The strategic managers at Kohl had to deal with certain external trends. These trends included the location of its stores and the poor shopping experience by customers in other retail shopping malls. In addition, it had to deal with the increasing intensity of competition. According to the case, the buyer’s bargaining power also increased and required the attention of Kohl stores. It should also differentiate its products in order to gain customer loyalty, which will, in turn, ensure increased and continuous sales (Koenig and Fredrix 34).
Other important areas include serving different needs of customers, both with lower and higher incomes, and better customer service. Such actions should continuously be improved to keep track of changes in the market. As a result, the company will be capable of achieving a competitive advantage in the marketplace.
As a strategic decision-maker at Kohl, external information for decision making required includes political, social, financial, economic, and physical environmental factors (Merrick 11). These factors influence the market and hence the success of the business. For example, the legal-political environments affect the business policies adopted. Favorable business policies facilitate trading activities, which further lead to better performance.
On the other hand, unfavorable policies hinder the success of the business. All other environmental factors also affect the business in different ways. As a store manager, I would want to know about the technological environment. The use of technology facilitates customer service, and thus increasing the volume of sales. Increased and efficient sales management enhances the profits of the business, which can be reinvested into the business to counter competition in the industry.
The strategic decision-makers have done a good job by carrying out environmental scanning and assessment. Environmental scanning and assessment are important because they enable the company to collect data necessary for the decision making process. Through this, current performance can be evaluated, thus accounting for the adoption of a new approach of convenience and pricing by Kohl (Covert 5). As a result, high customer satisfaction and loyalty are achieved.
It also facilitates forecasting future performance to enable the company to uphold its performance. Scanning the environment also helps a company to review its products and the marketplace. In addition, the changing economic and environmental factors are reviewed to facilitate adaptability to changing situations. Internal scanning can also be used to improve the effectiveness of the business operations by making use of quality staff (Covert 4).
Changes in the external environment of a business create both opportunities and threats. Opportunities evident in the case are the weaknesses of other competitors. In this case, the competitors were the other retail establishments. These included lack of or vague information on products, long checkout lines, wrong pricing, and lack of qualified and experienced sales staff (Ton 3). Therefore, Kohl should take advantage of these weaknesses by offering solutions to each of the problems to enable it to achieve a competitive advantage. On the other hand, the threats to Kohl include customers’ retention and increasing intensity of competition from other firms.
As in the case, Kohl added a collection of home furnishings, clothing, household goods, and shoes in order to retain the segment of its existing customers. Additionally, Kohl is facing high competition from other participants in the industry. Other firms are competing by copying the strategies of Kohl while others compete by increasing and improving brand qualities. In order to counter the benefits of strategic locations, other competitors are adopting the strategy of price reduction, which is a great threat. Therefore, Kohl should adopt strategies that can create more opportunities to enable it to counter threats.
Works Cited
Covert. “JC Penney Is Stocking Up On More Private Label Styles.” Wall Street Journal, 2007: P. B3. Print.
Koenig, David, and Emily Fredrix. “JC Penney and Kohl’s battle for shoppers,” Associated Press: Springfield News leader, 2006. Print.
Lien, Ton. “Hot Kohls”. Wall Street Journal, 2007: p. R3. Print.
Merrick, Amy. “New Game at Kohl’s dressing up.” Wall street journal, 2002. Print.