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DESCRIPTION EXECUTIVE SUMMARY. INTRODUCTION. MICRO ENVIRONMENT... MACRO ENVIRONMENT.. COST ADVANTAGE.... DIFFERENTIATION ADVANTAGE:. K-Mart STORE VALUE CHAIN:. SWOT ANALYSIS: STRATEGIC RESOURCES:... RECOMMENDATIONS. CONCLUSION... REFERENCES .

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EXECUTIVE SUMMARY
the report is based on K-Mart store which managed to cut its costs down and create a competitive advantage in the minds of customers. The report discusses about SWOT as well as the strategies that should be incorporated inorder to keep the customers attracted.the first part of the report talks about the general information about K-Mart store, followed by importance of building strategies to retail firms. Further a general comparison is done between K-Mart and its customers. in the end recommendations are given for developing strategic resources, which will help K-Mart to further enhance its image.

INTRODUCTION
Hakim Khan Abbasi, in 1960s opened a retail store at Dubai after his sons name K-Mart. K-Mart Hussains vision was to turn the store in a store that would be able to make the lives better and at the same time easier. He had the vision to provide people with services that could help them saving money through by the same products of same brands but at lesser price. Since then, it has always tried to keep its focus on creating as well as maintaining strong customer relationships. Thus from the very begining it has been performing very well in the retail industry through devising certain strategies, as well as being able to implement those strategies. TODAY K-Mart has four outlets operating thoughout the city and is recently planning to come up with another outlet at Clifton. K-Mart also has a number of competitors like naheed, chase-up, and hyperstar to name just a few. However, none of the stores has the potential to beat the prices being set by the store (K-Mart). Thus, sound strategy and its implementation are very important for any business. In order to come up with creative ideas and to make strategies for its customers, a company has to be vigilant about the opportunities and threats that a company may face in the near future. Thus, an analysis of the micro and macro factors impacting an organization may help in clear identification.

MICRO ENVIRONMENT
Micro environment factors are the ones which impact directly on the business and failure or sucess f business operations depend on them. So they are well thought into before designing orporate strategies for the company. Below are some micro factors.

CUSTOMERS
All the businesses are designed or customers to offer then the solution for there need hence they should be certred on customers.the firms marketing should be able to capture the attention of customer and retaing it. In other wrds business man should be well aware of "needs and deands" of its customers. K-Mart store highly emphasis the importance of its customers by giving pririoty to there choices. moreover, all the personnel are well trained. They know how to deal with the customers and how to guide them according to there queries. Trained staff definitely effect the sales of the company.

SUPPLIERS
Suppliers are the key factor here. They either can become the reason for increase in cost or they could cut the costs into half. So finding and contacting the suitable suppilers is critical. K-Mart has done backward collaboration with its suppliers so as to be time and cost effecient. And this staretegy pays the company very well.

SHAREHOLDERS
As organisations require investment to grow, they may decide to raise money by floating on the stock market i.e. move from private to public ownership. Shareholder pressure to increase profits will affect organisational strategy. Relationships with shareholders need to be managed

carefully as rapid short term increases in profit could detrimentally affect the long term success of the business. Management of K-Mart super market knows and acknowledges the importance of stake holders and treat them well.

MEDIA
Media holds a very strong position n making or breaking the brands. Positive media attention can make an organisation (or its products) and negative media attention can break an organisation. Thats why companies need to be aware of the media and should give it incentive to potray the actual n real picture of its products and services rather than negative picture. Some organisations will even employ public relations (PR) consultants to help them manage a particular event or incident. K-Mart realizes that a positive image could increase sales greatly so it maintains good relations with them.

COMPETITORS
The competition though normaly is a rival but literaly without it the company's sales will be stagnant. It creates a certain sense of urgecy in customers so that they choose. In order to make customers choose our store and brads K-Mart works very hard, said its owner. He said that we keep tabs on the unique offerings of the competition and constantly visit its stores so as to see what we could improve at our store.The name of the game in marketing is differentiation. When the company knows what others are doing, now it plans unique offers and rates. In this way customers are attracted more towards one store rather than switching. These all above factors are very important but they must not be considered in isolation.

MACRO FACTORS
Most important macro environmental factors effecting bussinesses in pakistan are discussed here. These factors also effect the business at K-Mart super stores.

