Case Analysis: “Kmart and Sears: Stuck in the middle”

Case Analysis: “Kmart and Sears: Stuck in the middle”

Introduction

In January of 2002, Kmart Corporation went into bankruptcy protection. Although, it was the largest retailer in discounted price products in US, it was unable to keep up with the competition and retention of customers. Thus, Kmart filed for reorganization under the U.S Bankruptcy code and announced they will come up with a plan to deal with the financial needs of its various stakeholders. There plans were to reduce in size and restructure the business. However, even after a year, Kmart did not have a direction and business strategy to succeed in an extremely competitive marketplace.

Thesis statement

This paper talks about the strategies that were used by Kmart and Sears and the ways it helped them reach their goals.

Purpose of Paper

The paper discusses the strategies adopted by both the companies and the failure to reach their desired destinations, despite claims. The paper discusses the reasons why the once successful companies fell into bankruptcy and issues. The future determinants were not met timely and thus, the companies have to go through employee layoff, sell off of various stores in order to meet its debt.

Overview of the Paper

The paper starts by discussing the retrenchment strategies used by Kmart Corporation and how effective were they in contributing to stabilizing Kmart. Further, the paper talks about the strategy of Sears Holdings to acquire Restoration Hardware. The benefits and risks involved in this decision making. The paper deliberation whether it was the right moves of Kmart to acquire Sears. Finally, the paper encompasses the next strategic move that should be adopted by Sears.

Discussion

The retrenchment strategy is the reduction in expenses in order to become financially stable (mentor.com, 2013).Kmart Corporation cut in the overall expenses of the company by primarily ...