Is Kmart Caught in a Doom Loop

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May 24, 2002
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When companies run into trouble, the desire for a quick fix can become overwhelming. Lurching from one solution to another, the company never gains any traction, reports Fortune as one of 10 reasons why companies fail. Jim Collins, author of the influential management books, calls it the “doom loop.”

“A&P vacillated, shifting from one strategy to another, always looking for a single stroke to quickly solve its problems. [It] held pep rallies, launched programs, grabbed fads, fired CEOs, hired CEOs and fired them yet again,” writes Mr. Collins in Good to Great.

Kmart is another case in point. “In the 1980s and early ’90s, Kmart was all about diversification, shifting away from discounting to acquire stakes in chains like Sports Authority, OfficeMax and Borders bookstores. In the 1990s, a new management team divested those stores and decided to revamp Kmart’s supply chain by investing heavily in IT. That lasted until a new CEO, Chuck Conaway, decided that Kmart would try to beat Wal-Mart at its own game. This unleashed a disastrous price war that in the end proved to be one mistake too many,” reports Fortune.

Moderator Comment: Has Kmart finally learned from its mistakes?

Spike Lee commercials are not enough for us to hop on
the Kmart bandwagon. [George
Anderson – Moderator
]

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