ECONOMIC GROWTH:
This points towards the activities of selling and buying that take place in a country over a specific time period. With regard to its nature this is a very complex activity and keeping its acurate track is practicaly not possible so estimation is done. This is not a constant activity rather it changes very quickly so its effects are also ever changing the businesses.Pakistan has a increasing semi-industrialized economy that depends greatly on manufacturing, agriculture and remittances. since last decade the GDP has been on the rise an by average 5 percent per year, which is way below than needed in order to keep up with rapid population growth. As this activity is dependent on certain things like changes in income of people, future aspects of ones economic life etc. so these factors tend to change in population over the course of time yet sales at K-Mart super market also keeps changing.

INFLATION:
inflation in the economy leads to the increase in prices of products over a specific time period. Moreover it also cause the contraction in income of people in the terms of its value. Pakistan is a country with high inflation rate so all the business are effected by it. People start buying less when prices go high. Though this effects sales at K-Mart negatively , in shorter time periods, but on an average the sales keeps on increasing in the long run. Reason to this is that K-Mart is offering very cheap rates and good quality products.

Inflation also effects the manufacturing or acquisition of goods as its cost increases. So due to infaltion the companys cost of operations also goes high.

INTEREST RATES:
Interest rates are the additional amount charged by the banks on the money they lend to their customers. This increase the cost of money borrowed and therefore increase in intrest rate leads to higher expenses. As businesses very often borrow money from the banks so intrest rate has a significant effect on them. Interest rate changes also affect customers who in turn will affect the business. For example if intrest rates increase than the cost of loan for large items like electronics or cars also increases and therefore demand decreases, effectsing the businessmen. Vice verca if rate decreases then it will be cheaper to buy such items and demand will highly increase. So is the case with K-Mart super market.

UNEMPLYMENT:
This is a curse for a nation as it lowers the disposible income of most customers. Hence it decreases demand on average. This does not have as such effect on the business of K-Mart because most of the goods are comoodoties. So no matter how low income is people will havce to purchase in order to live.

COST ADVANTAGE:
The lower prices being set by K-Mart store are a result of lower costs being faced by the store itself. One of the sources for its cost advantage is its supply chain, where it has backward integration with the manufacturers. Rather than adding middlemen in between, they directly purchase the products from the manufacturer, thus substantially reducing the cost.

DIFFERENTIATION ADVANTAGE:

The differentiation that the K-Mart retail store has over its competitors is related to the fact that they manufacture some of the products them selvesthus caring for cost, quality, and availability of the products. Another differentiation adventage is that due to lower prices, K-Mart caters towards many sections of the society, whereas its competitors has a small market to attend usually upper middle, middle upper, and middle middle class.

K-Mart STORE VALUE CHAIN:

The value chain refers to the process by which the products or raw-matrial floats to turn it into an end product in order to reach to the market. The process consists of planning, sourcing, making, deilvering, and returning. K-Mart is continually expanding itself in the retail sector, operating a number of outlets throughout the city. Because of the nature of business, it was not possible to jot down every single supplier, as it has many, however, a simple model of the value chain is:

manufacturer (first tier supplier)

retailer (imtiaz store)

customer (first tier customer)

Many prior reports on K-Mart store have tried to establish or highlight the differetentiation being provided by the company that led to the success of the company. According to K-Mart abbasi, co,mpanies should lay importance over customers and try to create resonance in their minds. Thus being a part of the retail sector requires to have a grip over the needs and wants of the people. In order to meet the requirements of the customers and to not let their expectations down, K-Mart manages to have a responsive supply chain and has interrelations between all the parties involved, which ultimately provides them a basis for competitive advantage. K-Mart super

storehas direct links with different manufacturers as well as wholesalers, from whom they buy in bulk, ultimaetly reducing the cost of merchandise and hence the prices at which they will be selling products to the general market as a target of being no1 super market K-Mart makes sure that its supply activities are upto mark. following are the factors on which K-Mart management keeps on working.

ENSURING LOW PRICES:

with the passage of time number of customer is growing and the management is continually expanding the stores. with this expansion they felt the need of backward integration so that the prices can be controlled by management which according to them would be a strong competitive edge in terms of price and quality. Over the course of years, a rice mill and a flour mill have been added to the Company. Moreover, K-Mart Super Stores also operate its own grindstones for turmeric, spices, corn flour and other edibles. Other than this the imported products are also directly bought by the company hence, cutting the cost of purchase agents. With contentment abbasi said this not only cut them slack in terms of cost but delivery time as well.

HOME DELIVERY:
once a company knows that the customers have trust over it, it should keep trying new ideas. Hence K-Mart store came up with the idea of delivering the products to the customers door step. For this purpose a number of delivery vans are there for delivering the products at different location, bringing in convenience for grocery shopping.

