...I. Problem For Sears Holding Company (SHC) to come up with a business strategy that will address competition, culture, and synergy and create a distinct brand image and identity for the company, which will help them succeed in the long run. II. Subproblem For the two companies, Kmart Holding Corporation (“Kmart”) and Sears, Roebuck & Co. (“Sears”) to be able to act as one company and create value. III. Objectives 1. To create a brand image identity 2. To create a culture of success 3. To generate consumer loyalty 4. To appropriately position the company in the retailing business industry 5. To be able to address competition 6. To make SHC a profitable company in the long term 7. To build a broader customer base IV. Case Facts and Analysis The merger of Kmart and Sears in late 2004 occurred to gain competitive advantage over its competitors by combining strengths of Sears and Kmart for the long-term value for SHC. This merger will benefit both companies in an ever changing and competitive retail industry. SHC will be able to enter into new markets with its combined expertise of Kmart in discounter stores and Sears in department stores. This merger benefits both companies in different ways separately and to the new merged entity – SHC. Kmart will benefit from the planned cost sharing of several of Sears leading proprietary brands as well as present opportunities to capture significant revenue and cost synergies including merchandise and non-merchandise...
Words: 894 - Pages: 4
...problem solving. The most widely used parts included in this type of essays are: business plan, financing strategy, organization of the company, business project, competition, strategic planning. The rapidity of business development 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 sample is the property of Essay-Paper.net. If you use this 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...
Words: 633 - Pages: 3
...A resurgent Kmart, home of the blue light special, is buying the once-dominant Sears department store chain in a surprising $11 billion gamble it is counting on to help both better compete with Wal-Mart and other big-box retailers. Led by Kmart Holding Corp. chairman Edward Lampert, the new Sears Holdings Corp. would be the nation’s third largest retailer. Both chains would survive, but several hundred stand-alone Kmarts throughout the country are expected to be transformed into Sears stores. The goal: A quick kick-start to sales away from Sears traditional base of shopping malls. Lampert and Sears chairman and CEO Alan Lacy, in announcing the deal on Wednesday, promised up to $500 million a year in savings within three years from store conversions, back-office job cuts, more efficient buying of goods and possible store closings. Shares of both Kmart and Sears, Roebuck and Co. surged on the news, but some analysts are skeptical that it amounts to a home run. “Both have been broken in some sense,” said Dan Hess, president and chief executive of Merchant Forecast, a New York-based independent research company. “Kmart has to learn to survive in a Wal-Mart world and Sears needs to learn to survive in a world of Home Depot and Lowe’s.” Lampert, 42, was as an assistant to Robert Rubin at Goldman Sachs & Co. before leaving to form a hedge fund at the age of 25. He orchestrated the deal and will lead a new board that will be dominated by Kmart directors. “We need to have a very...
Words: 1392 - Pages: 6
...Sears Holdings Corporation is a company that came from two very well known organizations, Sears and Kmart. Both companies go back even farther than the 1900s and unfortunately both companies experienced financial difficulty at one point. With the merger Sears Holdings Corporation has the experience of both organizations as well as their different style of operating. Along with an improved customer base and a new outlook Sears Holdings Corporation is experiencing financial growth. Richard W. Sears was an agent at a railway station. This job provided him with loads of free time, so he would sell lumber and coal to local residents for extra money. During his employment with the railway station he came across some discarded watches and decided to repair and sell them. He made a good profit and decided to try it again. In 1886 Sears began the R.W. Sears Watch Company in Minneapolis. After moving his business to Chicago, IL Sears advertised for a watchmaker and came across Alvah C. Roebuck who claimed to do excellent work. In 1893 Sears Roebuck and Co. was formed. Adapting the motto, “Shop at Sears and Save” Sears quickly became the place where farmers shopped to save money and cut out the middleman. Sears’s prices were much cheaper than rural stores. By 1895 Sears was producing a 532-page catalog with many other items, such as stoves, women’s clothing, wagons, furniture, china, firearms, glassware and baby carriages etc. “Sales in 1893 topped $400,000 and two years later...
