In this assignment help you will get company failure analysis of
Enron
United Airlines
Kmart
Three companies that declared bankruptcy during the last ten years are listed above. Choose one of these and find information about the company on the Internet. Clearly identify the main failures of planning and/or environmental scanning, and analysis that gave rise to the situation,
which caused the company to declare bankruptcy. In hindsight what might they have done differently?
Failure of Kmart
Kmart Corporation was the third largest discount retailer in US market. Due to huge debts and erosion of consumers’ confidence, Kmart filed for bankruptcy in 2002 (Probst & Raisch, 2005). According to the assignment help experts followings are the main factors that were responsible for failure of Kmart planning’s.
Less efficiency of Supply chain management: Behind the bankruptcy of Kmart, the main contributor was an inadequate management of its supply chain that unable the firm to manage the demands of customers and supply of required products effectively. Its competitor Wal-Mart focused on customers’ requirement and better supply channels, which enabled Wal-Mart to provide its products to customers timely. On the other hand, Kmart followed traditional approaches in its supply chain that reduced its ability to manage ups and downs in demands of its products (Konicki, 2002). Therefore, the shelves of Kmart’s stores’ were empty, but the stockrooms were piled up by products that grew the inventory cost and declined profits of Kmart.
Lack of IT systems: Behind the failure of Kmart’s planning, lack of IT systems were much responsible. Wal-Mart and other retail players were investing huge money for adapting advanced technology to predict the potentiality of retail markets and for sending important information regarding to customers and markets within organization. But, Kmart failed to adopt advanced technology due to the investment of huge money that also reduced the competency level of Kmart (Hays, 2002). With the help of advanced technology and cooperative relationship with suppliers, Wal-Mart was saving huge amount on the delivery of products at its retail stores, whereas, Kmart was expending more money to manage its supply-chain systems that was major cause in the lack of its profitability (CNN Money, 2002). Please check our assignment help sample for more detail.
Greater Competition: Due to use of advanced technology, Wal-Mart provides low-cost products to its customers that increased the level of competition in retail market. Due to its effective supply chain structure, Wal-Mart was able to make attractive demands for its products that also helped to deduct the cost of transportation along with inventory (Lehavy & Udpa, 2011). But, Kmart failed to predict importance of technology aspects, which caused failure of its discount business planning and raised bankruptcy factors.
Less effective marketing approach: Due to lack of information regarding to the prediction of customers’ needs and wants according to market competitiveness, Kmart and its retail store’s employees was also unable to create positive environment for its products as like Wal-Mart and other competitors (CNN Money, 2002). Kmart’s stores were not make an effective communication with its customers related to products and its timely availability at the place of stores that effectively reduced the impact of its marketing planning and caused bankruptcy.
Volatility of capital market: Due to changing scenario of business environment and greater impact of economic recession, Kmart was not effectively managed its business operations that affected the flow of organizational liquidity and increased its debt also (Lehavy & Udpa, 2011). Therefore, most of Kmart stores were in loss that reduced its profit margin and increased its liabilities, which was also an impressive reason for its bankruptcy.
Price leadership strategy: Kmart was focusing on price leadership strategy and quality products that effectively reduced its competitive capability along with the image of its products. Therefore, Kmart was not able to provide low-cost and high quality products to customers as like Wal-Mart, which dramatically created grounds for the elimination of Kmart form retail markets (Probst & Raisch, 2005). It was also responsible for the bankruptcy of Kmart.
Recommendations for Kmart’s leaders
assignmenthelpexperts.com provide the following recommendations for Kmart’s leaders should use restructuring process in its business operations. The first stapes of this process would include redefining strategies related to information technology systems. Through which, it will reconstitute its supply chain that can help to reduce overall labor cost. After that, leaders must evaluate the productivity, profitability and lease periods of its stores by which they can save extra expenses and can invest in other operations (Sears Holding Corporation, 2008). In the next steps, leaders should focus on the reduction of its annual expenses and they can reduce these expenses by reduction in staff, offices and closings of some Kmart retail centers, which will improve its marketing efficiency and reduce debts significantly.
After this, it should change price leadership strategy that will help to earn extra profits (Gartner, Inc., 2004). The last step would consider the modification of its merchandising and marketing strategy, which helps to offer exclusive brands of products in discount market to create differentiation from competitors. So, this process can help in getting significant position in retail discount market and to make huge profits for Kmart organization.
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Get best help from the team of assignment help, mathematics assignment help, mathematics homework help and online assignment help tutors. Please e-mail us if you have any query. We would be very happy to help you with any subject assignment help online and online assignment help.
Enron
United Airlines
Kmart
Three companies that declared bankruptcy during the last ten years are listed above. Choose one of these and find information about the company on the Internet. Clearly identify the main failures of planning and/or environmental scanning, and analysis that gave rise to the situation,
which caused the company to declare bankruptcy. In hindsight what might they have done differently?
Kmart Corporation was the third largest discount retailer in US market. Due to huge debts and erosion of consumers’ confidence, Kmart filed for bankruptcy in 2002 (Probst & Raisch, 2005). According to the assignment help experts followings are the main factors that were responsible for failure of Kmart planning’s.
