Kmart's Business Model: Canvas, SWOT Analysis, and Strategy

This report provides a comprehensive analysis of Kmart's business model using the business model canvas framework and SWOT analysis. The business model canvas explores key aspects such as value propositions, customer segments, key partners, activities, resources, customer relationships, channels, cost structure, and revenue streams. The SWOT analysis identifies Kmart's strengths, weaknesses, opportunities, and threats, offering insights into its competitive positioning and strategic challenges. Key strengths include excellent customer service and brand loyalty, while weaknesses involve an overleveraged financial position. Opportunities lie in emerging markets and brand acquisitions, whereas threats include the impact of the Covid pandemic and extensive competition. The report concludes that the business model canvas and SWOT analysis are vital tools for understanding Kmart's strategic approach and making informed business decisions.

Learning Management
System

Contents
INTRODUCTION...........................................................................................................................1
Business model canvas Components ..........................................................................................1
Business model Canvas ...............................................................................................................2
SWOT analysis ...........................................................................................................................4
CONCLUSION ...............................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
Business model canvas can be understood as tool which is used for visualising building
blocks which provides answers to varied questions such as when to start a business, value
propositions, customer base and many more (Daou & Et. Al., 2020). For better understanding of
business model canvas, Kmart is taken into consideration. Kmart is an Australian organisation
which is chain of departmental stores. It operates its operations in Australia as well as New
Zealand and has its headquarters at Melbourne, Australia. This organisation is committed to
provide seamless shopping experience to their customers through online and offline mode. This
organisation has been undertaken for this project as it deals in groceries and have a simple
business model which made it justified for the specified assignment.
Business model canvas Components
Business model canvas is a plan which is used for describing how organisational
practices intends to make money by delivering their products or services in a strategic manner
(Ladd, 2018). Components of business model canvas are mentioned below:
Value Proposition – This can be described as practice which adds value to products or
services offered to customers. With the aid of unique value proposition of an organisation,
customers choose to procure products of a specified brand over their competitors. Unique value
proposition provided by Kmart are offering essentials and differentiated goods at discounted
prices, high-quality products at reasonable prices.
Key Partners- Partnerships are considered as essential for becoming successful in regards
with short-term and long-term goals (Mičieta & Et. Al., 2020). Kmart runs their operations in
collaboration with Target Group. They also have collaborated with varied suppliers and vendors.
Key Activities- In this section, significant activities of organisation came into force
which led them to reach customer segments, maintaining relationship as well as generating
value. Key activities of Kmart includes selling of commodities, engage in marketing activities
and engaging in solving customer complaints and queries.
Key Resources- Under this section, key resources or main inputs are taken into
consideration which help in fulfilling key activities. Key resources of Kmart encompasses of
their human, financial and physical resources.
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Customer Relationship- In this section, organisational managers determine the ways
which help them to make interactions with differentiated customer segments (Crotty, Kinney &
Farren, 2017). Managers of Kmart offer self-service practice to their customers while exploring
their departmental stores.
Distribution Channels- This block of business model canvas is used by organisations
which help organisations to communicate with their target customers. It also consists of
distribution channels which is used by organisations to make a reach to segmented customers.
Customer Segments- These can be understood as specified target segments towards
which an organisation wants to reach in a strategic manner. It is required for businesses to
segment their customers on the basis of demographic and geographic aspects. Customer
segments of Kmart are consists of population of Australia and New Zealand. They also target
those segments which require good quality products at reasonable rates.
Cost Structure- Under this block, organisational managers recognise their cost which is
closely associated with operating their business model in an effective manner. Cost structure of
Kmart encompasses of compensation paid to employees, procuring of products for selling,
providing merchandise discounts and many more.
Revenue Streams- These can be understood as sources which are used by organisations
for generating wealth by selling their services or products. Revenue streams of Kmart comprises
of selling of products, sale of fixed assets and many more.
Business model Canvas
Business model canvas in relevance with Kmart is as mentioned below:
Key Partners
 Collaborat
ion with
Target
Group
 Suppliers Vendors
Key Activities
 Selling of
goods
 Involving
in
marketing
practices
 Solve
customer
complaint
Value
Propositions
 Provides
high
quality
goods at
affordable
prices
 Provides
merchandi
Customer
Relationship
 Self-
directed
service
provided
to
customers
at
departmen
Customer
segments
 Geographi
cal base
includes
population
of
Australia
and New
Zealand.
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s on a
constant
manner
se
discounts
 Every
grocery
product
can be
found in
its
departmen
tal stores.
tal stores.
 Customer
queries
are solved
in time in
a
consistent
manner.
 Consists
of middle-
income
group
people.
Key Resources
 Human
resources
 Physical
stores
 Trademar
ks
 Unique
Advertisin
g content
Channels
 Advertisin
g through
digital
media and
social
platforms.
 Distributio
n channel
consists of
suppliers
and direct
customers
in a
strategic
manner.
Cost Structure
 Employees salaries
 Procurement of products from
external parties
Revenue Streams
 Selling of products
 Generated revenue through selling of bonds and
assets
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 Advertising and marketing
cost Working capital
 Investment in mutual bonds and other aspects
SWOT analysis
SWOT Analysis is understood as a strategic framework which is used by organisation for
assessing impact of intrinsic forces on business operations (Teoli, Sanvictores & An, 2019). It is
considered as vital tool which help organisational managers in formulating varied strategies in an
effective manner. SWOT analysis of Kmart is as follows:
Strengths
 Excellent customer service- Managers
of Kmart offer excellent customer
service which help them to strengthen
their operations. Brand loyalty- Kmart is known for
maintaining its brand loyalty which is
considered as its strength.
Weaknesses
 Closure of stores- This has affected
significantly on market share and
reputation of the organisation.
 Overleveraged financial position-
Managers of Kmart have are facing
overleveraged financial position which
poses as a weakness for them.
Opportunities
 Emerging markets and expansion
practices- Managers of Kmart can plan
to expand their market operations in
emerging marketing conditions. Acquisition of new brands- Managers
of Kmart can tie up with differentiated
brands for increasing their market
share.
Threats
 Impact of Covid pandemic- This
situation has changed the spending
patterns of consumers in a significant
manner.
 Extensive competition- Managers of
Kmart have to deal with a threat of
extensive competition in industry.
CONCLUSION
From the above presented information, it has been concluded that business model canvas
is vital tool which help organisations in determining their customer relationship, channels, cost
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structure, revenue streams and many more. SWOT analysis is considered as a model which is
used by organisations for evaluating impact of internal environment on practices related to
business.
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REFERENCES
Books and Journals:
Daou, A. & Et. Al., (2020). The Ecocanvas as a business model canvas for a circular
economy. Journal of Cleaner Production, 258, 120938.
Ladd, T. (2018). Does the business model canvas drive venture success?. Journal of Research in
Marketing and Entrepreneurship.
Mičieta, B. & Et. Al., (2020). Business model canvas as a tool of manager 4.0, (1), 51-64.
Crotty, Y., Kinney, T., & Farren, M. (2017). Using the Business Model Canvas (BMC) strategy
tool to support the Play4Guidance online entrepreneurial game. International Journal for
Transformative Research, 4(1), 34-41.
Teoli, D., Sanvictores, T., & An, J. (2019). SWOT analysis.
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