Words: 2213 - Pages: 9
...November 21, 2011 Organizing Paper Sears Holdings Corporation is one of the largest retail stores with four-thousand retails stores. Sears is also a leading retailer for home appliances, and in other areas from tools to automotive maintenance. Also, the corporation receives over eleven million service calls each year; it is the largest home services provider. The company has many brands; a few are Kenmore, Craftsman, and Diehard. They also have various clothing brands two of the best known are Lands’ End, and Joe Boxer. Sears and Kmart also offer the Country Living Collection. Among the companies’ many other attributes they were named the Energy Star Retail partner of the year for 2011. The corporation has several subsidiaries through which it operates; these are Sears, Roebuck and Company and Kmart Corporation. Sears merged with Kmart in 2005 after the shareholders of both companies voted to do so (Sears Holdings Corporation, 2011). Kmart and Sears felt that by merging they could be more demographically accessible. Both companies shared a “customer-focused” culture and this would help them to improve revenue. Maintaining the two brands allowed the corporation to focus on different demographics without making anyone feel left out. Now the company is ran by a board of directors which includes members from both companies. Shareholders from the Kmart Corporation were given stock in the new company. Shares of Sears Corporation were separated into a percentage...
Words: 1196 - Pages: 5
...Changing Organization In late fall of 2004 the merger of two struggling companies, Kmart and Sears was announced. At the heart of this merger was the chairman of Kmart, Edward Lampert, a 42- year old investor, who made a name for himself by buying Kmart out of bankruptcy. The cost of this merger would be 11 billion dollars. Due to the strong brand recognition of Sears their name would become the face of this merger. They would become the Sears Holding Corporation (Oneal & Jim, 2004). Many believed that this was not the right course of action for these two organizations. Taking two companies that were once very successful, but now were struggling was not going to be the magic solution that they were hoping for. They both were failing and until that could be corrected, the question that everyone was wondering was would this only delay the inevitable. While it would make them the third largest retailer, the underlying issues that both companies were already facing it what truly needed to be addressed (Chandler, 2004). Even knowing this Lampert had high hopes as he had done well with Kmart, he had taken them from the brink of death and brought them back even without extensive management experience. He believed that he could do it again and make Sears Holding Corporation a strong competitor to Wal-Mart (Oneal & Jim, 2004). Let’s discuss background of each of these organizations. Kmart Kmart was born in Detroit in 1899. It carried 1,500 items that cost no more than a dime at...
Words: 2745 - Pages: 11
...Pre-Merger Kmart and Sears Prior to the Kmart-Sears merger, both companies had glaring failures. Having been two of the oldest national retailer’s, the largest problem they shared was failure to stay current with the changes in trends throughout the years which was ultimately leading to their swift demise. Kmart was successful as a low-cost clothing and home-goods retailer, however once competitors such as Wal-mart and Target entered the game with similar quality products and the same low prices, Kmart took a large hit. In the 1990’s Kmart began opening a variety of ‘Super Kmarts’ that incorporated a larger grocery department that included fresh produce to compete with Wal-mart. In the end, the food retailing strategy was deemed a failure. In January of 2002, Kmart filed for bankruptcy protection after several of their suppliers began withholding deliveries and demanding cash from the retailer (Davies, James, Schindelheim & Valenti, 2002). Edward Lambert gained control of Kmart which lead to an increase in stock value based on Lambert’s previous successes. Kmart stores began closing in regions that were deemed the most unprofitable, and a focus was put on urban areas that were not in Wal-Mart dominant regions (Snavely, 2003) Sears battled similar problems especially in terms of staying current and competitive to large big-box retailers like Wal-Mart. Due to it’s historic image of quality goods and regular pricing, it was becoming difficult to draw in customers even...
Words: 2244 - Pages: 9
...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...
