K-Mart is the third largest discount retailer in the US behind Walmart and Target. It operated over 1,400 stores but struggled with competition and management issues. These included leadership changes and a bankruptcy filing. Kmart also faced strong competition from Walmart, the largest retailer, and Target, who both reported much higher revenues and profits than Kmart in 2008. This document analyzes the downfall of Kmart and provides recommendations such as focusing on local communities and franchising smaller stores.