EXECUTIVE SUMMARY Kmart was the largest discount retailer with competitors like Wal-Mart continually increasing their profits, Kmart's market share dropped to 13% and continues to decline. Wal-Mart's early use of IT in the industry was a major factor in Wal-Mart's rise around Kmart and the fall of this once giant retail chain. Walmart was the first in the industry to operate at scale, operate a computerized inventory system, use bar codes and wireless scanners, allow electronic data exchange with suppliers, and expand around distribution centers central. With its recent Chapter 11 bankruptcy filing and its once-loyal customer turning to competitors, it can't seem to find key selling points to attract customers - or potential shareholders. Kmart needs to focus on its strongest competitive advantage: private brands such as (Martha Stewart Everyday, Jaclyn Smith, Disney and Sesame Street) and a good value proposition on all products offered by the store. Wal-Mart's low price competition is a weakness for Kmart, because they are unable to match these prices. Another weakness is that their stores are considered old and outdated, and their distribution system is not very efficient. Kmart has some opportunities that could improve their situation, with the purchase of the IBM systems this will give them an improvement in customer relations and processing, update the old store with a new look, increase advertising of their strongest brands, will work on developing a new supply chain management that can manage data efficiently, this will eliminate unnecessary internal inventory. If Kmart puts these opportunities into action, it might be able to stay in the game. With Kmart coming out of bankruptcy and acquiring Sears for 11 billion it was a bold move that should position them as the third largest discount agent. The key to this merger is that they should be able to maximize cash flow and benefit from cross-selling the exclusive private label currently sold by each store. Company History Sebastian S. Kresge founded S.S. Kresge Corporation, Kmart's predecessor, in 1899 in Detroit, Michigan. Kresge's first retail store. The store grew into a chain known as SS Kresge. By 1912, the chain operated 85 stores. By the 1920s, Kresge operated larger stores that offered a wider variety of merchandise and prices, precursors to modern discount stores. The first Kmart opened 1962.