Kmart
Why Can 't Kmart Be Successful While Target and Walmart Thrive?
What drives some companies to succeed while others languish? Successful companies develop a system of a few truly unique capabilities that help them create differentiated value for their chosen customers.
Retailers provide many case studies in capabilities-driven success, one of the most compelling of which is the big discounter triad of Walmart, Target and Kmart. And in this fourth-quarter retail season, we thought it would be helpful to take a closer look at what really distinguishes these competitors because they provide valuable insight into the key components of a winning corporate strategy.
We believe that all successful companies — Walmart and Target included — know precisely how they provide value for customers. They make a deliberate choice about their "way to play" in the market, guided primarily by what those companies do uniquely well: their distinctive capabilities. We define capabilities not as "people capabilities," but as the interconnected people, knowledge, systems, tools and processes that create differentiated value.
They then select a set of products and services that best leverage those unique capabilities and optimally suit their chosen way to play. Most important, they avoid markets, products or services that require new or disparate capabilities, and thus threaten the company 's focus.
Focus for us, therefore, is not about picking just one market, but rather about choosing one coherent way of competing. The true story about Walmart 's and Target 's success is that they have gone to great lengths to focus internally on building capabilities and product offerings that suit their way to play. Kmart, by contrast, has failed to develop a unique or differentiated way to play, and all that goes with it.
Let 's take a closer look.
Walmart 's success doesn 't just stem from impressive logistics, aggressive vendor management and its position as a low-cost retailer. What
What drives some companies to succeed while others languish? Successful companies develop a system of a few truly unique capabilities that help them create differentiated value for their chosen customers.
Retailers provide many case studies in capabilities-driven success, one of the most compelling of which is the big discounter triad of Walmart, Target and Kmart. And in this fourth-quarter retail season, we thought it would be helpful to take a closer look at what really distinguishes these competitors because they provide valuable insight into the key components of a winning corporate strategy.
We believe that all successful companies — Walmart and Target included — know precisely how they provide value for customers. They make a deliberate choice about their "way to play" in the market, guided primarily by what those companies do uniquely well: their distinctive capabilities. We define capabilities not as "people capabilities," but as the interconnected people, knowledge, systems, tools and processes that create differentiated value.
They then select a set of products and services that best leverage those unique capabilities and optimally suit their chosen way to play. Most important, they avoid markets, products or services that require new or disparate capabilities, and thus threaten the company 's focus.
Focus for us, therefore, is not about picking just one market, but rather about choosing one coherent way of competing. The true story about Walmart 's and Target 's success is that they have gone to great lengths to focus internally on building capabilities and product offerings that suit their way to play. Kmart, by contrast, has failed to develop a unique or differentiated way to play, and all that goes with it.
Let 's take a closer look.
Walmart 's success doesn 't just stem from impressive logistics, aggressive vendor management and its position as a low-cost retailer. What