...Acquisition of Sears and Kmart The rapidity of development of businesses today requires the knowledge of all processes associated with leading companies in Canada and the United States as well as in the rest of the world. This is a free extract from business school essay created by one of our writers. This business essay sample is the property of Essay-Paper.net. If you use this business essay paper, you should cite it properly. [...] The Kmart Holding Corporation informed about its intention to acquire Sears and all business publications all over the country reported on the outcomes on the retailers, the real estate implications and the resolve of this step. It is clear that the acquisition of Sears by Kmart Holding Corporation may change the course of future corporation’s actions and plans. The Kmart is presently number three retailer after Wal-Mart and Target in the country. An academic analysis that was conducted on this event states the positive and negative results of the acquisition. [...] Tom Speh, the Rees Distinguished Professor of Distribution at Miami University, thinks the acquisition is a wrong step in this situation: "I do not think these companies have clear aims and will fit each other," he states. "It is not a similar situation with a merger of Kraft and Nabisco where one takes present opportunities and sells more product to reach the greater benefit. Until this moment, I do not see a weighty reason for acquisition." [...] The next problem is whether...
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...Mergers and Acquisitions Dr. Daniel Goldsmith BUS -508 Contemporary Business Strayer University February17, 2014 Mergers and Acquisitions Use the Internet to research a publicly traded company in the United States that has undergone a merger or acquisition within the last three years. Take notes on the circumstance surrounding the merger or acquisition. Question1. Examine the circumstances that resulted in the merger or acquisition for the selected company. Speculate on two reasons why the resulting decision to merge or to acquire/ be acquired was made. The bigger is often better in the world of corporate, which may encourage merger and acquisition in general. In fact the result is not always good, some of newly created companies go bankrupt and in some cases, mergers companies disband in a sort of corporate divorce. There are no guaranties in corporate mergers, it is inherently risky and without proper strategy, intuition, and knowledge mergers can easily fail. For instance I will examine the merger of Sears and Kmart and evaluate the merger circumstances and the result of the merger. The merger of the two corporates came as a result of the failing of the legend store Sears in the end of the twentieth century. Sears found itself slowly failing as its competitor’s success of low-end big stores likes Target and Walmart, and high- end department stores like Saks Fifth Avenue. On the other hand Kmart itself was struggling and field chapter 11 bankruptcy...
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...Mergers and Acquisitions Dr. Daniel Goldsmith BUS -508 Contemporary Business Strayer University February17, 2014 Mergers and Acquisitions Use the Internet to research a publicly traded company in the United States that has undergone a merger or acquisition within the last three years. Take notes on the circumstance surrounding the merger or acquisition. Question1. Examine the circumstances that resulted in the merger or acquisition for the selected company. Speculate on two reasons why the resulting decision to merge or to acquire/ be acquired was made. The bigger is often better in the world of corporate, which may encourage merger and acquisition in general. In fact the result is not always good, some of newly created companies go bankrupt and in some cases, mergers companies disband in a sort of corporate divorce. There are no guaranties in corporate mergers, it is inherently risky and without proper strategy, intuition, and knowledge mergers can easily fail. For instance I will examine the merger of Sears and Kmart and evaluate the merger circumstances and the result of the merger. The merger of the two corporates came as a result of the failing of the legend store Sears in the end of the twentieth century. Sears found itself slowly failing as its competitor’s success of low-end big stores likes Target and Walmart, and high- end department stores like Saks Fifth Avenue. On the other hand Kmart itself was struggling and field chapter 11 bankruptcy...
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...Assignment 2: Mergers and Acquisitions Mer Jean Fronkoua Business 508028VA016-1146-001: Contemporary Business August 9, 2014 Mergers and Acquisitions Mergers and acquisitions are common place in the business world today. Many companies merge or become acquired for different reasons. In 2004, Sears and Kmart, two of the largest retailers in the nation, combined forces to become the third largest retail company in the nation. Although thought to be a wrong move, the company struggles to streamline its new product line to the word. Circumstances surrounding merger and acquisition Both companies are a name in itself, but in merging, they both bring something to the table. Competition, along with brands, will allow the stores to be more competitive, while focusing on the consumer by offering low prices (Kmart) and reputation (Sears). Sears has been slow in moving away from locations in the mall to free standing buildings. Along with bringing a name to the table, each company brings money and real estate, along with the vision that Edward Lampert, financier, have for the company. He sees the merger of both companies as creating a positive outcome from two negative situations. Sloan (2004) Why did the companies decide to merge? Both companies are about branding: K-mart in its apparel and music, Sears with its appliance. K-marts strong point is marketing through cultural ethnicity featuring...
