Once the initial dock defense is successful, you'll receive the objective to pursue and destroy the Kraken. Gather all your Murmillos and Arkantos. Head north-east along the coastline. Your Oracle Scout should continue to lead the way, revealing any enemy units or structures. You'll encounter small groups of enemy units, likely other Myth Units or human soldiers, guarding the path. Engage them carefully, using Arkantos's special abilities if available. The Kraken itself will be found further along the coast, possibly near a small enemy encampment.
When you engage the Kraken, focus all your units' fire on it. It has a large health pool and can deal significant damage. If you have any ranged units (unlikely at this stage but keep in mind for future missions), use them to attack from a distance. Keep Arkantos in the fight, as he is a powerful hero unit. If your Murmillos start taking heavy damage, consider using a 'hit and run' tactic, retreating briefly to allow health regeneration if possible, or simply focusing fire to eliminate the threat quickly. Destroying the Kraken completes the mission and advances the story.