Keep an Eye on Your Business Competition


Vizions In Motion Kmart vs its competitionIn the 1960s, a little discount store called Kmart opened its doors.  One store turned into many.  The Kmart Corporation soon dominated the discount market to the point where few once believed that any competitor could shake its grip on the business competition.

Kmart led the pack by being the first to introduce modern conveniences such as air conditioning, self-service displays and shopping baskets.  The “blue light special” became an American icon.  Kmart put a number of competitors out of business so why should they be worried that competitors would take any market share or even catching up.

When Did Kmart Start to Fall Behind

In the 1980s, the company’s focus shifted.  Kmart’s corporate office turned its attention and finances on other companies it created or acquired like Sports Authority, Builders Square and Waldenbooks.

Without the required focus and efforts to maintain its core brand, Kmart’s fortune and superstar status also shifted.  Kmart maintained a high dividend so there was little money available to improve its stores.  While the competitors remodeled their stores, Kmart stores became outdated and withered.  As Target and Walmart invested heavily in computer technology, Kmart relied on its antiquated systems.

Business Competition Stepped Up

While its competitors adapted to changing consumer needs and market demands, Kmart experimented with different logos and names.  When Kmart finally began a long overdue overhaul of its stores in the 1990’s, Walmart already overtook it in sales and market share.

Eventually, Kmart filed for Chapter 11 bankruptcy protection.   Hundreds of Kmart stores were sold or closed and tens of thousands of employees were laid-off.  During that time, Walmart opened new locations in record pace.  Kmart was consistently one step behind its customer needs and two steps behind its competitors.

Where Did Kmart Go Wrong

Some business architects and strategists feel that the corporation failed to create a coherent brand image.  Others felt that there was too much diversification and not enough focus on the brand that once brought in the majority revenue.  Almost all agreed that they also did not properly manage the changes needed to accommodate the market and respond to their competition.

Can Kmart Come Back?

Some feel that Kmart has an opportunity to come out of bankruptcy stronger than ever but only if they successfully re-design and re-architect their business.  Many business architects have their own opinions on how that can be accomplished but only time will tell which methods work (or did not work) for Kmart.

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About the Author

Vizions In MotionAn advocate for clients to operate and deliver to their full potential by incorporating business architecture, solution design, strategic planning and change management.View all posts by Vizions In Motion

  1. Jacob Barin
    Jacob Barin10-27-2011

    This is a very interesting article. I never knew that K-mart was on top. It is scary they made so many business strategy mistakes but you are right, they lost sight of their competition and that made the difference.

    • Vizions In Motion
      Vizions In Motion10-28-2011

      @ Jacob Barin

      Kmart was so far on top at one point that few thought anyone else could be serious competition. It does not matter if your business is at the top or just starting out but you need to be aware of what is going on around you! The market and customers’ needs are constantly changing and the competition is not sitting still just waiting for your next move! Of course, there are times when you need to know when not to change things are working well — anyone still remember New Coke?

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