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Sample Essay on SWOT Analysis of Kmart

SWOT Analysis of Kmart

A SWOT analysis of Kmart indicates what this organization can do and what it cannot do as well as the potential threats and opportunities that it is facing. SWOT analysis can be defined as a tool that organizations use to identify Strengths, Weaknesses, Opportunities and Threats. Through this tool, an organization gets information after analyzing the environment where it operates and after separating this information into external issues and internal issues. The internal issues are the weaknesses and strengths of an organization while the external issues are the threats and opportunities of an organization. Kmart is a discount chain department store headquartered in the U.S. It is a Sears Holdings Corporation’s subsidiary and it operates like a mass merchandising firm.

A comprehensive SWOT analysis of Kmart

Strengths

Kmart has the following strengths:

  • Strong management
  • A strong brand name
  • An established base of loyal customers
  • Better customer service
  • It is considered as one of the best brands among other retailers
  • Innovative and open to ideas
  • It offers a wide range of products
  • It offers better compensation to employees, benefits and work satisfaction
  • It offers buyers entertaining and unique shopping experience

Weaknesses

The weaknesses of Kmart include;

  • Capital raise to enhance faster expansion of this store is restricted by its private ownership.
  • Its prepared foods are highly priced.
  • Its grocery stores are very large which implies that customers do not get efficient services.
  • Its financial position is overleveraged.
  • Because of poor systems of chain supply, Kmart is unable to compete with some retailers like Wal-Mart.
  • The brand was affected by the closure of some of its stores.

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Opportunities

Some of the opportunities of this company include:

  • Expansions abroad and emerging markets by introducing services like healthcare and culinary schools among others.
  • Margins and brand to be enhanced by the growth of a private label.
  • Opportunity to cater for multi-ethnic groups in the United States through the use of ethnic marketing strategies.
  • Target new segments of customers during Black Fridays which offer lucrative sales.
  • Increase its market presence by growing its stores in the rural regions which has its low presence.
  • Acquiring new labels and newer brands to improve sales.

Threats

Among the threats that Kmart should consider during its operations and planning includes:

  • Economic slowdowns which can shift customers to other retail stores with cheaper offers such as Wal-Mart.
  • Its profit margins which are already down can be driven down further by price wars.
  • Competition from its three key competitors, Wal-Mart, Macy’s and Target. The market share of high-end or whole foods retailers, Target and Wal-Mart as well as their price competitiveness is increasing their market share.
  • External changes by the government such as taxes and policies.
  • Inability to absorb increases in prices due to the smaller scale versus national competitors.
  • Declining profits might pressure the already weak position of this store financially.
  • The wallets of core shoppers can be affected by economic downturn.

Why a SWOT analysis of Kmart is crucial

A SWOT analysis of this company provides vital information to the company executives as well as people who want to understand the core business and operations of this company better. Kmart’s SWOT analysis utilizes information from different secondary and primary sources. This information or data is analyzed and presented in a detailed and consistent manner that is easy to understand.

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Sources

http://www.investopedia.com/terms/s/swot.asp

http://www.managementparadise.com/forums/principles-management-p-o-m/208505-swot-analysis-kmart.html

http://www.businesswire.com/news/home/20120920005819/en/Research-Markets-Kmart-Corporation-Company-Profile-SWOT

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