Kmart Merger Case Study

Group 3 Group Project

Sears and Kmart were well known companies where they were mostly the first pick for the consumer to shop and find the things they need. They are known as retail stores of the 90s and were really the cornerstone companies of successful businesses. This paper will review the retail stores Sears and Kmart and how downsizing has affected the two companies including the economy over the years. In the beginning, Sears was one of the first companies to have mail order to the customers. Kmart was originally named after the founder of the company Spering Kresge and was founded in 1962. In the retail industry, the demand things can play a major burden on certain companies depending on how they reach the customer. The biggest years

33). Though Kmart filed for chapter 11 protection, at the time of its merger, Kmart had stronger financial performance indicators than the sears brand according to Rahman and Eisner (2007) however the brand suffers from a negative consumer association with the Kmart brand , p108). With its direct competitors Wal-Mart catering to the blue collar worker and target the middle-class Kmart attempt to split the difference between the two further creating ambiguity in the seemingly antithetical audience (Graff, 2006). In 2002, Kmart has its sights on taking out Wal-Mart establishing it footing as the premier low-cost discount retailer, however, this strategy was a failure and left them with vast amounts of unsold stock (Graff, p. 57). According to Hartung (2016), and perhaps the seminal measure of the struggles within the marketplace, with over 3,500 stores pre-merger, the portfolio has shrunk to a meagre 1,700 stores. Having the makings of a market contender, the retailer looks to end the seemingly never-ending narrative of layoff and store

Each organization on its own was not meeting the needs of their consumers which was reflected in their declining sales. The major issue for Sears is that after the market crash in 2008, the middle class shrunk and with it their clientele (Billups, 2011). With this change in the needs and desires of their customers, Sears and Kmart need to make transformative change to their organization. Transformative change is the most difficult for organizations to make because it does not allow for an overly controlled timeline and leadership must be able to react