The Discount Retail Industry: vs

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The Discount Retail Industry:


MGMT 390-103

Prof. Jose Santos

Roger Coffman

Alberto Freire

Steven Heaver

Jolanta Soltis

Table of Contents
Introduction 3

Industry Outline 3

Kmart’s Capabilities 8

Wal-Mart’s Capabilities 19

Conclusion 26

Bibliography 29


The retail industry in the United States today can be very profitable to the market leader. But for the rest, competition is fierce, and as we have seen in the past, can lead to bankruptcy. One example of this is the battle between the two biggest players in the general merchandise retail chain industry: Wal-Mart and Kmart. Wal-Mart’s yearly revenues are $220 billion, while Kmart filed for bankruptcy on January 23, 2002 (

The big players in the discount retail market are Wal-Mart, Kmart, and Target. Customers of these stores are looking for convenient shopping, with a variety of merchandise under one roof, at low prices. These retailers must be able to differentiate themselves in order to become a consumer’s first choice. In order to do this, Wal-Mart offers huge stores with consistently low prices, Kmart has partnered with designers such as Kathy Ireland and Martha Stewart, and Target has become the place to find fashionable items and brand names, such as Mossimo, at low prices.

This report will detail the reasons for Wal-Mart’s success and Kmart’s failure in the retail industry. It will explore the overall characteristics of the discount retail industry and its numerous members, the capabilities of Kmart and of Wal-Mart, and an analysis of the two companies specifying why each company is at their respective ends of the business success spectrum for discount retailers.

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