Executive Summary of Kmart Australia Ltd. Business Report

This paper has provided a detailed business report for the various aspects of management in Kmart Australia Ltd.- a chain of retail stores, owned by Wesfarmers Limited, with outlets in Australia and New Zealand. Organic searches by an applicant to a managerial post in the company provided a way for delving deep into the topic, for which, the help of some websites, peer-reviewed journals, books and articles was taken. The discussion around the enterprise, industry and competitive analysis revealed important insights regarding the various aspects of management in Kmart. The PESTEL analysis also highlighted major facets of the company’s functioning. It was observed that Kmart had emerged from a joint venture between G. J. Coles & Coy Limited (Coles) and S. S. Kresge Company and the first store in Australia was opened in 1969 in Burwood East, Victoria. Using theoretical management concepts, this report has attempted to define and explain the influence of the general environment and specific environment on Kmart. The report has also attempted to throw light on Kmart’s Social Responsibility (SR) and its Sustainable Development Goals (SDGs). Towards the end of the report, Mintzberg’s managerial roles have been highlighted and finally, an explanation on the completion of two Deakin experiences as an evidence that the applicant has some experience relevant to the roles is also shared.

Table of Contents

Introduction.

Body.

The Influence of General Environment on Kmart

1.1.1.1. Political factors:

1.1.1.2. Economic factors:

1.1.1.3. Socio-cultural factors:

1.1.1.4. Technological factors:

1.1.1.5. Environmental factors:

1.1.1.6. Legal factors:

The Influence of Specific Environment on Kmart

Social Responsibility and Sustainable Development Goals of Kmart

Mintzberg’s Managerial Roles and Deakin Experiences.

Conclusion.

References.

Introduction to Kmart Australia Ltd. Business Report

Like Walmart of the US, Schwarz Group of Germany and Carrefour of France, Kmart Australia Limited is a chain of retail stores in Australia (Russel, 2020). It falls within the industry of discount chains of retails stores. It is owned by Wesfarmers Limited, a company which earlier had a licensing agreement with the Sears Holdings Corporation to allow it to use the name “Kmart” for running its stores in Australia and New Zealand. However, in 2017, Wesfarmers acquired this brand name in the region from Sears for an enormous amount of $100mn (English, 2019). According to Wesfarmers (n.d.), Kmart has about two hundred and four stores in Australia and also about twenty-five outlets in New Zealand. The purpose of this report is to understand how the theories and concepts related to management are used to both guide and evaluate management decisions in Kmart. An additional purpose of this report is to provide oneself with an opportunity to develop important skills required in the study and practice of management and organisations.

Body of Kmart Australia Ltd. Business Report

The Influence of General Environment on Kmart

Gonzalez-Benito and Gonzalez-Benito (2006) have remarked that an organisation’s environmental dynamism can be exhibited through its various practices and strategies. There are multifold variables which influence decisions to implement these strategies within an organisation. Some of these variables portray the internal features of the company while others detail the general environment within which the company functions. Vu (2020) explains that the PESTEL analysis of any organisation probes the six central or key factors of external environment, namely, political (P), economic (E), socio-cultural (S), technological (T), environmental (E) and legal (L). These aspects play a huge role in furnishing a synopsis of the environment operating outside the organisation and also of the potential ladders the company can climb and the dangers it is exposed to or might be exposed to in the future to come. It is an important management tool for analyzing the market and the environment operating outside the organization to support strategic decision-making. Following is a PESTEL analysis of Kmart.

