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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)


  • 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


  • Corporate code of ethics

  • Manager as “role model”

  • Strict dress code

  • Teamwork, focus on the customer

  • Community contributions


  • 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


  • 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