Strategic Planning Report for Kmart (Term Paper Sample)

Strategic Planning Report for Kmart Name Course title Professor Institution Date Table of Contents TOC \o "1-3" \h \z \u 1Introduction PAGEREF _Toc69339553 \h 4 2Seven Segments of the General Environment PAGEREF _Toc69339554 \h 4 2.1Political PAGEREF _Toc69339555 \h 4 2.2Sustainable Physical Environment PAGEREF _Toc69339556 \h 5 2.3Economic PAGEREF _Toc69339557 \h 5 2.4Technological PAGEREF _Toc69339558 \h 6 2.5Demographic PAGEREF _Toc69339559 \h 6 2.6Social-cultural PAGEREF _Toc69339560 \h 7 2.7Global Environment PAGEREF _Toc69339561 \h 7 3Porter’s Five Forces PAGEREF _Toc69339562 \h 7 3.1Threat of New Entrants PAGEREF _Toc69339563 \h 8 3.2Threat of Substitutes PAGEREF _Toc69339564 \h 8 3.3Rivalry among Competitors PAGEREF _Toc69339565 \h 8 3.4Supplier Power PAGEREF _Toc69339566 \h 9 3.5Buyer Power PAGEREF _Toc69339567 \h 9 4Value Chain Analysis PAGEREF _Toc69339568 \h 10 4.1Primary Activities PAGEREF _Toc69339569 \h 10 4.1.1Inbound Logistics PAGEREF _Toc69339570 \h 10 4.1.2Operations PAGEREF _Toc69339571 \h 11 4.1.3Outbound Logistics PAGEREF _Toc69339572 \h 11 4.1.4Marketing and Sales PAGEREF _Toc69339573 \h 11 4.1.5Services PAGEREF _Toc69339574 \h 12 4.2Secondary Activities PAGEREF _Toc69339575 \h 12 4.2.1Firm Infrastructure PAGEREF _Toc69339576 \h 12 4.2.2Human Resource Management PAGEREF _Toc69339577 \h 12 4.2.3Technology Development PAGEREF _Toc69339578 \h 13 4.2.4Procurement PAGEREF _Toc69339579 \h 13 5Organizational Structure Types PAGEREF _Toc69339580 \h 14 5.1Hierarchical Structure PAGEREF _Toc69339581 \h 14 5.2Horizontal Structure PAGEREF _Toc69339582 \h 14 5.3Matrix Structure PAGEREF _Toc69339583 \h 14 5.4Division Structure PAGEREF _Toc69339584 \h 15 5.5Functional Structure PAGEREF _Toc69339585 \h 15 6Conclusion and Recommendation PAGEREF _Toc69339586 \h 15 7References PAGEREF _Toc69339587 \h 17 Introduction Kmart is an American discount department chain store dealing with toys, electronics, apparel, health and beauty goods, beddings, sporting products, home décor, household hardware, jewelry, pet products, pharmaceuticals, DVDs, CDs, and a limited assortment of foodstuff. Kart is a transform SR Brands LLC subsidiary with its head offices based at Hoffman Estates, Illinois, United States (TransformCo, 2020). Besides the six states the organization serves in the United States, it also has an international presence in Australia, New Zealand, Canada, the Caribbean, Europe, Mexico, and Singapore. Kmart's diversification strategy has been a vital ingredient augmenting its profitability. Besides, the organization's successful administration strategies in the earlier years and the continuous reinvigoration of the strategies to match the changing customer preferences enable the organization to continue being competitive in the marketplace (Danziger, 2019). Seven Segments of the General Environment The general environment reflects the wider business environment encompassing elements and segments in the greater society that impact the firm's internal aspects. In this context, Kmart's general environment is subdivided into seven major segments; political, sustainable physical environment, economic, technological, demographic, socio-cultural, and global environment (Hitt, Ireland & Hoskisson 2016, p.45). Political The political aspect of the general environment focuses on the role played by the government in shaping organizations. The political factors affecting department stores like Kmart are government transition, government policies, government budget allocations to the specific industry, taxation imposed on the organization's products, and trade restrictions (Hunger, 2020, p.43). The political macroeconomic factors play a pivotal role in the organization's operations, performance, and profitability. Since these factors differ from one country to another, Kmart should endeavor to conduct a thorough analysis to establish the ease of doing business before venturing into the markets. Therefore, the organization should always keep abreast with the political environment's happenings to remain competitive in the marketplace. Sustainable Physical Environment The sustainable physical environment aspect of the general environment encompasses the trends towards ecofriendly goods and efforts to minimize or eliminate the effects the organization has the environment. A tactical review of its environmental regulations and bylaws governing the industry which it operates have a strategic implication on Kmart. For instance, the organization should adopt renewable energy sources to assist it comply with the existing environmental standards in the countries it has operations and also augment its long-term sustainability (Tur-Porcar et.al, 2018, p.5). This is due to the significant impact the measures have on the company’s performance and profit margins in the continuum. In addition, it should ensure that all locations for its premises do not upset the