Question

Create a SWOT analysis for K-Mart/Sears, prioritize and quantify each point

Answer 1

SWOT Analysis refers to a strategic framework that helps in analyzing the competitive position of a company in the market and develops suitable strategic planning for the same. It identifies the strengths, weaknesses, opportunities and threats of that company.

Strengths- Kmart possesses various strengths in the industry. It has exclusive product lines such as Route 66, Joe Boxer and others. The retails stores are mostly located in urban areas with concentrated populations, which help in gaining large number of customers. It provides special layaway plan for customers preferring installment payments and excellent customer service. Besides, it enjoys high brand loyalty due to smaller customer base and strong brand equity because of its early presence. In addition, the brand produces great quality food and perishable items.

Weaknesses- Kmart has undergone bankruptcy due to its overleveraged financial position. Poor supply chains make it difficult to compete with prices of Wal-Mart. Besides, various stores have been closed due to its weakening of the financial position in the market.

Opportunities- It has the possibility of expanding to new emerging global markets and enhancing its brand image and margin with private label growth. It can cater to multi-ethnic groups in the US by satisfying their needs and expand its services to other places like schools or healthcare units. It has the capability of increasing its market presence in rural regions and acquiring new brands for improving sales.

Threats- Economic turmoil would switch customers to cheaper brands like Wal-Mart. It attracts competition from Whole Foods, target Corporation, Wal-Mart and others because of their increasing market share. Price wars between these international retail chains bring down the profit margins of Kmart and its operations are also affected by politics, taxes or government intervention. Declining profits would further put pressure on its weak financial position.

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