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Business PLAN evaluation: Kmart. Steve Horbachuk, Karen Huang, Dusan Ivanovic, and Michael Spooner MGT310 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

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business plan evaluation kmart

Business PLAN evaluation: Kmart

Steve Horbachuk, Karen Huang, Dusan Ivanovic, and Michael Spooner

MGT310 4/13/2008

introduction and history
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
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 cont1
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 cont2
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
About this Store
  • Located in Watertown, CT
  • Opened August 6, 1976
  • Small store (compared to others)
competition
Competition
  • Obvious Competition
    • Wal-mart
    • Target
  • Local Completion
    • Grocery Stores
    • Staples
management cycle cont
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 cont1
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
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
Store Managers Oversee Operations within Individual Stores
  • Implement orders from corporate
  • Assign tasks and follow up
  • Deal with customers when needed
chain of command
Chain of Command
  • Floor employee/associate
  • Department managers
  • Operations and Assistant Managers
  • Store Managers
  • District Manager
staying informed
Staying Informed
  • Manager holds “huddles” to keep employees informed and share sales data
culture
Culture
  • Corporate code of ethics
  • Manager as “role model”
  • Strict dress code
  • Teamwork, focus on the customer
  • Community contributions
technology
Technology
  • Improved communication with corporate and other stores
  • Faster, more organized systems
  • Conference calls
how is performance measured
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
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
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
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
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
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