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Strategic Plan: Kohl’s Corporation (NYSE: KSS)

Student Name

American Public University

BUSN620: Strategic Management

Instructor name

Date

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Executive Summary

Kohl’s strategic plan is a vital element that supports its strategic management of the

company to achieve success in its goal towards greatness as an omni-channel retailer offering a

multitude of brands, national and exclusive, to provide value for its customers. The plan covers

the history, products and services, operations, vision, mission statement, corporate values and

culture, SWOT (strengths, weaknesses, opportunities, and threats), competition, management

and leadership team, financial outlook, and strategies for the company. While many

organizations are suffering in the ongoing COVID-19 pandemic Kohl’s is without exception, but

its plan will help to recover and continue its movement towards growth and greatness.

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Strategic Plan: Kohl’s Corporation (NYSE: KSS)

Overview

Kohl’s, established in 1962, is an omni-channel retailer that provides national and

proprietary brand merchandise that is available in six categories: footwear, accessories, women,

men, children, and home (Kohl’s Corporation, 2019). The company operates in 49 states

comprising of 1,159 retail outlets, 14 distribution centers and has more than 34,000 employees

(Kohl’s, 2020). In addition, it provides an online presence providing customers the ability and

convenience of shopping from home where the customer may have their purchases delivered to

their homes or they can pick them up from a retail location.

History

Kohl’s history began in 1962 when they opened the first store in Brookfield, Wisconsin.

In 1992 they went public with 11,100,000 shares on the New York Stock Exchange (NYSE:

KSS). When Kohl’s partnered with Estee Lauder in 2004 it made available a luxury brand of

skincare and makeup helping to provide value with quality products. Continuing the move to

enhance their product lines Chaps was added in 2005. In 2008 Kohl’s introduced a children’s

private brand Jumping Bean while continuing to add to its other clothing lines. It also added Liz

Claiborne as an exclusive line which helped to beef up its higher end apparel for women.

In 2011 the retailer announced that it will add electric vehicle charging stations at 33 of

its locations to better its social responsibility positioning by providing support for its

environmentally conscience customers (Kohl’s Corporation, 2019). Additionally, in 2011 the

company installed solar panels in 20 of its locations.

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The year 2015 was instrumental when the company announced its multi-year strategic

initiative, the Greatness Agenda, and implemented its plan to become an omni-channel retailer

(Kohl’s Corporation, 2019).

Products and Services

Kohl’s offers a variety of products for women, men, and children that comprise national

and exclusive brands.

Products

The retailer includes national brands such as Columbia, Carter’s, Keurig, Levi’s, Nike,

Under Armour, and Polo Ralph Lauren just to name a few. It also carries several proprietary

brands such Croft and Barrow, Sonoma, Apt. 9, and Jumping Beans along with several others

(Kohl’s, 2020).

Services

To provide a well-rounded service for its customers Kohl’s offers its proprietary credit

and rewards cards along with its Kohl’s Cash program that provides extra cash determined by the

purchase amount that customers can use in addition to regular discounts (Kohl’s, 2020). In

addition customers can shop online with a smartphone application.

Operations

Critical to the success of any retail outfit is its operations strategy which entails getting

the merchandise from the manufacturer to the store (Wheelen et al., 2015), and eventually the

customer. As an omni-channel retailer providing the flexibility through the customary brick and

mortar facility, the ability to shop online and either have the merchandise shipped to their home

or to a local retail store, the company ensures that their operations are an integral part of their

success. Kohl’s utilizes nine retail distribution centers located throughout the country with

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several vendors delivering directly to the stores (Kohl’s, 2020). Deliveries are made to the retail

outlets several times during the week.

Kohl’s takes its social and environmental responsibility serious and this is an integral part

of its operations strategy. Kohl’s has realized that there is a “correlation” between its corporate

culture, employees, and customers which helps to provide a positive image for the company and

its shared values (Inabinett and Ballaro, 2014, p. 55). There has been an increased focus on a

company’s efforts towards philanthropy, environmental sustainment, safety and security,

diversity and inclusiveness, and especially the organization’s adherence to its values, ethics, and

governance policies.

