Kmart Is Back in the Game

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The Sources or source which published the news item Get basics right, do the maths. Kmart is back in the game. The West Australian, West Business, March 16-17, p. 11. A brief summary of the event In 2008 Kmart was “cluttered with products” and had “dirty, cluttered” stores. The pricing of products were way too expensive and they were struggling to make a sale. They were selling $4000 BBQ’s and Guy Russo believed that if they are going to sell high market priced items then they have to offer the expertise to go with it. Wesfarmers Chief Executive, Richard Goyder, brought Guy Russo into the organisation to make a change within the company. Guy Russo was the managing director for McDonalds and had retired for two years before starting his…show more content…
Although he didn’t know the culture or values of the organisation he was still able to transform the company around. It was said to be “One of the most amazing turnarounds in Australian retail, at least in the last decade.” At the functional level, it was about changing the stores to be more presentable and training staff on fast-paced and friendlier customer service. The business-level was about the volume-driven strategy and at a corporate level it is about Wesfarmers deciding if they want to open up more stores. What can be learnt from the event? How does this event (a news item) contribute to a better understanding of the topic assigned for your presentation? These strategies are not used in all companies, but can prove that cost advantage influences competitive advantage in any business. It is important to do internal analysis of a company to determine what can be change in order to gain competitive advantage. Through looking at the internal analysis for Kmart it was important to look at the supplier’s power, the target market and the volume driven strategy. So at business-level strategy a business must look at their competitors, overall profits, low pricing, new store opening and advertising. Through Kmart adapting to cost leadership it meant the company focused on low prices, high volumes being sold and high market shares. Can you predict the further development of the situation? What might happen next? In order for an organisation to succeed
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