Kmart Australia is one of discount stores owned by Wesfarmers as a result of acquisition from Coles Group. The division itself was formed in November 2007 and is currently recognized as one of the most profitable discount department stores in Australia. Its head office is located in Mulgrave, Victoria. There are total of 192 stores throughout Australia and New Zealand with approximately 31,000 team members. The number includes outsourcing offices in Hong Kong, China, Bangladesh and India.
Kmart Australia offers general merchandise and extensive range of home brand products at lowest prices possible to cater the needs of everyone. General merchandise includes home entertainment goods, camping and fishing goods, kitchenware, stationery, furniture, garden supplies, lighting, footwear, etc.
As stated by Kmart Australia website, the objective of the business is committed to “improve the lives of our customers by providing quality services, products and solutions that earn their trust and build lifetime relationships."
Strategic location (located in urban areas with concentrated populations)
Excellent customer service
Focused market segmentation in the retail sector (urban market segment)
High brand loyalty and customer base
Closure of stores will affect home brands
Bankruptcy declaration filed by the store in 2002 will still bring a huge impact on the brand image of Kmart stores.
Marketing strategy is not effectively implemented and thus result in low profit margins and lack of competitive advantage against rival stores such as Target, Big W, etc.
Increasing market presence to rural or regional areas
Acquisition of new brands to improve sales
Increasing technology assistance can help improving the management of supply chain operation to become more efficient and effective.
Economic turmoil or slowdown may affect sales of the company. Customers will shift to lower prices products.
Increasing competition between firms selling similar products (eq. Target, Big W, Walmart) and thus price wars and competitive market share.
Government regulations imposed in retail industry to tighten expansion strategy. Other factors include political and tax imposed on the company.
Analysis of Kmart using PEST:
Political – reduce usage of plastic bags to improve environmental sustainability. Laws or regulations imposed on retail companies to ease competition and provide customers with goods at reasonable prices.
Economical – Economic slowdown is still evident from increasing unemployment rate and declining consumer purchasing power. This will greatly affect Kmart operations as consumers will seek for lower prices products