Vision

A company’s vision statement describes where the company wants to be in the future, or

its long-term goals, basically where does it want to be several years later (Papin and Kleiner,

1998). This helps the employees, executives and shareholders understand the strategy employed

to reach this goal. It also helps to give customers a picture of how the company will provide

desirable services and products. The vision statement for Kohl’s, "we not only offer the best

merchandise at the best prices, but we're always working to make your shopping experience

enjoyable” (Comparably, 2020), is simple, succinct and easily understood so that the employees

support Kohl’s future opportunities and helps their customers feel that they can obtain value

from the business.

Mission Statement

An organization’s mission statement is an important part of defining its strategy because

it describes the purpose of an organization, basically the who, what, where, when, and how a

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company exists. It identifies an organization’s products and services through explicit descriptions

(Wheelen et al., 2015). Kohl’s mission statement:

At Kohl's, our mission is to inspire and empower families to lead fulfilled lives. For more

than 50 years, Kohl's has enjoyed a history of strong leadership. Our leadership team

continues to move the company forward on the path to greatness (Comparably, 2020).

The first line clearly describes what Kohl’s provides its customers and how its organization

through its leadership will fulfil that mission.

Corporate Values and Culture

Kohl’s takes its social responsibility seriously in many ways to ensure that their

customers will find value in Kohl’s offerings. Kohl’s has four values that provide the company’s

employees a unified focus to ensure everything they do supports the organization’s responsibility

to its customers, employees, and investors: put customers first, act with integrity, build greater

teams, and drive results (Kohl’s Ethics, 2020). It is worthwhile to mention that Kohl’s was

recognized for 2019 and 2020 as one of the world’s most ethical companies (Ethisphere, 2020).

Put Customers First

First and foremost, for any business it to focus on its customers since they are the reason

for the existence of the organization. Kohl’s sees their customers as not only a source of revenue

but a means to gain innovative and supportive efforts for the company to succeed. The

company’s attitude is to say “yes we can” which helps to include the customers as important

players (Kohl’s Ethics, 2020).

Act with Integrity

Integrity is an important consideration for a successful and Kohl’s has realized that trust

is important by ensuring that their commitments are met. They make sure that their employees

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understand that another important element of their integrity is to “treat others with respect and

fairness (Kohl’s Ethics, 2020). Their actions to ensure that integrity is a main part of their

organization involves their decision-making process that focuses on the company’s reputation.

Build Great Teams

An organization’s success depends on the quality of its teams that comprise the

company’s leadership and employees. Tatarusanu and Onea (2013) state that values for

organizational sustainment include the “care for employees, respect for others, honesty,

openness, and respect for fundamental human rights” (p. 705). Kohl’s understands this by

ensuring that communication is open and respects diverse perspectives, that their employees are

empowered and fully engaged through continuous developmental processes and recognized for

their positive efforts and individual successes (Kohl’s Ethics, 2020).

Drive Results

The fourth element of their approach to instilling values in the fabric of the organization

is to ensure that employees are always timely in their work while continuously being accountable

for their actions (Kohl’s Ethics, 2020). Employees are encouraged to ask questions to help with

making the right decisions and to go above and beyond what is expected to offer ideas and

suggestions to help the company become more successful.

Strengths, Weaknesses, Opportunities, and Threat (SWOT) Analysis

The SWOT analysis for Kohl’s is important for effective strategic management because it

helps an organization identify factors, internal that are within the organization, and external that

exist from outside the business, that can affect its success (Wheelen et al.,2015). The

environment for Kohl’s as a retailer is important to understand and involves an analysis of its

strengths, weaknesses, opportunities, and threats.

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Strengths

One of Kohl’s strengths is its omni-channel presence (Kohl’s Corporation, 2019). This

strategy is intended to reach multiple channels such as retail stores, internet shopping and access

via mobile devices such as smartphones (Kohl’s Corporation, 2019). This allows the company to

reach their customers in many ways which helps to provide an increase of sales and revenue

(Kushwaha and Shankar, 2013). Another strength that Kohl’s can benefit from is its exclusive

brand offerings which helps to mitigate any competition.

