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 fluctuating prices that dissatisfied customers, lack of product variety compared to competitors, and multiple changes in CEO and the board of directors that led to bankruptcy. Recommendations included focusing on local communities, franchising smaller stores, and merging with Sears to potentially become the largest discount retailer.

1. K-mart:The Bleeding Giant Sharese Washington Cedrick Wilkins Organization and Management MGMT 300

2. Executive Summary K-Mart is one of the top retailers in the United States and the number three discount-retailing store behind Wal-Mart and Target. Kmart operated a total of 1,416 Kmart stores across 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands. K-Mart had problems competing with other major retailers and managing its supply chain.

3. Company Overview Established in 1912 Delaware Started off with the name S.H. Kresge that was founded by Sebastian Spering Kresge and John McCrory. Grew from a Detroit five-and-dime store opened in 1899. K-Mart has went from only 85 stores to 2,114 stores.

4. Problem Statement / Key Issues Competition Wal-Mart Target Replacement of CEO and BOD Bankruptcy Competition and replacement of CEO and BOD all led to the downfall of Kmart.

5. Analysis Main issue was Chapter 11 bankruptcy The problem of competition facing Kmart is Wal-Mart being the number one discount retail store in the U.S. and Target being second Wal-Mart had $401.2 billion in revenue in 2008, with a $13.4 billion in net income and 5.6% in operating margin. Target had $64.9 billion in revenue in 2008, with a $2.2 net income and 5.4% in operating margin. K-mart had a $16.2 billion in revenue in 2008, with a $172 million in net income and 1.1% in operating margin.

6. Analysis continued….. Competition offers a variety of products that Kmart does not. Competition with itself Customers being dissatisfied with the fluctuation in Kmart prices.

7. Recommendations Change company’s name Embed in local communities Focus more on minorities Franchise smaller retail stores Establish sinking funds for retailing technological advancements Create a trickle-down- effect for different systems and teams that are being hired in the corporate and managerial levels.

8. Rationale In order to stay on the chart, then Kmart should resemble Sears brand image. Go beyond their competitors so they won’t file for Chapter 11 Bankruptcy again. Lower cost of products.

9. Results and Conclusion The mergence of Sears could make Kmart the number one discount retailing store. Introduce more Super K’s around the world would increase revenue. Sears and Kmart both produce ideas that would be beneficial to both of them.

10. References (n.d.). K-Mart Corporation-Company History . Retrieved from http://www.fundinguniverse.com/company-histories/Kmart-Corporation-Company-History.html (n.d.). Target Corporation . Retrieved from http://www.fundinguniverse.com/company- histories/Target-Corporation-Company-History.html (n.d.). Walmart History . Retrieved from http://walmartstores.com/AboutUs/297.aspx Bhandari, Narendra C. “K-Mart: The Bleeding Giant.” 1999. Frederick, J. (1992, November 9). Kmart unveils biggest Super Center: food taking major role at discounter . Retrieved from http://findarticles.com/p/articles/mi_m3374/is_n20_v14/ai_12773478/ Lewis, K. (2003, October 10). Kmart's Ten Deadly Sins . Retrieved from http://www.forbes.com/2003/10/10/1010kmartreview.html Matyk, J. (2003, December). What went wrong with Kmart . Retrieved from http://74.125.113.132/search?q=cache:CaZs8tUMd7AJ:www.bsu.edu/libraries/virtualpress/studEnt/honorstheses/pdfs/M39_2003MatykJacquelineM.pdf+kmarts+internal+problems&cd=10&hl=en&ct=clnk&gl=us