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...Scott C. Kearns MGT6890 6/20/12 Kmart and Sears: Still stuck in the middle? Just two years after filing bankruptcy, Kmart Corporation stunned the retail industry with the acquisition of Sears in November of 2004. The acquisition of Sears for Kmart was a part of a growth strategy to help build and strengthen the once dominant giant discount retailer. Between the 1960’s and through the 1980’s Kmart was the number one leading retailer in the discount department store industry. For 30 years Kmart seemed to be doing everything right but as they were growing they were also slipping into a deep hole. Many factors played into their eventual retrenchment but supply chain management was their biggest fault. During the 1990’s growing competitors like Target, Sears, and Home Depot took a piece of Kmart’s market place pie with Wal-Mart taking the biggest slice. As sales declined over time due to the increased competition, management also was neglecting the company’s supply chain operation. This neglect created a surplus of goods doomed for blue light specials that would have to be stored in semi-trucks beds behind the store because the current products on the shelves weren’t moving. By the start of 2000, Kmart locations looked like they had been foreclosed on with giant cement parking lots filled with maybe a dozen cars on a good day. Eventually retrenchment day came Kmart filed for bankruptcy in January of 2002. Kmart was able to regain control of the company and emerge from...
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...Kmart has made some horrible decisions in the past few years. They have numerous competition throughout America from Wal-Mart and target. Kmart failed to keep with the times and update their stores. The store designs have not changed since their inception and it seems that no money was ever invested into modernization. Even their cash registers were out of date and obsolete from the current systems in use by Wal-Mart. “No matter what Sears said, they weren’t keeping the promise. Consumers are pretty sophisticated, and they walked into these stores and it was the same old place … without the freshness, the excitement or the interactivity of the experience.” (Knutson, 2011). Kmart is owned by Sears Holding. In recent years Sears has closed dozens and dozens of Kmarts. I believe this is due to the lack of interest in the store…the old dirty feel of Kmart is not on par with that of Wal-Mart or Target. The assumptions by Kmart management were that sales would continue without change to the store as they had for decades. The second assumption was that acquisition of other chains such as Walden, Borders, and Office Max would boost their sales by expanding their product sales line. The first assumption was incorrect because Kmart failed to recognize their competitor’s advantages. One key advantage was simply the new updated feel and cleanliness in superstore shopping that Wal-Mart offers. The second assumption was incorrect also because during Kmart’s buying spree they failed...
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... Jeremy Stack Net present Value, Mergers and acquisitions When brainstorming on the possible ideas of mergers or acquisitions it was easy at first to automatically think similar corporations within the same market either small or big or even in direct competition. Upon researching and reviewing the required readings I realized there are numerous types of mergers and acquisitions that could and should be considered in the terms of better business for my company (Target), for the market, and for the consumers in general. The Target Corporation is an American retailing company. It is the second largest discount retailer behind Walmart. With that being said it would at first be a natural thought maybe to think of a merger with Walmart, but as Target being second to them it wouldn’t necessarily be a merger as it would be an acquisition by Walmart and probably wouldn’t make the most business sense even if both were allowed to remain as separate entities. Beyond that certain regulatory bodies would probably find a merger or acquisition to constitute a monopoly and threaten competition within the respective industry. So what would be a company worth merging with or acquiring? One such company that comes to mind which I believe would be considered a Horizontal merger would be the Kmart Corporation as they are in direct competition. Kmart is listed as the 3rd largest discount retail chain behind Walmart and Target. Kmart has struggled in the last 10 years with re-invention...
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...MMPBL/510 7-25-2011 Remington Peckinpaw Davis Project Management Plan Project Management Research Worksheet Task A: Problem/Opportunity Statement | Instructions for Task A: In the Response row, write out the problem/opportunity statements for the scenario for each of the team members. | Response to Task A: Remington Peckinpaw Davis will become an industry leader and profitable online trader by aligning project management strategies with organizational goals to provide customers with a highly efficient online trading system. Remington Peckinpaw has several different projects going on simultaneously in addition the internet and real estate investments are proving to have increasing profits. The increasing business has also attracted newer tech-savvy competitors with a host of new tools that has driven RPM management into confusion on how to manage projects to help compete against the new competition. | | Generic Benchmarking—The purpose of generic benchmarking is to identify potential solutions to the problem statements defined in Task A. You will do this by looking at how companies in other industries have dealt with similar issues. | Topic A: Data Reliability | General Electric is a company that operates in many facets. “GE is an advanced technology, services and finance company taking on the world’s toughest challenges. Dedicated to innovation in energy, health, transportation and infrastructure, GE operates in more than 100 countries and employs...