Weaknesses

One major weakness that Kohl’s has is its limited geographic presence due to a lack of

any global retail ventures unlike some of its competitors (Kohl’s Corporation, 2019).

Opportunities

Kohl’s can benefit from leveraging opportunities such as any increase in consumer

spending, growth in any of its clothing lines, and by an increase in online shopping (Kohl’s

Corporation, 2019). Through creative approaches of discounts for loyal shoppers it can hopefully

take advantage of the expected surge in shopping in a post COVID-19 era.

Another excellent opportunity for Kohl’s to reinforce its omni-channel presence is garner

a partnership with the Amazon Go program which will enhance the products by including a

bistro type offering so that its customers can relax while having a snack while shopping (Walton,

2020).

Threats

Like most retail firms it faces major threats from other like firms such as Target, Macy’s,

Nordstrom, Inc., and The Gap (Kohl’s Corporation, 2019). If Kohl’s continues to maintain its

exclusive brand offerings while continuing to add new brands it should be able to mitigate these

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threats. Another threat that the retailer faces is the level of employment due to COVID-19, but

once the threat of the virus subsides this unemployment threat can be turned into an opportunity.

Competition

As mentioned in the SWOT analysis competition is the main threat that Kohl’s faces on a

continuous basis. The retail clothing industry is an extremely competitive market and Kohl’s

omni-channel marketing approach helps to provide an avenue for them to maintain their

viability. Some of their top competitors are J. C. Penney Company, Inc., Macy’s, Inc., and Gap,

Inc.

J. C. Penney Company, Inc.

J. C. Penney offers a wide selection of clothing that is available in their retail outlets and

online. The company is in the process of a financial restructuring and is experiencing a dramatic

low in their stock price (OTC: US: JCPNQ) which closed at $0.28 September 17, 2010 (JCPNQ,

2020). The added impact of COVID-19 will certainly have a drastic effect on their ability to

compete and overcome their financial problems. This company is not a serious threat to Kohl’s.

Macy’s, Inc.

Macy’s touts itself as “America’s leading retail experience” (Macy’s, 2020). As an omni-

channel retailer their offering of discounts, online shopping, and large selection of brands makes

them a serious competitor for Kohl’s. Their stock (NYSE: M) closed on September 17, 2020 at

$6.86 compared to their 52-week high of $18.57 (Macy’s stock, 2020).

Gap, Inc.

The Gap retailer focuses on strictly clothing that is comprised of their own brand and

several other name-brands. As a competitor to Kohl’s while they offer in-store and online

shopping their limited brand-name products makes them a moderate competition threat. Unlike

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Kohl’s they also compete on a global scale which garners a larger retail base. Their stock

(NYSE: GPS) closed on September 17, 2020 at $16.90 (Gap, 2020).

Management and Leadership

Kohl’s leadership is headed by a diverse group of individuals that have extensive

experience in many areas that help to solidify the strategic management team consisting of the

following: chief executive officer (CEO), chief financial officer (CFO), chief merchandising

officer, chief technology officer (CTO), chief marketing officer (CMO), chief people officer

(CPO),and the chief strategy officer (CSO).

CEO

Michelle Gass, the CEO has been with the company in different capacities since 2013. She has

been instrumental in partnering with Amazon and Under Armour (Kohl’s, 2020).

CFO

The chief financial officer for Kohl’s is Jill Timm, and serves as the senior executive vice

president, has been with Kohl’s since 1999 having held several leadership roles during this time

(Kohl’s, 2020).

Chief Merchandising Officer

To support the operational facet of the company is the chief merchandising officer which

is Doug Howe. He joined Kohl’s in 2018 and previously had merchandising leadership roles

with companies such as QVC, Gap Inc., Walmart, and May department stores (Kohl’s, 2020).

CTO

The CTO for Kohl’s is Paul Gaffney and provides an important role in the development

and operation of the company’s technology which is important in today’s digital environment

(Kohl’s, 2020).