  • Political factors: Australia is a politically stable country with a strong rule of law (Wangmo, 2018). The country is an ally of the US, especially with regards to maintaining the economy and in defense (Chen, 2013). According to Lieto (2018), Australia is suffering to a great extent because of the tensions in trade between the US and China. However, Australia’s government is one of the cleanest and corruption-free governments in the world, according to Transparency International Organisation.
  • Economic factors: The World Bank (2019) has notified global economic growth to be at 2.6 per cent in 2019 and expected to reach only 2.8 per cent by 2021. Nonetheless, a consistent inrement in global retails sales has been witnessed (Statista, 2019). Australian economy is affected by economic developments in oher nations. An example of this could be Chinese investors invensting immensely in infrastructure making Australian Consumer Price Index rise and later, as China’s economy fell badly, so did the value of the Australian dollar, lowering tremendously the purchasing power of the Australian consumer (Wu and Yu, 2017). The rate of unemployment in Australia had decreased from 5.4% to 5.1% in 2019, giving a positive outlook towards the job market economy (KPMG, 2019). Also, in 2019, household expenses of the ordinary Australian citizen grew moderately, although some sectors had experienced a slowdown, like utilities, tobacco products and alcohol. The food, clothing and entertainment sectors showed considerable growth.
  • Socio-cultural factors: Mainly, the Millenial and Generation X part of the population of Australia, that is, people who are techologically savvier than the earlier Baby Boomers, are the people who are more spendthrift and have become the customer base for organisations like Kmart. According to Havas PR (2014), consumers in Australia are also even willing to pay extra to a certain degree for brands which have an ethically upright reputation. Buying olnine is also in trend in Australia. Higher and higher expectations of the people for product deliveries to be on time and uncomplicated and free return policies are in demand. According to Australia Post (2019), a lot of companies are also trying to attract more and more customers by offering online discount sales events regularly.
  • Technological factors: The adoption of smart technology in the retail sector has profound effects on sales and customer loyalty (Adapa et al., 2020). With state-of-the-art retail technology, the consumer gets fascinated and used to it in no time, thereby increasing the customer’s dependence on it. The consumers’ perception of value or shopping value are also shaped by deploying modern technology, specifically in the retail sector.

KPMG International had conducted a global survey in 2019 and the report which came out as a result of it was named Global Retail Trends 2019. The report showed that extraordinarily personalised services are being accorded to customers or consumers by retailers. The latest technologies, namely, voice recognition, image recognition and chat bots are all being used in mobile shopping applications to the comfort and benefit of the customers. Such automations have become standard and people are accepting them widely (KPMG, 2019).

Furthermore, technology has advanced so much that e-commerce has found its way to almost every remote village, gully or street in the world and Australia is no exception to the electronic commerce revolution. Digital marketing, social media marketing, adverts and e-magazine reviews among a host of other media provide additional information to users and consumers about new companies, brands, products, novelties and innovations, services, offers, sales and discounts. Retailers are heavily into using social media to promote their products. They do advertising for their brands, engage with their customers and eventually convince their prospective customers to visit their stores and shopping sites (Liu and Ying, 2012).

Last but not the least, most of the big retail companies in Australia have designed their shopping websites so perfectly and outstandingly creatively that customers are drawn towards visiting them like bees go after nectar. The user interface with its interactive features is so attractive for the customers that they enjoy surfing these websites, buying products or simply reading about them, comparing their price and quality with similar products on other websites and adding them to their online shopping carts to purchase them later. Moreover, at the bricks and mortar retail stores, many organisations had installed self checkout machines and point-of-sales machines to make the shopping experience of the customers comfortable. All these best practices and innovations in the retail sector have also been deployed by Kmart in 2020. An Australian technology firm which goes by the name ‘Cohesio’ is up to fitting robotic voice solutions in Kmart stores and fulfilment centres throughout the country in 2020 (Palmer-Derrien, 2020). This technology facilitates employees in Kmart distribution centres in listening to the order details rather than reading them from slips. This technology is being hoped to improve productivity between 30% to 50%. According to Duran (2019), Kmart has started an augmented reality (AR) advertisement engagement in 2019 to facilitate its customers to view its furniture and home décor commodities in a real-life frame of reference. Also, in 2020, Kmart is adopting more state-of-the-art retail technology like their apps and websites having image recognition, voice recognition and chatbots, expanding their digital outreach through social media and digital marketing, making their shopping websites more creative in design and deploying the latest electronic self checkout machines and point-of-sales machines at their stores.