natural ecosystem. Therefore, Kmart should sustainably consider the various environmental concerns to assist the organization examine the criticality of these factors on its brand. Economic Kmart products' supply and demand play a pivotal role in the organization's profitability and growth. Economic aspects such as demand shifts, people's propensity to consume, unemployment rates, exchange rates, state of the economy, government spending, and potential customer's disposable income affect companies' strategic planning (Çitilci et al., 2020). For instance, the state of the economy affects clients' purchasing power in the company's stores. Exchange rates also have a strategic implication on Kmart's set up of departmental stores in new markets. Thus, economic aspects influence the decisions the company makes. Technological Technological aspects encompass all technical advancements aimed at improving Kmart's product and service delivery. However, technological factors cause disruptions and play vital roles in an organization's competitiveness (Schutte, 2020, p.2). Technological advancements leading to inventory optimization are crucial to Kmart's success since they improve operations and increase its profits. In addition, technological macroeconomic environment advances towards online shopping, website optimization, social media marketing, and mobile applications have strategic implications to the organization. Kmart should align its strategies accordingly to enhance its sustainability in the market. Demographic Demographic factors are incontrollable aspects of the organization's macro-economic environment. These factors entail people's aspects such as location, gender, ethnicity, age, and race. Demographics assist organizations in defining their employees' composition and size and determine their markets (Nawaz et al., 2020, p.4). They are central to many organizational decisions. Their strategic implication for businesses such as Kmart is to address the peculiar buying preferences of the divergent generations, necessitating different marketing techniques and products to cater to their unique needs. Consequently, Kmart should gather customers' demographic data and factor it in its strategic development processes to remain competitive in the marketplace. Social-cultural Social factors such as values, lifestyles, ethics, and attitudes affect the purchasing behavior of customers. These macroeconomic aspects play a pivotal role in determining the organization's future demand and sustainability (Martínez-Rodriguez et al., 2020). Kmart's target customers have a divergent array of interests that are increasingly defying the conventional consumer profiles. For instance, the rising demand for time-saving products, varying family buying patterns, and renewed attention on ethical behavior impact organizations' management. Thus, these changes imply that Kmart has to evolve and adapt to serve customers effectively and assure continued business success. Global Environment The global environment entails the exogenous aspects imposed on an organization's domestic environment by different nations' circumstances. They include globalization, the impact of the emerging economies, and political developments (Hitt et al., 2016, p.52). Since these factors influence the decision-making on utilization of resources and competencies, they have significant implications on Kmart's strategic planning. Therefore, the organization keeps abreast with the global markets' changes and traits to enable it to seize new market opportunities. Porter’s Five Forces The rivalry in the retail store industry has intensified in the past few years, adversely affecting organizations' performance in the sector. The application of Porter's five force model, which performs a specific industry external analysis, can be used to establish the attractiveness of an industry in which an organization operates and assist in determining its competitive positioning in the marketplace (Adelakun, 2020, p.2). The analysis of Kmart will assist the company in making tragically sound decisions and improving the performance, and ensuring its long-term sustainability in the retail store industry. Threat of New Entrants The new entrants' threat debunks new market players' impact on the present market players such as Kmart. The threat of new entrants to Kmart is low. Several existing barriers in the industry cause this. Entry into the retail store industry is capital intensive. It requires enormous amounts of resources and capital investment. Kmart owns an extensive infrastructure and highly competent human resources (Hirsch, 2019). As such, it limits the number of firms entering the industry. The existing regulatory framework encouraging smart growth also imposes barriers to new organizations keen on entering the market (Means, 2020, p. 263). The bureaucratic and strict regulatory requirements dissuade some players from entering the retail market. Threat of Substitutes K...