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CMO

Greg Revelle is the CMO and joined the company in 2017 with previous experience with

Best Buy, Expedia and as an investment banker at Credit Suisse (Kohl’s, 2020).

CPO

The CPO for Kohl’s is Marc Chini and plays a vital role ensuring that all the human

resource efforts are supportive of the company’s strategic initiatives (Kohl’s, 2020). The title

which refers to people vice human resources shows Kohl’s commitment to creating a value

centric environment.

CSO

Vivien Yeung helps to bring support for the company’s enterprise strategy to help Kohl’s

be successful and competitive in a competition rich environment (Kohl’s, 2020).

Financial Outlook

Kohl’s had an increased revenue trend for the past several years until 2019 (Kohl’s,

2020). Like many other retailers the impact of the COVID-19 virus along with the necessary

preventive practices put in place have limited customer’s ability to shop in person and in effect

resulting in less sales which decreased by 1.3% for 2019 (Kohl’s, 2020).

Kohl’s stock remains lower, but at a level that can recover in a post COVID-19

environment. It had a 52-week high of 59.28 and a low of 10.89 but seems to be maintaining a

presence around 23.4 (Kohl’s stock price, 2020). With Kohl’s omni-channel presence the

company realized a 10.4% growth during the previous three months which is good for the

company considering that the entire industry only realized a 3.8% growth for the same period

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(Zacks, 2020). Hopefully with the abatement of the COVID-19 pandemic the company will be

able to recover and return to pre-pandemic levels.

Strategies

Kohl’s strategy has its primary focus on providing value for the customer and ensuring

that everything results in a positive experience (Kohl’s purpose and values, 2020). The company

has created a greatness agenda for its strategic focus that includes a framework consisting of five

areas: “amazing product, incredible savings, easy experience, personalized connections and

winning teams” (Kohl’s purpose and values, 2020).

Amazing Product

Kohl’s has garnered many brands, national and exclusive to provide their customers a

great selection of quality merchandise. Many of the brands that are recognized nation-wide such

as Nike, Columbia, Hurley, Converse, Chaps, Levi’s, Carters, Nine West, Polo, and Calvin Klein

are seen by many customers as equating to quality and value.

Incredible Savings

Synonymous with value is cost savings and Kohl’s strategy with multiple customer

focused programs such as Kohl’s Cash where the customer receives a $10 coupon for every $50

spent helps the customer realize the value in shopping at Kohl’s. These can be used the same as

cash and are earned regardless of how the customer pays for their purchase (Kohl’s, 2020). Like

many other retailers Kohl’s also provides their own charge card that when used during certain

times can provide an additional discount on the purchase. The retailer also provides its Yes2You

Rewards program so that the customer earns one point for every dollar spent and once they have

earned 100 points can be used as a $5 reward on the purchase.

Easy Experience

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Kohl’s strategy to reach greatness includes a focus on the customer’s ability to easily

shop whether in the store or online. Providing a “seamless shopping experience” attests to the

focus on the customer as a part of the Kohl’s family (Kohl’s, 2020).

Personalized Connections

When you enter a Kohl’s store it is readily apparent that the employees meet each

customer with great care and are pleasant and ever helpful. Bringing a personal touch to the

interface between customer and employee helps to further the company’s goal towards greatness.

Winning Teams

Another element of the retailer’s strategy to reach greatness is with their employee

relationships. Kohl’s embrace of diversity and inclusion ensures that customers and employees

feel safe and secure in the Kohl’s environment and maximizes its efforts to instill their corporate

values and ethics throughout the company (Kohl’s, 2020).

Conclusion

Kohl’s has embarked on a serious and meaningful path with its strategic plan and well-

designed strategic management initiatives that will help it to continue its success and sustainment

into the future. Understanding that they are operating in a highly competitive environment their

planning efforts will help to mitigate any problems. They continually focus on providing the

customer value through affordable prices and cost saving programs, providing a wide selection

of quality merchandise, and including a continued focus on its social and corporate

responsibilities.

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