Rosales, Francis Angelo D.

02/10/2020

BSA – 1A

Case Study About Kmart and Walmart

Walmart and Kmart, two of the biggest department stores up to this

day. With such great business schemes how did they manage to stay
ahead of their competition.

These two retailers started back in 1962. Kmart was founded by S.S.
Kresge and Walmart was founded by Sam Walton. Both companies were
discount stores which also sold the same products. By the 1980s, Kmart
was ahead of its competition, having twice the stores, three times the sales
revenue and greater visibility through its advertising and large urban
presence. With the addition of Joseph Antonini, the company had a very
bright future ahead of it.

Since Kmart was very ahead that it was really difficult to compete
against, Walmart decided to focus on smaller markets until they were ready
to enter the big leagues. When it was finally time for Walmart to compete
against these retail giants, they developed a strategy that would actually be
their winning formula for years to come. The company decided to invest
heavily on operations, particularly sophisticated computer systems in order
to track and replenish merchandise quickly and efficiently. Kmart on the
other hand, focused heavily on advertising and marketing with Antonini
getting television stars to advertise the company itself. Kmart became
publicly known because of their superior marketing. Sam Walton kept
focusing on operations and computer systems, trucks and everything that
would make their work efficient.
 By 1991, their cost of operations reduced significantly, even matching
Kmart’s sales in that year. It proved to be their biggest strength they
continued to edge out Kmart for years that came by. Though Kmart was a
lot more famous, they were slowly losing steam and were actually having
internal issues. Some reports say that there were always shortage of
supplies and shelves are sometimes not restocked. Kmart’s total market
share dropped from 34.5 to 22.7 percent. While Walmart’s grew from 20.1
to 41.6 in the same period. It wasn’t long before Kmart finally filed for
bankruptcy finally merged with Sears to form Sears Holdings.

Walmart’s success was defined an operations-based company. They

relied on total cost reduction and efficient service that would generate more
income for them. Not only did they spend less but they also gained more.
Their success up to this date shows the impact of excellent operations
management in a business. Not only will it improve a business but it can
also transform it in to an economic giant that would last a long period of
time.