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Rock Street, San Francisco

4. Customer relationships.

?      Easy self-service online

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The Kohl’s website is specifically designed to make the
shopping online experience as easy as possible. The mobile app is also
designed, to give the customers the opportunity to shop anywhere.

?      Personalized assistance

When needed, customers can benefit from the service of
personal assistance offered in the physical stores.1

?      Customer care

On the website design for customers there is section
available that describes and answer most frequent questions. There is also a
helpline available.

5. Customer segments

?      Men and women over 35, children

At Kohl’s, the targeted demographics are wide. On the
website there are offered products for women, men and children. Those are the
core customers at Kohl’s, and they bring the most revenue to the company.2

?      Millennials

Millennials is a secondary target group, at the moment
Kohl’s is experiencing issues with those customers, since the sales within this
target market considerably decreased.3

6. Key resources.

?      Intellectual property and brands

One of the main key resources of
Kohl’s are the brands that are some merchandised to the shop, and some that are
designed particularly for Kohl’s (intellectual property).

?      Real estates that is leased and owned

An important aspect, is that all
Kohl’s stores have almost the same size, a perfect prototype store is usually
88,000 gross square feet of retail space and serves trade areas of 150,000 to
200,000 people. 4
412 stores are owned and 505 are leased.5

?      Online platforms

According to the corporate website,
the online website for customers offers everything that the customers want and
even more, with the help of the app online shopping became even more
accessible.

?      Supply chain

Consists of an important resource,
since without being supplied with all the necessary merchandise and other
attributes, the business would not exist.

?      Personnel

Having physical stores, implies the
importance of having staff that will assist clients when needed.

 

7. Channels

?      Consumer website

Is designed to bring the shopping
closer to customers, by offering even wider variety of products that can be
found in stores.

?      Corporate website

A website designed to provide
corporate information to investors and all stakeholders and shareholders. It
describes company’s activities, strategies and goals.

?      Physical stores

Being a player in retail industry,
physical stores is an important channel to get customers.

?      Mobile app

“Shop on the go” is a newly created
and constantly renovated channel that was created as a response to the changing
customer needs.

8. Cost Structure

?      Space lease

Almost half of the stores are
leased. This consists one of the costs that the company encounters. The company
has to constantly invest and spend money on the space in order to exist.

?      Human Resources

Employees, that are aimed to support
the customers and to help them are important aspect for investment, employees
need to be trained and happy in order to provide high quality service. As of
January 2017, at Kohl’s are employed 138,000 associates, including
approximately 32,000 full time and 106,000 part-time associates.6
The number of associates varies during the year, peaking during the back- to-school and holiday seasons.7

?      Product development

Because there are some of the
products that are available exclusively at Kohl’s, obviously, a certain amount
of money is spent on product design and development.

?      Administrative expenses

Expenses that can’t be avoided when
having physical stores. Managing the space and the equipment requires
considerable amount of money.

9. Revenue streams

?      Sales of apparel and accessories

The one and only source for revenue
at Kohl’s is the sales fee on the offered merchandise. In 2017, Kohl’s gross
profit is 6.74B.8

4.  Porter’s five
forces.

Rivalry among existing
competitors.

Retail industry can be considered
competitive. Because the customer needs and wants are constantly stimulated by
marketing and advertising, more and more retailers are opening stores and are
fighting for market share by trying to offer differentiated value to customers.
The retail industry became recently even more intense, because of the new way
of buying – online.

Bargaining power of buyers.

‘In retail, buyers can be considered
powerful, since they would constantly seek to buy better products and spent
less money as possible. This also becomes more possible because customers have
the opportunity to go to different retailers and evaluate the price quality
relation. Moreover, most of the retailers, display their offerings and prices
online, therefore, it is even easier for customers to seek better deals. This
can put considerable pressure on Kohl’s income and sustainability.

Bargaining power of suppliers.

Kohl’s business is fully based on
its suppliers and vendors. In this situation, suppliers are powerful, because
they offer the unique merchandise that is crucial for Kohl’s value proposition.
By being powerful, suppliers can change the terms and conditions, increased
price of merchandise would influence Kohl’s profit margins in a negative way.

Threat of new entrants.

Even though the barriers are high,
since it is not easy to open a new retail store, create a network of suppliers,
the threat of new entrants is still high. Within the retail industry, customer
needs are constantly changing and evolving, which creates new target segments that
are attractive for the new entrants. Therefore, new retailers are entering the
market with innovative products and services, thus creating more and more
challenges for Kohl’s to overcome the issues and to stay competitive.

Threat of substitutes.

Because Kohl’s offers apparel,
accessories and home products, those can be easily substituted by other retailer’s
offerings. However, in case of Kohl’s, since the products they offer are
differentiated, they can avoid a certain amount of pressure from the
substitutes.

5. Strategic group map

In order to identify which companies
within the industry are closest rivals for Kohl’s, the Strategic Group Map was
developed. 9  For this section, competitors were selected
based on two factors: merchandise range and net income, both, online and in
stores. Since many activities at Kohl’s are currently oriented to create a
pleasant online shopping environment, it is crucial to identify the online
sales success of it’s competitors. Therefore,
key competitors are:

Amazon
Macy’s
Costco
Target

1 Annual report

2 Goodfellow, Pam. “Kohl’s Has A Millennial
Problem.” Forbes, Forbes Magazine, 25 Feb. 2016,
www.forbes.com/sites/forbesinsights/2016/02/24/kohls-has-a-millennial-problem/#6eafb0c7424a

3 Goodfellow, Pam. “Kohl’s Has A Millennial
Problem.” Forbes, Forbes Magazine, 25 Feb. 2016,
www.forbes.com/sites/forbesinsights/2016/02/24/kohls-has-a-millennial-problem/#6eafb0c7424a.

4 Annual report

5 Annual report

6 Annual report

7 Annual report

8 “Kohl’s income-Statement 2017.” Amigobulls.com,
amigobulls.com/stocks/KSS/income-statement/annual.

9 Thompson, Arthur A., A. J. Strickland, and
John Gamble. Crafting and Executing Strategy: The Quest for Competitive
Advantage: Concepts and Cases. Boston: McGraw-Hill/Irwin, 2008. 126. Print.

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