Sears and Kmart Merger: Strategy, Challenges, and Store Improvement
This paper examines the history of Sears from its founding in 1886 through its merger with Kmart, analyzing the strategic motivations behind the consolidation and evaluating its outcomes. The paper traces Sears' evolution as a retail innovator and explores how the merged company's management strategy—particularly cost-reduction and aggressive negotiation tactics—impacted store operations and customer satisfaction. Drawing on retail analyst perspectives and customer experiences, the paper concludes with recommendations for store redesign and operational improvements to restore customer confidence and competitive positioning.
- Sears History and Development: From 1886 watch sales to retail giant
- Sears Business Strategy and Operations: Productivity, efficiency, technology, and online focus
- The Sears and Kmart Merger: Strategic rationale for joining store formats
- Merger Outcomes and Management Challenges: Leadership misalignment and customer dissatisfaction
- Store Improvement Recommendations: Redesign and operational fixes for retail recovery
✍️ How to write this paper — guide, tools & examples ▾
What makes this paper effective
- Provides concrete historical context—from Sears' 1886 founding through early 20th-century innovation—that grounds the merger discussion in institutional legacy
- Includes specific customer anecdotes (the older woman seeking sewing machine parts, young women evaluating coats) that illustrate abstract management failures with real retail experiences
- Synthesizes expert opinion (retail analyst Richard Hastings, journalist Joseph Eisinger) to support claims about store conditions and competitive spending gaps
- Moves logically from merger rationale to actual outcomes, exposing the gap between strategic intent and execution
Key academic technique demonstrated
The paper uses comparative case analysis—contrasting Kmart's cost-reduction success before the merger with Sears' deterioration after it—to argue that financial engineering alone cannot sustain a retail brand. It pairs this structural analysis with evidence from customer behavior and third-party expert assessment, creating a multi-angle critique of leadership judgment.
Structure breakdown
The paper follows a chronological-then-analytical arc: historical foundation (Sears' 1886–2000s evolution) establishes the company's retail credibility; strategic overview explains pre-merger positioning; merger section pivots to outcomes and leadership critique; final section pivots to solutions. This structure allows readers to understand why the merger failed (misalignment of financial strategy with retail operations) before proposing fixes (store redesign grounded in customer research).
Sears History and Development
Sears began its activity in 1886, when Richard W. Sears created the R. W. Sears Watch Company. After resigning from his job as a railroad station agent, he started selling watches to other agents. In 1887, Alvah C. Roebuck joined Sears, and the company introduced jewelry and other products in its catalogue. The company continued to expand its range of products and its area of activity. Sears, Roebuck and Co. was officially established in 1893, with a catalogue that included sewing machines, bicycles, sporting goods, appliances, groceries, and other merchandise.
During this formative period, Sears continuously developed its range of products and services while improving work conditions for its employees. In 1901, Sears published an employee newsletter. In 1906, Sears issued an initial public offering. In 1911, Sears opened a series of product testing labs. The company demonstrated sustained interest in its employees and the community by implementing programs designed to improve their conditions (Sears, 2010).
In 1921, Sears confronted a financial crisis, which forced one of the company's owners to use his fortune to save the company. The company subsequently became involved in agriculture by creating an agricultural foundation. During the 1930s, Sears launched an insurance company, changed its top management, and expanded its chain of stores.
World War II significantly affected the company's activity, but Sears managed to develop strategies that helped it maintain its position on the market. During the following decades, Sears continued to introduce numerous products in its catalogue and expand the geographical areas it served. The technological developments and marketing strategies that continuously evolved to suit market needs shaped Sears' strategic direction.
Sears Business Strategy and Operations
The business segments owned by Sears Holdings Corporation include Kmart, Sears Domestic, and Sears Canada. To maintain and improve its market position, Sears has focused on improving the company's productivity and efficiency (Annual Report, 2009). These objectives were intended to be achieved by focusing on outsourcing, supply chain efficiencies, franchising, labor model optimization, and consolidation of functions.
The company also focused on investing in technology and innovation to improve customer experience. Sears observed customers' increased interest in online shopping and developed and implemented services designed to facilitate customers' online shopping activity and diminish risks associated with the Internet.
Create your account
Always verify citation format against your institution’s current style guide requirements.