On January 22, 2002, Kmart filed for Chapter 11 bankruptcy protection, becoming the largest retailer to do so in U.S. history. Most industry analysts attributed the immediate cause of the company's bankruptcy filing to a boring holiday season and stiff competition from WalMart and Target as the chain's fundamental problem. But competition wasn't the root cause of Kmart's consistently poor performance. The real reason for Kmart's poor performance is that Kmart has never had a marketing strategy. Kmart completely misunderstood their market and positioned themselves in the wrong direction. Furthermore, from a strategic point of view, there is the question of the location of the shops. Overall Kmart stores do not appear to be as well located as competitor stores. Then there was the question of technology. While Wal-Mart was becoming the unstoppable efficiency engine we know today by investing in technology and streamlining its supply chain, Kmart held back. While Wal-Mart developed an infrastructure that allowed it to lower prices, Kmart found itself at a price disadvantage. This article discusses these strategic issues that led to Kmart's poor performance. The first Kmart store opened in Garden City, Michigan, in 1962 (the same year Wal-Mart and Target began operations) by S.S. Kresge Co., a five-and-dime chain founded in the early 20th century in Detroit by Sebastian Spering Kresge. By the end of 1963 Kmart had converted 63 stores from Kresge's. By 1977, Kmart generated nearly all of Kresge's sales, and the company changed its name to Kmart Corp. Kmart sold the remaining Kresge stores in 1987. Kmart's biggest problems stem from its poor branding strategy and negative image among consumers. In 1965 Kmart introduced the technique that would become its trademark: the "Blue Light Special". Shoppers in a Kmart would hear the words, "Attention Kmart shoppers." Somewhere in the store a blue light would start flashing. From all over the store, shoppers rushed to the Blue Light area to get special discount prices, usually on sale merchandise. The limited-time sales strategy gave Kmart an identity. In 1991, Kmart discontinued the Blue Light Special, saying it had become too campy. In fact, it was Kmart's dirty, scruffy stores that generated that reputation. Kmart had a chance to revive the BlueLight in 2001. That concept was so powerful that ten years later, when the concept was reintroduced (too late), nearly two-thirds of Americans recognized the Blue Light Special and associated it with Kmart..