According to the article, Warmart and Target clearly understand what role they should play in the market, enhance advantage and avoid shortcoming, focus on specific and targeted customers; indeed they understand how to reach the market properly. However, although Kmart defined itself as “mass merchandising company that offers customers quality products through a portfolio of exclusive brands and labels,” customers has their own feeling, their own way to identify the company, and their own needs. If the company can not play an reasonable role in the market and meet the needs of its targeted customers, they will fail to stay competitive.
Undoubtedly, clear concept about how to position itself is significant for the company; however, low-cost structure is also a factor contributes to Wal-Mart’s success. In fact many company (such as Yasiya which is Chinese company) would like to spend lots of their capital on decorations and fancy advertisement in order to capture mass customers’ interest. Nevertheless, they will experience high-cost structure, which means customer and company will share the burden. If other better-control-its-cost companies emerge and the price of same products will present lower in the market, customers are keen of judgments and tend to choose the low-price products or service. As a result, those companies which fail to minimize their cost will lose their cost advantage and likely to be replaced other competitive companies.
link:
http://blogs.hbr.org/2010/12/why-cant-kmart-be-successful-w/
photo via:
http://www.therundown.tv/wp-content/photos/targetwalmartkmart3.jpg