  • Environmental factors: Consumers are putting in efforts to reduce their carbon footprint, thereby promoting green consumerism. They want the environmental impacts of their choices to be as minimal as possible. Retailers, on the other hand, are under pressure to cut down on plastic packaging and transportation. They have therefore started making use of environment-friendly materials likes cotton, jute and paper (Foley Retail Consulting, 2017).
  • Legal factors: Australia is proceeding towards strengthening its environmental laws and conventions. Also, Australia’s cyber-security laws in 2019 became more stringent as concerns over cyber-atatcks became commonplace. Consumers are also worried about the privacy of their data. The labour laws of Australia are very strict too. The Fair Work Act 2009 is an example of a legislation detailing the minimum salary and leaves and other working conditions for employees in Australia (Goodwin and Maconachie, 2011). If Kmart tries to cut down on its operational costs to make the prices of its product more reasonable, these laws might pose a challenge to the company.

The Influence of Specific Environment on Kmart

According to Alcaide (2013), the specific environment of a business is that portion of the environment which is straight fitting to the attainment of the business’ goals. It is also called the task environment of the business and it includes the business’ competitiors, customers, suppliers, strategic partners and regulators.

Kmart’s products’ prices (uniform as well as differentiated schemes), products (main, seasonal and location-specific), promotion and place are used to understand the offerings of Kmart and its customers and is known as the 4P classification model (Singh, 2012). All these four elements are intertwined and require perpetual changes to match up to the ever-evolving external environment to give the company an edge over its competitors.

Roy Morgan (2019) has pointed out that discount stores like Kmart are being chosen by more and more number of Australians for buying products like homeware, baby products, garden accessories and clothing among others. Kmart’s rebranding in 2008 and its online appearnace and presence enhanced its user-friendliness as well as customer-friendliness, which is also reponsible for its edge over its competitors like Target and Big W. Kmart’s customers run into millions and they are people from all genders, of all ages, from all geographical regions and all socio-economic states. The typical Kmart customers are females, millenials and Generation X individuals. Also, they are mostly young Australian parents with kids under the age of twelve years.

According to Wesfarmers Sustainability Report (2015), the key suppliers of Kmart are from China, India, Malaysia, Bangladesh, Pakistan, Indonesia and Cambodia. The common motive of Kmart and its suppliers is to build distributed understanding and dedication on issues which are crucial to both Kmart and its suppliers for their growth and success in the future. It is Kmart’s commitment to abide by international as well as Australian laws in the conduct of business. The business is conducted with sharp uprightness. According to Kmart (n.d.), it only works with suppliers who have a common understanding and an obligation towards following these national and international laws and regulations and also the policies of Kmart in accordance with these laws.

The biggest competitors of Kmart are BIG W, Harvey Norman, Target, Kogan, AppliancesOnline, Best Buy, Walmart, Costco, Kmart (USA), Amazon, Kroger, Sam’s Club and J. C. Penney. Sorini (2016) has highlighted six srategies of Kmart which it that give it a competitive edge over its competitors. These are, namely, marketing and advertising, social media outreach, in-store merchandising, pricing model, direct-sourcing model and supply chain logistics. Kmart repositioned its marketing and advertising campaign from the large “everyman” imploration to focus on women, especially, mothers. They played appealing pop songs in their TV commercials instead of corporate jingles which proved to be a successful advertising campaign strategy. Amidst the ongoing global economic slump in 2019/2020 and household budgets going down, Kmart evolved its brand positioning and communicated it in an entirely new way. It began the ‘Low Prices for Life’ campaign in 2019 to attract more and more customers (Mitchell, 2019). Kmart’s homewares and fashion clothing has received tremedous responses on social media.