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...stockholders to realize significant gains or losses because it is not singularly focused on one business. Investopedia (2011) states that companies may become diversified by entering into new businesses on its own, by merging with another company or by acquiring a company operating in another field or service sector. One of the challenges facing diversified companies is the need to maintain a strong strategic focus to produce solid financial returns for shareholders instead of diluting corporate value through ill-conceived acquisitions or expansions. Wal-Mart and Kmart; along with Target are the three primary retail giants in the United States. This paper will compare and contrast Wal-Mart and Kmart Corporations. According to Wal-Mart’s website: “Wal-Mart serves customers and members more than 200 million times per week at more than 9759 retail units under 60 different banners in 28 countries. With fiscal year 2010 sales of $405billion, Wal-Mart is the world’s largest private employer; employing...
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...Running head: Sears Holding Business Analysis Sears Holdings Business Analysis Steven G Cole MGT/521 Leo Shelton Sears Holdings is an icon in the retail business since its founding in 1925. It survived the depression and many economic cycles since its founding. With the purchase of Kmart out of bankruptcy in 2005 and the unexpected recession of 2008 Sears has struggled financially. Their strategy of selling niche items of higher quality and brand names has not fared well in this valued based purchasing recession. They have continued to lose large amounts of money and continue sell off assets to raise capital. The CEO has announces new business strategy to implement to change the course of the company. Since the acquisition of Kmart in 2005 sales have declined steadily year after year. Last year alone Sears and Kmart had a total lose of 1.4 billion dollars. This year that amount is down to 421 million through the 3rd quarter. The continued movement of customers to discount stores like WalMart and Target has continued to erode the customer base at Sears and Kmart. Sears reputation of rundown stores and poor customer service is helping lead the way to the slow demise of the once retail giant. Sears is a leader in ecommerce investment, but poor customer experience in the store is translate to apprehension of customers to return to Sears online (Skariachan, 10/17/2011). In February 2012 in a note to shareholders, CEO Edward Lambert issued a lengthy letter to shareholders...
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...ACCT 600 MAFM CAPSTONE BECAUSE OF THE RISKS CAN COSTCO ACQUIRE THE #3 KMART? ABSTRACT The retail business is very competitive. Because the retail industry provides products and or services for the needs, wants, and sometimes feelings of the consumer it can be hard to determine what they like and don’t like. Moreover, with the economy, which by the way affects all businesses, you just do not have an exact science on how things will turn out. Industry businessman, economist etc. can only make assumptions based on occurrences. So, if you are in a business to make a profit, and satisfy stakeholders you need to have a plan. Sometimes the plan calls for mergers and acquisitions. Mergers and acquisitions can have a positive and/or negative effect. “According to a KPMG study, 83% of all mergers and acquisitions failed to produce any benefit for the shareholders and over half actually destroyed value.”(http://www.itapintl.com/...the-impact-of), to be a good CFO you must do the research to determine if acquiring another company will be beneficial. This report will identify the risk factors of the target acquisition company Kmart and the risk factors present in the parent company Costco. Our team will then show how these risks can be mitigated. BECAUSE OF THE RISKS CAN COSTCO ACQUIRE THE #3 KMART? KMART RISKS/MITIAGATION Many investors such as Costco may be unaware of all the risks associated with investing in a specific company. Providing current and future...
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...businesses—core business, their size, financials, global presence, use of e-business (marketing, sales, etc.). A great example of companies that utilized completely opposite paths in the business world is Wal-Mart and Kmart. Recently, Kmart is on an endless downhill spiral while Wal-Mart has risen to the top of the retail industry and is their financial strength is strong. Wal-Mart is the largest business enterprise in the world as well as the nation’s biggest employer and the number one retailer in the U.S. There are over 5000 Wal-Mart stores and they report sales over three-hundred billion dollars. Two million people are employed by Wal-Mart in twenty-eight countries in the world. Fortune magazine’s 2010 Most Admired Companies Survey ranks Wal-Mart among the top ten retailers. Kmart is now the #3 discount retailer behind Wal-Mart and Target. There are 1,300 Kmart stores located in 49 US States as well as Puerto Rico, Guam, and the US Virgin Islands. Compare and contrast their outcomes (one successful, one unsuccessful). Kmart and Wal-Mart both began in 1962 and they both sold the same products. The difference in their outcome is in their individual diversification strategies. Kmart paid little attention to its core business as well as its competition. Instead, Kmart purchased the Sports Authority, Office Max, Borders, Payless Drugs,...
