What external areas and trends do you think strategic managers at Kohl’s have to

Question

What external areas and trends do you think strategic managers at Kohl’s have to deal with? If you were a strategic decision maker at the headquarters of Kohl’s, what types of external information would you want? What if you were a Kohl’s local store manager? What types of external information would you want? Go to Kohl’s web site [www.kohls.com] and find the latest Kohl’s Fact book. (Hint: Look at the Investor Relations section.) What strategic initiatives is the company pursuing? Take one of those strategic initiatives and discuss how it will help Kohl’s exploit external trends. What industry/competition opportunities and threats do you see in this case?

Explanation / Answer

Kohl's is a department store retail company. It operates a chain of stores. The products that it sells includes clothing, footwear, furniture, beauty products, etc.

The strategic managers at Kohl's have to deal with the following external areas - (i) needs and preference of the customers. The needs and preferences are dynamic and they keep on changing. The manager will have to keep a track of emerging global trends in the world of globa; fashion. (ii) identification of target demographics - the strategic manager will have to identify its target demographics and open new stores that are close to these people. This will ensure higher sales i.e dollar sales per square foot (a retail performance metric).

If I was a strategic decision maker, i would like information on the tastes and preferences of the target group on a macro level. By identifying the tastes, preferences, wants and desires of the target customers our organization can better understand and then cater to our customer's needs. This will help the organization in connecting with the customers, increasing customer loyalty and increase repeat purchases.

If i was a local store manager i would want the same information but at a micro level. I would want to understand what are the requirement's, tastes etc of the people living in the area near to the store and how the store can connect better with these people.

Kohl's is pursuing the following stratgeic initiatives - (i) provide amazing products and create a unique array of products. Local relevancy should be there. (ii) provide an easy experience to the buyers. Create seamless experience in-store by using digital technology. (iii) develop personalized connections with its customers (iv) develop great teams within the organization.

The initiative of providing amazing products and an unique array will help Kohl's exploit external trends. The trend is that each location has a different demography and thus different requirements as a buyer group. By having unique assortment of goods for each individual store, more buyers will be attracted.

In terms of opportunities, Kohl's can use the opportunity of expanding in emerging markets where competition is limited and market is underpenetrated. This provides a great potential for growth. In terms of threats, new competition can come into existence through mergers and acquisitions. Also, lower cost competitors can come in the market and can sustain on the back of cheap imports.

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