On these websites, Instagram accounts and Facebook pages, people are posting about “Kmart hacks” and “shelfies” and many Australian women are showing off their home styling and Do-It-Yourself (DIY) makeovers by using products they purchased from Kmart. Thousands of ladies have been posting images of what they have purchased while also flaunting their wishlists and moodboards of the products they desire to purchase in the future. Nadira (2020) has pointed out that Kmart has 1.1 million subscribers each on Facebook and Instagram and it posts photos of its customers with their new buys from Kmart. Users generate a great amount of content on Kmart’s social media accounts and pages. Social media has lifted off the brand image of Kmart. Kmart’s own private brands were put on display, in-store merchandising, control of stocks, sourcing and logistics became simplified, the stores were renovated and made cleaner in 2008 so that traversing through them became easier and the doors to impulse purchasing by the customers could be opened.

Powell (2020) has described that Kmart has permanently adopted a low pricing model for its products, keeping in mind the customers’ shopping value or perception of value and therefore, attracts more and more customers as time goes by. Millenials and young Australian mothers make up for the largest portion of its customer base. Kmart cut ties with the middlemen in its supply chain and built direct relations with manufacturers. This has granted huge successes to Kmart. Kmart also completely overhauled its supply chain process. Processes like “pick and pack” were introduced which gave a chance for carton sizes to be reduced and shipping costs to be lessened. All of this was not as simple as it sounds to implement. Kmart had to deploy the CBX software platform to take care of the issues it was facing in the supply chain. It resulted in streamlining of operations, reduction in costs, tripling of volumes and did away with the need to hire additional staff. It can very well be imagined that through all these efforts, Kmart has been able to overtake its biggest competitor in Australia, that is, Target, which has decided to shut down 75 of its stores and convert 92 others to Kmart in 2020 (Apparel Resources News-Desk, 2020).

Social Responsibility and Sustainable Development Goals of Kmart

Akbar and Ahsan (2014) have proposed the most of the top retailers in Australia should ameliorate their commitment of sustainability. Fiadicha (2016) has proposed that the corporate social responsibility (CSR) of a company has an effect on firm value. Kmart extended its hand of help to Bangladesh when the Rana Plaza garment factory in the latter collapsed (Boersma, 2013). Dhaka, the capital of Bangladesh, is a major supplier of garments to Kmart. According to Gonzalez III (2005), CSR has a profound effect on social development. This is exactly how Kmart has uplifted the lives of thousands of garment factory workers in Dhaka. Tozer (n.d.) has highlighted that despite CSR being a relatively novel business concept, companies can gain from engaging in it. They may also come under the scanner for engaging in it, which means that CSR initiatives has two sides to it. One is positive and one is negative. Companies may be applauded for the good work they do for the society but they cannot please all the elements of the society. There will always be some groups and individuals who will criticize the company for their CSR activities. Kmart did come under such scrutiny after the Rana Plaza garment factory collapse in Dhaka. Kmart’s reputation and its prospective gains and sales underwent impairment, partially though, for trying to build an ethical working environment around a place which was once famous for mass exploitation of workers.

Griggs et al. (2013) have highlighted that sustainable development goals (SDGs) are those which aim towards the stability of our planet Earth and at the same time fight against poverty and try to secure the well-being of all humans. They have also argued that the two most important priorities of SDGs should be to maintain the life support system of our planet and to reduce poverty. According to Hak et al. (2016), SDGs lay an all-encompassing policy framework for dealing with the problems in economic upliftment, saving the nature and natural resources, eradication of poverty, promotion of education and improving the health sector. United Nations Development Program (UNDP) (2015) has enshrined these seventeen SDGs, namely, no poverty, zero hunger, good health and well-being, quality education, gender equality, clean water and sanitation, affordable and clean energy, decent work and economic growth, industry, innovation and infrastructure, reduced inequalities, sustainable cities and communities, responsible consumption and production, climate action, life below water, life on land, peace, justice and strong institutions and partnerships for the goals, for all United Nations (UN) member nations to achieve by the year 2030.

