Innovation and New Technologies

1INNOVATION AND NEW TECHNOLOGIES
Innovation and New Technologies
Name of the Student
Name of the University
Author Note

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Introduction
Innovation is considered to be a complex construct with other prevalent ideas such as
technologies, change and creativity. The research on the innovation covers various fields such
as business, engineering, economics, public administration and many others. There are
scholars who have studied the concept of innovation at various levels as groups, individuals,
industry and the economy. The term organizational innovation is connected with the
innovation studies in the public and business organizations. The studies related to innovation
in the organizations are multilevel, multidimensional and context-dependent. It consists of the
internal and external conditions induce the innovation and how the organizations manage the
process of innovation. The aim of this paper is to choose one incumbent that is being beaten
by a challenger in the business (Brea-Solís and Grifell-Tatjé 2019). The selected organization
is Kmart which is suffering from the failure to deliver what the customers really want. This
paper will conduct a thorough analysis of the organization along with its current conditions
by referring to four of the strategic frameworks such as Porter’s Five Force model, Porter’s
Value Chain model, PESTEL analysis and the SWOT analysis. Based on the analysis, a
detailed solution to the organization to resolve the issue will be provided through either
disruptive technologies or innovation.
Discussion
Overview of the company
Kmart is an Australian retail store chain which is owned by Wesfarmers. There are
almost 229 stores of Kmart in entire Australia and New Zealand and the head office is
situated in Melbourne. In the year 1969, Kmart opened in Australia as a discount department
store in Burwood. It somewhat revolutionized the method of Australian and New Zealand

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shopping. Kmart has been recognized as one of the most profitable discount departments
stores in the entire Australia. There are approximately 30,000 team members who work in
the retail stores. The vision of the organization is to provide the families with everyday
products within the lowest prices. The company further strives for the high-volume sakes, the
adaptable stores, great culture and efficient operations. The company also has a powerful
sustainable development program where they listen closely to their people, he customers and
think about the community.
Issues faced by Kmart
Instead of being one of the most successful retail companies of Australia, the
organization is recently facing issues in the discount-department store chain. The problem is
with meeting the evolving demand of the customers and their expectations. The managing
director has found that the organization is failing to deliver what is really wanted by the
customers. The customers are demanding more information from Kmart along with a super
shopping experience with better products within lower prices. Since the organization aims at
doubling sales growth, it will have to achieve continuous improvement amid the worsening
conditions of the market (Clarke 2018). It will have to somehow innovate within the products
or services with the help of latest technologies to retain the customers.
Porter’s Five Force Model
The five force model of Porter is a strategic management tool which helps in
determining the competitive landscape of particular industry. The five forces help the
strategic planners to understand the profit potential in an industry. The strengths of these
forces change as per the industry signifying that every industry is different than the other
(Karakaya and Parayitam 2018). The five forces are Threat of New Entrants, Bargaining

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power of the suppliers, bargaining power of the buyers, threat of substitutes and rivalry
among the existing firms.
Threat of New
Entrants
Bargaining
power of the
suppliers
Bargaining
power of the
buyers
Threat of
substitutes
Rivalry among
the existing
firms
In the retail
industry, the
economies of
scale are
extremely
difficult to
obtain. This
helps the large
firms gain a cost
advantage. The
threat of new
entrants is made
weaker in this
manner. The
product
differentiation is
quite string in
this industry and
the customers
look for the
In this industry,
there is a lot of
suppliers as
compared to the
buyers. This
makes the
bargaining
power of the
suppliers weak.
The suppliers
are bound to
provide goods at
reasonable price
as the switching
cost is low.
The number of
buyers is more
than the number
of firms which
produce the
products.
Since the
product
differentiation is
high, the buyers
cannot find
alternatives for a
particular
product easily.
The quality is
important for the
buyers making
buying a
frequent
process. This
There are less
substitutes for
the products
which are
produced in the
industry. It
mean there are
no such
limitation on the
maximum
profits earned by
the company in
this industry.
The substitutes
are either
extremely
expensive or
unavailable.
Therefore, the
buyers tend to
There are rivals
in this industry
and the biggest
one is Coles.
The strategies of
the firms are
diverse which
makes them
unique in their
own selves. This
makes this force
a strong one.