VS KMART Walmart and Kmart are the two famous ‘retail industries’ found in United States of America. WALMART: Introduction Wal-Mart's history is one of innovation, leadership and success. Wal-Mart was founded by Sam Walton in 1962.It started with a single store in Rogers, Arkansas in 1962 and has grown to what is now the world's largest and arguably, the most emulated retailer. Some researchers refer to Wal-Mart as the industry trendsetter. Objective Walmart’s core objective has always been the following: “PROVIDE EVERYDAY LOW PRICES AND SUPERIOR CUSTOMER SERVICE” Walmart’s success doesn’t just stem from impressive logistics, aggressive vendor management and its position as a low-cost retailer. What really underlies Walmart’s advantage is a coherent and differentiated approach to the market. • Their well-defined way to play focuses on “always low prices” for a wide range of consumer items, from food to prescriptions to electronics. • They support their low-cost way to play with an integrated system of capabilities, including: real estate acquisition; no frills store design; and superior supply chain management involving among others expert point-of-sale data analytics. • Their product and service mix is kept tightly aligned with their way to play and capabilities system: avoiding big-ticket items (e.g., furniture or large appliances) where it has no cost advantage, or where new service capabilities might be required. And it innovates constantly within its chosen constraints: e.g., tailoring product assortments to local trends. Logo history Strategies • The real strategy Walmart has sticked to is clearly visible in its logo that says, “Save money.Live better” • Wal-Mart‘s business strategy is ‘Overall Cost Leadership’, offering their customers great quality service and products at a lower price than their competition. • Wal-mart follows the five forces business strategy i.e.buyer power, supplier power, threat of substitute products and services, threat of new entrants, and rivalry among existing competitors. One person best qualified to account for Wal-Mart’s success is David Glass, former President and CEO. He said that “the secret to Wal-Mart’s success is the fact that when he was CEO the company paid very strict attention to three basic principles.” Those principles are:

Walmart & Kmart

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Abdul-wasal

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