This case study examines Kohl's Corporation, a major U.S. department store chain, through multiple strategic lenses. The paper provides an overview of the company's history and product mix, followed by an industry analysis of the global apparel market. It applies Porter's Five Forces and the Raymond Miles and Charles Snow strategic typology to assess Kohl's competitive position, identifying the company as a "defender" type. A SWOT analysis highlights the firm's stability and national presence while noting vulnerabilities tied to long-term planning during economic downturns. The paper concludes with short-term strategic recommendations across product, price, distribution, and promotional dimensions, tailored to the 2008 global financial crisis environment.
The paper demonstrates framework-driven business analysis: each analytical tool is introduced, briefly explained, and then directly applied to the subject company. This technique — common in MBA-level case studies — shows how abstract models translate into real-world strategic insight. The Miles & Snow classification is particularly well used, as it informs both the SWOT interpretation and the final strategic recommendation.
The paper follows a standard business case study structure: company background → external environment (industry, macro, competitors) → internal strategy assessment (Porter, Miles & Snow, SWOT) → prescriptive recommendations (marketing mix). Each section logically feeds into the next, moving from description to diagnosis to prescription. This progression mirrors the strategic management process and makes the argument easy to follow.
Kohl's Corporation is a department store chain founded in 1962. The company's headquarters are located in Menomonee Falls, Wisconsin. It was founded by Max Kohl, who established the first Kohl's supermarket in 1946, which later developed into the Kohl's Food Stores chain (Wikipedia, 2008).
When the first Kohl's department store opened in 1962, it was positioned between higher-end department stores and discounters. A decade later, the British American Tobacco Company purchased a significant stake in Kohl's Corporation, spurring further development. The company was subsequently acquired in 1986 by a group of investors and went public in 1992. At the time of this analysis, Kohl's was the 23rd largest retailer in the United States, operating 1,003 stores across 48 states.
Kohl's serves a broad range of customer needs, offering national brand-name merchandise, exclusive labels, and private-branded goods. Its product assortment includes apparel, shoes, and accessories for women, men, and children, as well as home products such as small electronics, kitchen appliances, electric shavers, toothbrushes, vacuums and floor-care items, bedding, toys, and luggage. The company also carries exclusive lines such as Ralph Lauren and Vera Wang, alongside its own private brands.
The company's mission is to become the leading value-oriented, family-focused specialty department store.
Kohl's operates primarily within the retail apparel sector. As industry reports indicate, the global apparel market was expected to undergo significant change in the period following 2008. In 2007, the global apparel market was valued at approximately $600 billion, with 82% of that total generated by the world's top 15 exporting countries.
Classic outsourcing destinations were projected to decline in importance as new sourcing regions emerged in the global supply chain. Notably, China and India — the two most significant outsourcing regions in the apparel industry — were expected to register declines in activity due to widespread labor strikes as well as rising manufacturing and transportation costs (Just Style, 2008).
Customer preferences were also anticipated to shift, with both buyers and suppliers moving toward value and speed-to-market rather than simply minimizing costs. As a result, prices were expected to rise alongside improvements in product quality — meaning consumers would pay more but receive better value.
Due to the 2008 economic slowdown, countries exporting primarily to the United States reported mild declines in export volumes. However, certain regions — particularly in Central America — were forecast to experience growth in apparel outsourcing, driven by special trade concessions. Similarly, several African nations were expected to benefit from the African Growth and Opportunity Act, increasing their exports to the United States and other markets.
The competitive decline of Chinese firms — attributable to higher labor costs, RMB appreciation, rising raw-material prices, and reductions in export tax rebates — further contributed to this geographic shift. Although the United States was set to remove import restrictions on certain Chinese apparel categories, industry observers expected China and India to lose much of their outsourcing advantage to Vietnam and Bangladesh.
Domestic U.S. apparel production reached its lowest point in 2008 following a decade of continuous decline, while the average price per unit rose approximately 25%, reflecting consumer preference for higher-quality goods.
Kohl's most important competitors include Bloomingdale's, Macy's, Sears, Kmart, and The Great Indoors.
Financial data from Macy's 2007 Annual Report show that net sales, gross margin, net income, net income per share, and shareholders' equity all declined from 2006 levels. Similarly, Sears' 2007 Annual Report reveals decreases in total revenues, net income, and total assets compared to 2006. One positive development for Sears was a reduction in long-term debt; however, net income per share fell by nearly half year-over-year. Despite this decline, Sears' net income per share remained almost triple that of Macy's.
The political environment reflects a country's social structure, class dynamics, political forces and their interrelationships, the degree of government involvement in the economy, and political stability at domestic, regional, and international levels.
The most influential organizations and associations shaping the U.S. apparel market include the American Apparel and Footwear Association (AAFA), the American Apparel Producers' Network (AAPN), the American Fiber Manufacturers Association (AFMA), the American Association of Textile Chemists and Colorists (AATCC), and the American Cotton Shippers Association (ACSA). The federal government also plays a key role through trade treaties and legislation governing cooperation with importing countries, and the legal environments of outsourcing nations further affect the apparel industry.
The economic environment encompasses economic activity levels, overall development, employment and unemployment, financial conditions, and related factors. These elements directly and indirectly influence market dynamics and company performance — shaping supply volumes and structure, income levels, prices, and competitive intensity. Economic analysis should be conducted alongside demographic analysis. Key economic and demographic indicators for the United States at the time of this study, drawn from the CIA World Factbook, include:
Population growth rate: 0.88%. GDP real growth rate: 2%. GDP per capita: $45,800. GDP composition by sector: agriculture 1.2%, industry 19.8%, services 79%. Unemployment rate: 4.6%. Inflation rate: 2.9%. Investment: 15.5% of GDP. Household income share: lowest 10% holds 2%, highest 10% holds 30%. Public debt: 60.8% of GDP. Exports: $1.148 trillion. Imports: $1.968 trillion. Export partners: Canada 21.4%, Mexico 11.7%, China 5.6%, Japan 5.4%, UK 4.3%, Germany 4.3%. Import partners: China 16.9%, Canada 15.7%, Mexico 10.6%, Japan 7.4%, Germany 4.8%.
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