Words: 513 - Pages: 3
...Kmart და Sears: ისევ პრობლემები??? 2002 წლის 2 იანვარს კორპორაცია Kmart გახდა უდიდესი საცალო მოვაჭრე ამერიკის ისტორიაში, რომელსაც დასჭირდა გაკოტრების საქმის წარმოება. Kmart-მა მოითხოვა რეორგანიზაციის საქმის დაწყება აშშ–ის გაკოტრების კოდექსის მე-11 თავის მიხედვით და განაცხადა, რომ დაფარავს კრედიტორულ დავალიანებას და გააკეთებს ბიზნესის რესტრუქტურიზაციას ისე, რომ შეძლოს სასამართლოს დახმარების შემდეგ დარჩეს კონკურენტუნარიან მოთამაშედ საცალო ბაზარზე. Kmart-მა თავი დააღწია გაკოტრება 2003 წლის მაისში, თუმცა, ამ დროისთვის ჯერ კიდევ არ ჰქონდა ჩამოყალიბებული ძალზედ კონკურენტულ ბაზარზე წარმატების სტრატეგია. ამერიკულმა დაბალი ფასების საცალო ბიზნესმა 2004 წელს განვითარების მწევრვალს მიაღწია და ამ დროისთვის Kmart-ს უკვე აღარ ჰქონდა მკაფიოდ გამოხატული პოზიცია ამ ინდუსტრიაში. მისი ძირითადი კონკურენტები იყვნენ Wal-Mart, Sears, Target, Kohl’s, J.C. Penney, გარდა ამისა, იყვნენ მეორადი კონკურენტები კონკრეტული კატეგორიების მიხედვით. ამ ბაზარზე ლიდერი იყო Wal-Mart, რომელსაც ჰქონდა ყველაზე დიდი გაყიდვები და მცირე დანახარჯები (შესაბამისად, დაბალი ფასები). Wal-Mart-მა მოქმედება დაიწყო ამერიკის არაურბანულ ნაწილში და აქტიურად იზრდებოდა საერთაშორისო მასშტაბით. წლიური გაყიდვების მხრივ მეორე ადგილზე იყო Sears, რომელიც ბაზარზე პოზიციონირებული იყო მყარი საქონლით, როგორიცაა საოჯახო ტექნიკა, ასეთი საქონლის გაყიდვების 40% კონტროლდებოდა Sears-ის მიერ. თუმცა Sears-ის გაყიდვები მაინც შემცირდა, რადგან მომხმარებლები უფრო და უფრო ამჯობინებდნენ Sears-ის მოლის ტიპის მაღაზიებს ავტონომიური ბიგ ბოქს ტიპის ჰიპერმარკეტებს...
Words: 818 - Pages: 4
...Overview Kmart is a general merchandising company. The benefit that Kmart has is that it can cater to the basic needs of any human being. Kmart has a “blue light discount” specials strategy that can water the appetite of any customer by stimulating the essence of excitement, suspense, surprise and pleasure in a customer (Sptimes). The blue light special is a system which Kmart officials randomly get o the intercom and declare the famous slogan “attention Kmart shoppers” and shine a blue light in the department of the store where there is an extreme discount. This strategy is capable of impacting any nation or culture world wide because everyone loves discounts and good surprises. Kmart earned a customer satisfaction reputation because of its blue light tradition. The way it worked was by having random store officials in different departments shine a blue light to symbolize that there has been some major cut backs (in pricing) in their specific departments. It worked to Kmart’s benefit at one point because it would cause customers to want to visit the stores more often and sometimes stay in the stores longer for shopping because of anxiousness. Usually when the blue light comes on, you would hear a representative say, on the intercom, “attention Kmart shoppers” (Wikipedia). The slogan became so popular that it even had spot lighted moments in movies. Coming up Kmart was one of the prime merchandising companies along side Wal-Mart and Target, but unfortunately, they had...