RECOMMENDATIONS FOR ENHANCING COMPETITIVE ADVANTAGE:

Because the most important competitive advantage for K-Mart is its pricing, it is advisable that they give more focus on cutting their costs further, which is possible through an effective value chain. It should also be noted that there are many customers who are ready to pay a bit higher if they are being provided comfortable environment, therefore timings for movement should differ from prime time of sales. Pakistan being a country where shopping is taken as a recreational activity, the store layout should be better than the competitors, and offers be made that persuade a customer towards impulse buying.

SWOT ANALYSIS:
STRENGTHS:
K-Mart is able to sell its products at low prices. The built in trust in the minds of customers makes it possible for K-Mart to come up with a new line of offering. K-Mart is able to produce some of its own products which gives them an edge over their competitors. The infrastructure being used, like the ivend retail management suite makes it easier to calculate the inventory as well as in knowing the changing demands of customers.

WEAKNESSES:
Poor product handling or movement, makes it problematic for customers to freely look for different alternatives available.

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For certain type of products, the product assortment is not upto the mark, hence customers do not know about many brands that they are selling. K-Mart from the very beginning was involved into the retailing particularly for FMCG products. Cutomers thus associated K-Mart with FMCG and are hence reluctant to buy other products.

OPPORTUNITIES:
An opportunity for K-Mart is to open new outlets at different places, as it recently did at defence. It has the opportunity to boost its sales by providing the people awareness and information about the way they are dealing and the lower prices being affered by them.

THREATS:
Major competitors have always been a threat be it any industry. Most importantly, the apparel market is the major threat, as it doesnt have enough experience regarding this sector.

STRATEGIC RESOURCES:

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Strategic resources are the resources that enhance the competitive advantage or which may enhance the profile of company, helping it to boost up the sales. Some of the strategic resources to be named for K-Mart store include the corporate governance, financial resources, human resources, corporate social responsibility, and an effective supply chain.

CORPORATE GOVERNANCE:
proper guidelines must be given to different people working in an organization including mangers and assistant managers. They should be held responsible for the companys success, however, they should also be empowered for certain duties, communicated properly, and asked for their views. This strategy may help them being motivated towards their tasks as well as increase the overall sales of the company.

FINANCIAL RESOURCES:
K-Mart stores should try to increase the financial resources, so that it may also excel in the area where it lacks. According to K-Mart however, they are thinking of issuing shares to the general public in order to raise money.

HUMAN RESOURCES:
As discussed earlier, K-Mart should empower the employees and motivate them towards their tasks. It is also vary important to hire the right people as a salesperson, they should be properly trained, have ample knowledge about products, and should have approachable personality. If the salesperson doesnt have these qualities, people might switch to another store.

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CORPORATE SOCIAL RESPONSIBILITY:

K-Mart should also take certain steps towards social responsibility, so the people know it more than being a retail store. The customers might increase their visits to such stores as they may feel that somehow they will also be a part of this act.

EFFECTIVE SUPPLY CHAIN:

An effective supply chain is really important, as the transactions that take place between retailer and customer are not possible if it doesnt have one. Customer may switch to another store if it doesnt have the right product at the right time.

RECOMMENDATIONS:
K-Mart store has gained fame at a very short span of time, however, as the management gurus say; one should not accept victory too soon. No matter K-Mart is working really good as a retail store, it must keep improving itself. Because its private label products are very much demanded by the customers, they should extend the product line, and come up with products other than rice and flour. However the store is for the general public, K-Mart store can have a vertical integration with some firms who are willing to provide them the raw material services and the ones who are willing to buy their private label brands for further resale. The company should continue selling its products at lower prices and come up with special discount offers through which they would go for impulse purchases.

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CONCLUSION
In order to survive in the marketplace one must always give emphasis on its core competency, and should devise such strategies which makes use of it to the maximum. K-Mart stores competitive advantage has been its lower prices. It also provides customers with off prices and uses push strategy when they are not being sold. The usage of push strategy brings us to the fact that the company may not be able to correctly analize the demand of customers for certain products. Thus the store should also consider the environmental trends when devicing strategy for resale purpose.

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REFERENCES
http://www.scribd.com/doc/211834150/K-Mart-Store-Supply-Chain-Management http://www.wisegeek.com/what-are-the-different-types-of-strategic-resources.htm http://www.brecorder.com/market-data/rates-a-schedules/118/1172879/ http://www.citixsys.com/blog/K-Mart-supermarket-goes-live-on-ivend-retail/