Kmart
was started off as an S S Kresge Company, a retail store
which used to offer goods at a discount price way back
in the year 1899 by Sebastian S Kresge. However, the
name of the company was changed to Kmart in the year
1962. As a matter of fact, its biggest competitor Wal-Mart
opened its first store in the same year. Kmart's customers
were offered goods at a discount of 20%. Its initial
success motivated the company to look out for further
growth and what better way of growing than increasing
the number of stores. It kept on increasing the number
of its stores as many as it was possible for them in
the city areas.
While
Wal-Mart aimed at gradual development, Kmart was happy
making huge leaps forward which were without any precise
focus. On its way to expanding, it committed many mistakes
to grow its business fast. Subsequently to these moves,
it failed to attract new customers and also in maintaining
good relationships with its old customer's. It further
failed in maintaining a healthy relationship with its
suppliers too. All these had a negative effect on Kmart
performance and it incurred huge losses even as its
competitors became more profitable. Finally in January
2003, it filled for bankruptcy and sent shock waves
to the whole retail industry. Every one sparse believed
by the idea how could a brand as widely recognized,
accepted and firmly fixed be teetering on the brink
of extinction.
Although
the prime reason was bad management, it was not the
only reason which led to its demise. There were several
other reasons which contributed to the fall of the giant.
We will have a look at some of the reasons like poor
brand management that have sounded the death knell for
Kmart. |