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...Can Sears Reinvent Itself? | Sears, Roebuck and Co. used to be the largest retailer in the United States, with sales representing 1 to 2 percent of the United States gross national product for almost 40 years after World War II. Its legendary Big Book catalogue was considered the primary (and sometimes the only) source for everything from wrenches to bathtubs to underwear. During the 1980s, Sears moved into other businesses, hoping to provide middle-class consumers with almost every type of banking, investment, and real estate service in addition to selling appliances, hardware, clothes, and other goods. This diversification tore Sears away from its core business, retail sales. Sears has steadily lost ground in retailing, moving from the Number 1 position to Number 3 behind discounters Wal-Mart Stores, Inc. and Kmart Corporation. Sears had been slow to remodel stores, trim costs, and keep pace with current trends in selling and merchandising. Sears could not keep up with the discounters and with specialty retailers such as Toys R Us, Home Depot, Inc., and Circuit City Stores, Inc. that focus on a wide selection of low-price merchandise in a single category. Nor could Sears compete with trend-setting department stores. Yet Sears has been heavily computerized. At one time it spent more on information technology and networking than other noncomputer firms in the United States except the Boeing Corporation. It was noted its extensive customer databases of 60 million past...
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...loans,Time Warner/Aol, United Health/Sierra Health, Sears/Kmart, Pizza Hut/Taco Bell, KFC/A & W, and Amazon/Zappos. Sanofi and aventis, glaxo smithkline,bextex(beximco and padma textiles),sonyericcson, Exxon Mobil Procter & Gamble/Gillette Pfizer & Warner-Lambert Acquisition: Airtel and warid, HDFC Bank acquisition of Centurion Bank of Punjab for $2.4 billion Tata Motors acquisition of luxury car maker Jaguar Land Rover for $2.3 billion. Vodafone's purchase of 52% stake in Hutch Essar for about $10 billion. As of 2008, Hewlett-Packard has made a total of 116 acquisitions since 1986.[a][4] Its first acquisition was the F.L. Moseley Company in 1958. This move enabled HP to enter the plotter business, which was the predecessor to its printer business today.[5] In 1989, HP purchased Apollo Computer for US$476 million,[6][7] enabling HP to become the largest supplier of computer workstations.[6] In 1995, the company bought another computer manufacturer Convex Computer for US$150 million.[8] In 2000, HP spun off its measurement, chemical and medical businesses into an independent company named Agilent Technologies.[9][10] The company's largest acquisition came in 2002, when it merged with Compaq, a personal computer manufacturer, for US$25 billion.[11][12] The combined company overtook Dell for the largest share of the personal computer market worldwide in the second quarter.[13] Since then, stream of acquisitions strengthened HP position in the software business...
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...SEARS Marketing Plan Executive Summary Sears Holding Corporation is the fourth largest retailer in the United States and Canada. Its subsidiaries include Sears, Roebuck and Co. as well as K-Mart. The closing of the merger between Sears and K-Mart took place on March 24, 2005. Sears has more than 4,000 retail stores across the United States, Canada, Puerto Rico, and Guam. Sears offers products and services through over 2,700 branded and affiliated stores. Sears operates 894 broad-line stores and 1,354 specialty stores. Sears’ broad-line stores are mall-based locations. The specialty stores include Sears Hometown Stores that are mostly independently owned, Sears Home Appliance Showrooms, Sears Hardware Stores, Sears Auto Centers, and The Great Indoor Stores (Community, n.d.). Sears is the leading retailer in home appliance, tools, lawn and garden, electronics, and automotive repair and maintenance. They are also the largest home service provider and answers over 11 million service calls a year (About, n.d.). Sears’ values are built upon customer service and the company is committed to quality service and products. Sears aims to build lifetime relationships and trust with its customers. The Company prides itself on having a diverse customer base and values the customer’s individualities. As stated on the corporate website “Everything we do starts and ends with the customer.” (Diversity, paragraph 3). Sears also holds expectations from their employees. The Company values...
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