Wesfarmers (2019) have decided upon some sustainable goals for Kmart in a report named “Over the Long Term”. Their primary objective is to supply adequate returns to their shareholders. They think this could be done by foreseeing the requirements of their customers and committing to deliver cut-throat goods and services, by caring for their team members and giving them a suitable work environment, by having great, ethical and reliable relations with their suppliers, by lending support to the communities they operate in, by taking care of the environment and by putting integrity and honesty first in all of their dealings. Social responsibility to Kmart is its priority. From taking care of the customers’ needs and shopping value, to being cautious that it is able to return to its shareholders or engaging in any other social responsibility like that towards its overseas suppliers, Kmart has always stood by its people’s side and will continue to do so.

Mintzberg’s Managerial Roles and Deakin Experiences

In any organization, a manager plays different roles everyday, though his basic task is that of leading and managing all of the affairs of his team. According to Taskworld (2016), Henry Mintzberg- a PhD from Massachusetts Institute of Technology and a world famous academic and author- realized the importance of these management roles and got them published in 1990 in his book called ‘Mintzberg on Management: Inside Our Strange World of Organizations’. Mintzberg stresses on the significance of ten different management roles and here, I shall analyze how these fit into the picture with my job application as a Sales Manager at Kmart.

  1. Figurehead: I can take time out to take the business’ partners to luch or attend a colleague’s wedding.
  2. The Leader: I can keep my team motivated, exercise formal authority on them and take responsibility for their doings.
  3. The Liaison: I can maintain good relations with equals in other companies and departments as also with government functionaries and trade organization delegates.
  4. The Monitor: I can gauge the trends in the external environment so that the sales of my organization can be streamlined.
  5. The Disseminator: Whatever information I get from anywhere regarding how to manage the sales, if they are not confidential, I can pass it on to my subordinates.
  6. The Spokesperson: As a spokesperson of the Sales department of Kmart, I can directly engage with the media, the consumer forums, government representatives and trade organization delegates, and let them know that honesty and integrity along with the customers’ interests are the things that really matter to us.
  7. The Entrepreneur: As a sales manager, I can, at given intervals of time, launch novel projects by training my team and my subordinates and giving them fresh ideas of how to conduct the sales.
  8. The Disturbance Handler: In this roles, I can unconditionally respond to stresses which must not be ignored. For example, if a big important customer goes bankrupt, I shall continue to supply him, though in a lesser amount.
  9. The Resource Allocator: I can allocate tasks according to my preference and according to the abilities of my juniors.
  10. The Negotiator: I can negotiate with my suppliers and customers for what I can pay and what I want to be paid respectively.

In the Deakin Talent ‘Build Your Experience’ website, when I selected ‘Attention to Detail’ and ‘Communication’ as my key strengths, I discovered that I have the potential to work in the fields of Arts & Education, Business & Law, Career Placement for Undergraduates, Deakin Sports, Deakin Talent, Global Citizenship Volunteering, Health, Library Sciences, Mathematics Mentorship, Pass Leadership, Science & Engineering, Success Coaching and Writing. The results are true because I have had a good education throughout schooling to graduation and post-graduation, I am good at Mathematics and playing the guitar, I have studied science throughout my academic life, I’m a good writer as well and have a strong inclination to be a part of a great business organization such as Kmart Australia Limited.

Conclusion on Kmart Australia Ltd. Business Report

Kmart, the biggest chain of discount retail stores in the Indo-Pacific region is an admirable organization and a fantastic one to work in. Their business practices take into account all three of the general, the specific as well as the internal environment to work in, and knit the three well enough into the organizational fabric of their enterprise. They have millions of customers worldwide who purchase from them both from their online stores as well as brick and mortar stores. Kmart takes its social responsibilities seriously and has well-defined sustainable development goals for the future. Any applicant, if industrious enough, would be fortunate to work in Kmart. They are supposed to have the knowledge and expertise in their field of choice. Kmart brings joy in the lives of its employees, its customers as well as its suppliers.

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