Corrections on my part (Paragraphs) -- Marketing370-Consumer Behavior

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Date Posted: 12:40:00 04/11/02 Thu
Author: Starr
Subject: Corrections on my part (Paragraphs)
In reply to: Starr 's message, "My Part" on 12:33:21 04/11/02 Thu

>INTERNATIONAL EXPANSION
> Hey I made a mistake, where ever there is a star, that's where there is a new paragraph. *I tried to get information about Kmart�s cultural
>differences across the globe through the internet, but
>with Kmart going through changes with filing Chapter
>11 it was kind of difficult obtaining necessary
>information for that topic of Kmart. I touched mainly
>on the international aspect of K-mart historically.
> *Kmart first expanded internationally in Canada
>under the Kresge nameplate. The first Kmart store
>opened in Canada in the mid 1960�s. While this
>expansion was heading the company in the correct
>direction, Canadian Kmart stores did not keep up with
>Canadian discount retailers such as Zellers. When
>Wal-Mart started expansion into Canada, the Canadian
>Kmart division experienced similar problems as U. S.
>stores Kmart stores did against new and larger
>competition. Kmart also failed in an expansion program
>in Mexico in the early 1970s.
> *Kmart�s new international program under Tom
>Watkins started in Canada with a similar renewal
>program that was being launched in the United States.
>The program also considered ways to expand into Mexico
>with the new Super K store format. Other areas such as
>Asia, Europe and the Caribbean were researched.
> *The opportunities in Eastern Europe provided an
>entry into an underdeveloped retail market with poor
>competition in more advanced economies. Establishing
>central operations in the Czech Republic in 1992
>allowed for further growth into Poland, Hungary and
>eventually Russia. Again, government intervention was
>seen as a major obstacle in the development of this
>area. Kmart purchased the national retailer Majority.
>By 1993, more than 80% of the merchandise sold through
>these Kmart stores was supplied by local companies.
>The merchandise selection in the Prague stores was
>more extensive than that in domestic stores to reflect
>local preferences. Expansion into Prague proved better
>than expected and was profitable immediately.
> *A focus on Mexico serves as a launching pad to
>more southern countries such as Costa Rica, Chile and
>Argentina. Many believed Latin and South America to be
>a large opportunity for future expansion. Kmart
>operations in Mexico were started in 1993 through a
>joint project with Liverpool de Mexico, a large
>Mexican retailing corporation with 17 department
>stores and expertise in retail real estate
>development. Within 3 years, the joint project
>established 4 stores which generated sales of over
>$250 million. Several U. S. retailers had already
>begun operations in Mexico focusing on the most
>densely populated areas, primarily Mexico City. Since
>highly populated Mexican cities were more densely
>populated than U.S. cities, real estate was extremely
>expensive. The less developed transportation
>infrastructure allowed more retailers to successfully
>compete in a smaller geographic area.
> *Southeast Asia served as another region for
>international expansion. The expected growth in
>disposable income of this region led many members of
>management to believe that strong growth was
>well-known. Kmart had been sourcing products from
>suppliers in Southeast Asia for more than 20 years.
>This experience provided strong opportunities for
>partnerships with companies that could be trusted as
>reliable suppliers. Similar to the Eastern Europe
>strategy, Kmart developed central operations in
>Singapore in order to grow Southeast Asia sales. The
>first Kmart store in Southeast Asia was opened in
>Singapore in 1993. Again, this store was established
>with the intention of gaining merchandising experience
>in the region and then using this experience to branch
>into other Southeast Asian countries.
> *The international program allowed Kmart to begin
>international expansion without large capital
>expenditures. In 1994, the International Division
>generated over $3 billion in profitable sales with
>growth opportunities in the long run. Mexico and
>Singapore were not profitable at the time.
>As Kmart has cleaned up its balance sheet,
>strengthened its house brands and improved its
>operating efficiency, the global sweepstakes have
>heated up. Most significantly, of course, Wal-Mart has
>thrust itself onto the global retailing stage. And
>sooner or later the other big hitters on the
>international playing field will need to establish a
>competitive position in the United States.
> *Further initiatives in Kmart's overall
>multicultural aspects will include national
>sponsorships and grass-root efforts that directly
>reach regional markets or individual stores. These
>will complement Kmart's policies that empower store
>managers to build merchandise selections and facility
>operations around the varying multicultural
>communities they serve. Along with the advertising,
>these programs will clearly demonstrate the dedication
>Kmart has to its consumers and their communities.
> *Kmart Corporation is a $37 billion company that
>serves America with more than 2,100 Kmart and Kmart
>Super-Center retail outlets and through its e-commerce
>shopping site, www.bluelight.com .

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