Kmart

(a) that Kmart's purported revitalization was a complete failure as the Company was continuing to lose market share to competitors and the Company's purported efforts to reverse this trend were not meeting with success; (b) that the Company's supply chain management was extremely problematic as the Company's distribution centers were outdated and inefficient and the Company's supply chain software was plagued by bugs and glitches, which were causing the Company to experience inventory problems. As a result of these supply chain management issues, the Company was experiencing difficulties routing inventory to stores, thereby negatively impacting the Company's sales. But since competitors Wal-Mart and Target produce better in-stock and inventory turnover numbers thanks in part to their more finely tuned IT systems, Kmart is now under intense pressure to show far greater improvement. Other more obvious contributing factors to Kmart's financial woes include its lack of differentiation and inability to figure out a unique selling proposition to make it stand out from its chief competitors, its aging and underperforming stores, its poor store execution and its store locations. But these are culture changes more than technology changes and can be more easily fixed for far less money than the supply chain issues.

(b) Kmart Past Struggles Management is a key to success, and Kmart needs proper management to help create a positive image that attracts more customers. Kmart's disorderly management and bankruptcy caused many customers to shop with other retailers. According to Carr, Wal-Mart and Kmart were the same size in 1990. Since then, Kmart has grown far slower than its rival or the industry. Once one of the largest discount retailers, Kmart filed for the biggest Chapter 11 bankruptcy for discount retailing in the United States (2002). Struggling to find the right type of management has been one of Kmart's problems that ultimately helped lead the company to its downfall.