Assignment 2: Market Model Patterns of Change
| Assignment 2: Market Model Patterns of Change | | | | | | |
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The industry I chose to research is the superstore industry. An industry, which at one time was dominated by KMart, has gone through enormous change over the past five to ten years. KMart had very little competition when superstores were not really in existence. WalMart became their biggest competitor. New technology along with multiple competitors, have changed the way consumers make purchase. Once considered a monopoly by many, KMart fought the many pressures affecting stand-alone stores today. The company had few stores, which resulted in high costs. Once the industry started evolving with new technologies, these stores became sunk costs for the retailer. Online-only retailers who enjoyed much lower costs than the stand-alone stores were able to profitably charge customers a lower rate; however, at the same time, KMart was saddled with the high costs of labor as well as the physical stores. It was not long before KMart’s costs became too much for the retailer causing them to close many stores (Kmart, n.d.). Today’s market landscape looks much differently than it did when KMart was at its peak. Many more competitors fight for the consumer’s dollar; however, there are still a few dominant companies that stand out among them. These include WalMart, and Target. KMart became an almost instant hit with its stand-alone stores back in the days. Customers could, for the first time, go to one store and get almost everything they needed without having to go from one store to the other. KMart was able to be a “one-stop shop” for shoppers especially during the Christmas holiday with its lay-away plan. KMart enjoyed a monopoly position in the market; however, a newcomer called WalMart started to change the landscape of the market. In the long run, KMart did not have a sustainable model due to the fact that WalMart was able to drive down the costs
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The industry I chose to research is the superstore industry. An industry, which at one time was dominated by KMart, has gone through enormous change over the past five to ten years. KMart had very little competition when superstores were not really in existence. WalMart became their biggest competitor. New technology along with multiple competitors, have changed the way consumers make purchase. Once considered a monopoly by many, KMart fought the many pressures affecting stand-alone stores today. The company had few stores, which resulted in high costs. Once the industry started evolving with new technologies, these stores became sunk costs for the retailer. Online-only retailers who enjoyed much lower costs than the stand-alone stores were able to profitably charge customers a lower rate; however, at the same time, KMart was saddled with the high costs of labor as well as the physical stores. It was not long before KMart’s costs became too much for the retailer causing them to close many stores (Kmart, n.d.). Today’s market landscape looks much differently than it did when KMart was at its peak. Many more competitors fight for the consumer’s dollar; however, there are still a few dominant companies that stand out among them. These include WalMart, and Target. KMart became an almost instant hit with its stand-alone stores back in the days. Customers could, for the first time, go to one store and get almost everything they needed without having to go from one store to the other. KMart was able to be a “one-stop shop” for shoppers especially during the Christmas holiday with its lay-away plan. KMart enjoyed a monopoly position in the market; however, a newcomer called WalMart started to change the landscape of the market. In the long run, KMart did not have a sustainable model due to the fact that WalMart was able to drive down the costs