K-MARTSelma

Erick ChávezEduardo Reyes

Juan Jorge Palma

• Kmart is an American retail store specialized in the low income segment, offering its products normally at discount prices.

• Was founded in 1899 in Detroit, where it started a successful growth to finally become one of the most important stores in all the United States.

• As of year 1990, Kmart reported sales of $32 billion and a net income of $756mm with a net margin of 2.35%.

Net income

SWOT AnalysisSWOT Strenght Weaknesses

Oportunities Market presence, the consumer already knows the brand and can be easily re-established combined with an emergin middle income market

Bad practices inside the company that includes the lack of analysis in the company acquisitions and marketing can be offset with a strong environment in the retail sector and a growing middle class

Threats The macroeconomic volatility and exposure to competitors has to be fought with the market presence and positioning of the brand

Bad financial situation and bad practices in the company combined with an exposure to macroeconomic volatility may cause bankrupcy

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1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

Bil

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Sales

K-Mart Walmart

-8%-6%-4%-2%0%2%4%6%8%

10%12%14%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

ROA

K-Mart Walmart

Principal Competitors: Sales/sq. Ft.

318 dls.

242 dls.

374 dls.

233 dls.

• We want to reposition the company image; we want to provide K-mart a new life. Although K-mart was an important company the last century, we need to change a major part of it.

• We are preparing the release of a new super market, Organi-K, needless to say all products are going to be organic with the most competitive prices in the market, so all the middle-income families that care about their health, and live in the cities or in the suburbs can shop there.

Organi-K

• Implementing a B2B strategy, with better contracts that give more confidence to our suppliers –long term contracts- and make a win-win situation.

• We are looking to improve the relationship with suppliers to get more flexibility on the payments. This will help the company to lower costs and have always-fresh-to-go merchandise in our stores.

• Based on the Pareto’s law, we notice that with a 20% of the stores concentrated in urban areas, the company can generate 80% of its revenues. This will help Kmart to improve service and products offered in this 20% and also to renew this stores to give a better image to the company,

• Our implementation plan for every aspect will be cost effective and efficient. It will be comprehensive and it will attack every aspect that needs to be changed in the organization.

• In spite that our competition offers advisory services, you will have to sign two different contracts if you want to have human resources (PWC) and financial analysis.

• Some of them are specialized in accounting advisory, such as audit committees, financial statements or tax services (KPMG) Or consultant team is integrated by psychologist, risk managements and economic experts; Because of this, we offer the best option to implement the reorganizational plan.