Less efficiency of Supply chain management: Behind the bankruptcy of Kmart, the main contributor was an inadequate management of its supply chain that unable the firm to manage the demands of customers and supply of required products effectively. Its competitor Wal-Mart focused on customers’ requirement and better supply channels, which enabled Wal-Mart to provide its products to customers timely. On the other hand, Kmart followed traditional approaches in its supply chain that reduced its ability to manage ups and downs in demands of its products (Konicki, 2002). Therefore, the shelves of Kmart’s stores’ were empty, but the stockrooms were piled up by products that grew the inventory cost and declined profits of Kmart.
Lack of IT systems: Behind the failure of Kmart’s planning, lack of IT systems were much responsible. Wal-Mart and other retail players were investing huge money for adapting advanced technology to predict the potentiality of retail markets and for sending important information regarding to customers and markets within organization. But, Kmart failed to adopt advanced technology due to the investment of huge money that also reduced the competency level of Kmart (Hays, 2002). With the help of advanced technology and cooperative relationship with suppliers, Wal-Mart was saving huge amount on the delivery of products at its retail stores, whereas, Kmart was expending more money to manage its supply-chain systems that was major cause in the lack of its profitability (CNN Money, 2002). Please check our assignment help sample for more detail.
Greater Competition: Due to use of advanced technology, Wal-Mart provides low-cost products to its customers that increased the level of competition in retail market. Due to its effective supply chain structure, Wal-Mart was able to make attractive demands for its products that also helped to deduct the cost of transportation along with inventory (Lehavy & Udpa, 2011). But, Kmart failed to predict importance of technology aspects, which caused failure of its discount business planning and raised bankruptcy factors.
Less effective marketing approach: Due to lack of information regarding to the prediction of customers’ needs and wants according to market competitiveness, Kmart and its retail store’s employees was also unable to create positive environment for its products as like Wal-Mart and other competitors (CNN Money, 2002). Kmart’s stores were not make an effective communication with its customers related to products and its timely availability at the place of stores that effectively reduced the impact of its marketing planning and caused bankruptcy.
Volatility of capital market: Due to changing scenario of business environment and greater impact of economic recession, Kmart was not effectively managed its business operations that affected the flow of organizational liquidity and increased its debt also (Lehavy & Udpa, 2011). Therefore, most of Kmart stores were in loss that reduced its profit margin and increased its liabilities, which was also an impressive reason for its bankruptcy.
Price leadership strategy: Kmart was focusing on price leadership strategy and quality products that effectively reduced its competitive capability along with the image of its products. Therefore, Kmart was not able to provide low-cost and high quality products to customers as like Wal-Mart, which dramatically created grounds for the elimination of Kmart form retail markets (Probst & Raisch, 2005). It was also responsible for the bankruptcy of Kmart.
Recommendations for Kmart’s leaders
assignmenthelpexperts.com provide the following recommendations for Kmart’s leaders should use restructuring process in its business operations. The first stapes of this process would include redefining strategies related to information technology systems. Through which, it will reconstitute its supply chain that can help to reduce overall labor cost. After that, leaders must evaluate the productivity, profitability and lease periods of its stores by which they can save extra expenses and can invest in other operations (Sears Holding Corporation, 2008). In the next steps, leaders should focus on the reduction of its annual expenses and they can reduce these expenses by reduction in staff, offices and closings of some Kmart retail centers, which will improve its marketing efficiency and reduce debts significantly.
After this, it should change price leadership strategy that will help to earn extra profits (Gartner, Inc., 2004). The last step would consider the modification of its merchandising and marketing strategy, which helps to offer exclusive brands of products in discount market to create differentiation from competitors. So, this process can help in getting significant position in retail discount market and to make huge profits for Kmart organization.
References
CNN Money (2002).
Kmart files Chapter 11. Retrieved
April 24, 2012, from http://money.cnn.com/2002/01/22/companies/kmart/
Gartner, Inc.
(2004). Gartner Dataquest Alert.
Retrieved April 24, 2012, from http://www.mphasis.com/pdfs/searskmart_merg.pdf
Hays, C.L.
(2002). Kmart Reports $2.42 Billion
Annual Loss. Retrieved April 24, 2012, from http://www.nytimes.com/2002/05/16/business/kmart-reports-2.42-billion-annual-loss.html
Konicki, S.
(2002). Now In Bankruptcy, Kmart
Struggled With Supply Chain. Retrieved April 24, 2012, from http://www.informationweek.com/story/IWK20020125S0020
Lehavy, R. &
Udpa, S. (2011). Kmart: Predicting Bankruptcy, Fresh Start Reporting, and
Valuation of Distressed Securities. Issues
in Accounting Education, 26(2), 391–419.
Probst, G. &
Raisch, S. (2005). Organizational crisis: The logic of failure. Academy of Management Executive, 19(1),
90-130.
Sears Holding
Corporation (2008). Investor Information.
Retrieved April 24, 2012, from http://www.searsholdings.com/invest/archives/feb08.htm
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