Post on 03-Jan-2016
BUSINESS PLAN EVALUATION: KMARTSteve Horbachuk, Karen Huang, Dusan Ivanovic, and Michael SpoonerMGT310 4/13/2008
Introduction and History
1899 – SS Kresge Company founded by Sebastian S. Kresge
New Strategy: Kmart stores and Corporation 1990 - Redesigning the identity 3-way operation: Traditional Kmart Stores, Kmart
Super Centers, Big Kmart
Introduction and History (cont.)
Kmart’s Mission Statement: Kmart will become the discount store of choice for middle-income families with children by satisfying their routine and seasonal shopping needs as well as or better than the competition
Desired Customer Group: women with children at home in households with an annual income of $20,000 to $60,000
Introduction and History (cont.)
2002 – Kmart filed for reorganization under Chapter 11 of the US Bankruptcy Code
Stock plunged, downgraded credit, removed from top 500 leading stocks
“Cutting down $350 million on annual expenses through reorganization and job cuts”
Result: 600 stores closed, thousands of jobs cut, new management hired, new investors
Introduction and History (cont.)
2004 – Sears Holdings Corporation emerges as a merger between Sears and Kmart
3,800 retail stores across US and Canada $55 billion in annual revenue Competing: Sears Essentials to become Sears
Grand, new store concept Speculation: Sears Holdings dropping Kmart in the
next decade
About this Store
Located in Watertown, CT Opened August 6, 1976 Small store (compared to others)
Competition
Obvious Competition Wal-mart Target
Local Completion Grocery Stores Staples
Management Cycle
Management Cycle (cont.)
Set Goals Business/functional-level goals articulate company
direction and give associates a plan for personal workload
Evaluate Performance Each associate and his/her manager will complete
ratings on Business Results and Organization Values
Management Cycle (cont.)
Assess Potential Each associate will be evaluated on their potential
next assignments and their capability to accept broader scope or accountability
Reward Performance Based on the rating from their performance, an
associate may be rewarded for excellence by an increase in their compensation
Staying Competitive
Aggressive pricing is NOT a top priority Exclusive, licensed and quality products
Focus on customer service and product knowledge
Store Managers Oversee Operations within Individual Stores Implement orders from corporate Assign tasks and follow up Deal with customers when needed
Chain of Command
Floor employee/associate Department managers Operations and Assistant Managers Store Managers District Manager
Staying Informed
Manager holds “huddles” to keep employees informed and share sales data
Culture
Corporate code of ethics Manager as “role model” Strict dress code Teamwork, focus on the customer Community contributions
Technology
Improved communication with corporate and other stores
Faster, more organized systems Conference calls
How is Performance Measured?
Through measuring their overall sales performance of the store compared to other stores in the district’s overall sales
Type of Control Utilized
Concurrent control: managers monitors the ongoing employee activities to ensure they are consistent with the company’s performance standards
Controlling Through Associates
Gets the right things done with a sense of urgency Acquire skills that will impact his or her personal
performance Constantly works to improve their knowledge
about the business and apply Identify multiple ways to achieve results
Controlling Through Managers
Understands how the organization’s processes and functions
Uses financial data to accurately diagnose business conditions, identify key issues, develop strategies and plans to achieve the organization’s financial goals
Evaluate overall success by examining the total impact of decisions and actions
Conclusion
Recommendations for improvement Update mission statement Conduct more research on products, services and
practices Increase Information Technology resources and the
training of personnel Procedural evaluations by management outside of the
local branch