Words: 1119 - Pages: 5
...Introduction Sears, the ten largest retailer in the united states was founded by Richard W. Sears in 1925. By 1963, Sears became the number one retailer in the US. Kmart was founded by S.S. Kresge Co in 1967, becoming the second largest retailer in the US. In November 2004, Sears and Kmart announced the merging of the company. The initial purpose of both companies merging is to leverage the combined strenghts of Sears and Kmart. They merger also to obtain greater long term value. The new corporation, which selected preferred name is Sears Holding Corps over Kmart, planned to offer customers a new experience. The Problem The preliminary problem statement is “through organizational behavior, how would Sears Holding Corp improve their current CEO approval rating. The approval rating sits at 30%. Some suspect the approval rating is a reflection decisions made under the CEO watch. One decision that was questioned was fund manager tur ned CEO Eddie Lampert purchasing a $40 million dollar home, while 173 stores were being closed. Forbes magazine called him the second worst CEO in an American company with views suggesting that he has destroyed Sears. Since Sears and Kmart merged, the organization has been on the decline. There was a lost of 4.7 billion in revenue, which is the second worst among peer group. No matter how hard Sears is trying to change their image, they are not having much success. Preliminary Solutions Now that the problem was discovered. The...
Words: 429 - Pages: 2
...We are proposing that Sears Holding Corporation (SHC) divest its subsidiary Kmart Corp. Sears was once a retail giant that offered home appliances, clothing, and hardware. Kmart Corporation acquired Sears, Roebuck and Co in 2005 in the optic of accelerating their process of expansion as Sears targeted several Kmart locations. The merger of those corporations was also made to facilitate the access of branded products to their respective customers. They kept their own specific brands to continue focusing on their customers. By sharing their intelligence data they wanted to improve their revenues and minimize their overall annual costs. However now because of the recession, Sears is becoming less viable as time goes on and it stays alive by shutting down over a hundred storefronts across the nation. Kmart wanted to compete with large discount retailers like Wal-Mart and Target so they acquired Sears which now seems to be their downfall. Kmart sales have gone down tremendously because it has not successfully anticipated consumers’ needs. The immediate response of the merger was a decline of 84% in income and later on a net of $170 million loss during the first quarter of 2011. Even if the company’s profit has been positive this year, it seems that it is not at its fullest capacity. Sears’s problem is that it needs to focus more on their own identity and help its own brand image. By dropping Kmart, they can revamp their old fashioned image and give consumers what they want. By...
Words: 944 - Pages: 4
...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...
Words: 523 - Pages: 3
...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 Martha Stewart brands, Jaclyn Smith and Thala Sodi, while Sears is a mid-western, Middle American demographic, featuring mostly home goods –Craftsman, Kenmore and Diehard brands in appliance. By combining both brands...
Words: 1074 - Pages: 5
...Diversification Strategies Arissra Stamps Strayer University Diversification Strategies Types of Diversification Strategies Diversification is a business strategy that allow a company to establish additional lines of commerce that maybe different from the current products or services. Depending on company’s directions, the different types of diversification that company utilize are: Horizontal, Vertical, Concentric, Heterogeneous (Conglomerate) and Corporate Diversifications (Small Enterprise Strategic Development Training, 2009). Horizontal Diversification is used when the company wants to develop new product or offer new service that could appeal to current customers. For example, a dairy who produces cheese wants to expand its products with new types of cheese. A construction company may choose Vertical Diversification; it may venture into new selling product such as paint and construction materials while the core business remains in providing construction services. Concentric Diversification is the method a company uses to enlarge the production portfolio by adding new products and aiming to utilize the potential of existing technologies and market system. The best example of this strategy would be a bakery who sales bread, pastries and cake who begins to sale dough products. Heterogeneous or Conglomerate Diversification is opposite from Concentric because it focus on new products or services that do not use existing technologies and does not have any commercial...
Words: 1684 - Pages: 7
