Kmart business model overhaul?

Kmart business model overhaul?

For those of us old enough to remember the 1970’s, we remember a world without Wal-Mart.  This was a world ruled by Kmart.  During this period, Kmart was the Wal-Mart.  What happened?  First and foremost, Wal-Mart created a superior business model for a discount retailer.  Like it or not, the superior business model almost always wins.

So what can Kmart do?  In my mind, Kmart has become irrelevant.  They could close all there stores tomorrow and the world would go on without a hiccup.  So how could Kmart make themselves meaningful in the marketplace once again?

My suggestion is that Kmart reinvent itself as a Hispanic department store.  They could refocus their items, pricing, and store design to cater to the fastest growing portion of the population, Hispanics.  Many of Kmart’s stores are already located in Hispanic areas.  The stores in rural areas could be closed or sold.

Kmart marketing to hispanics

This could capitalize on the first mover advantage and put Kmart in position as the defacto leader in Hispanic retail.  I have no idea whether this would work, but it certainly has more chance of working than Kmart’s current business model of “death by paper cuts.”  If Kmart does not radically change their business model, I don’t see a high likelihood of success.


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