Kmart has five competitors which are Wal-Mart, Sears, Target, Kohl’s, and JC Penny. Each of Kmart’s competitors has different business competitive strategies, mainly focus on low-cost strategy and differentiation strategy.
Firstly, Wal-Mart which applied the lowest costs (low prices) used the cost leader ships strategy which is a every-day-low-pricing (EDLP) strategy that aims at the board mass market and requires ‘aggressive construction of efficient-scale facilities, vigorous pursuit of cost reductions from experience, tight cost and overhead control, avoidance of marginal customer account, and cost minimization in areas like R&D, service, sale force, advertising...By this way, Wal-Mart can cut out that enormous expense and keep prices on both private-label and national brands as low as possible. Because of its lower costs, the cost leader is able to charge a lower price for its products than its competitors and still make a satisfactory profit. Although it may not necessarily have the lowest cost in the industry, it has lower costs than its competitors. Having lower-cost position also gives a company or business unit a defense against rivals. Wal-Mart's strategy is to reinforce their price leadership. Wal-Mart rarely holds up these brands as a selling point to investors. Lower-cost allow companies to continue to earn profit during times of heavy competition. It is the reason why the slogan of Wal-Mart is ‘Always low prices’.
Target had distinguished itself as a merchandiser of stylish upscale products. It means that Target used differentiation focus strategy which concentrates on a particular buyer group (stylish upscale products). Target continues to focus on more expensive, more stylish, and higher quality merchandise than other discount chains. From its ...