Comprehensive Analysis of Staples

Comprehensive Analysis of Staples Harding University Angela Maloch Ashley Perez Keith Miller Ricky Griffin Abstract This paper will review Staples, Inc. comprehensively. The authors will discuss Staples’ visions, missions, and objectives, in addition to outlining the firm’s internal strengths and weaknesses and their external opportunities and threats. Several matrices will be included to provide visual aid and better observations of the operations and current practices of the company. Recommendations will be provided on new courses of action that may benefit the company and help increase sales and brand awareness.

Vision and Mission Staples, is the world’s largest office product organization, and a reliable source for office solutions. The company products and services include office supplies, copy and print supplies, and technology to support these products. Staples, also provides supplies for facilities, break-room, and furniture (Staples, Inc, 2012). Staples conceptualized the office superstore in 1986. It has more than 88,000 associates worldwide, in 26 countries, and fosters annual sales of 25 billion (Staples, Inc, 2012).

Many organizations foundations began with a vision and an organizational mission. The vision and mission are set to be accomplished by setting objectives, and implementing strategies to achieve the goals set by the organization. According to Business Improvement Architects: Creating a compelling vision and developing the strategies to achieve it is one of the organization’s most difficult challenges. The vision is more than a dream; it must convey a larger sense of organizational purpose, so that employees are able to picture themselves “building the dream company” rather than “laying the stones. It is an ambitious view of the future that everyone in the organization can believe in, one that can be realistically achieved, yet offers a future that is better in important ways than what now exists. (Business Improvement Architects, n. d. ) Staples mission is “to make it easy to buy office products (David, 2013). ” The mission is simple yet it encompasses what the organization strives to do with the products and services it provides to its customers throughout the world. Staples, does not have a written vision, but he the organization utilizes a unique approach in identifying the future direction of the company.

Staples Soul program is a program designed by Staples, Inc. to help make the organization an employer and neighbor of choice, and sets Staples brand apart from competitors. The program is also aimed at allowing Staples to grow profitably and responsibly (Staples, Inc, 2012). Objectives and Strategies In Staples 2011 Annual Report, Ron Sargent who serves as the organization’s Chairman of the Board and Chief Executive Officer stated: At Staples, we take great pride in our consistent execution and our ability to evolve and meet the changing needs of our customers.

Throughout our 25 year history we’ve succeeded by setting aggressive goals, acquiring and retaining customers, and being accountable for our performance. We took the same approach in 2011 and made progress on many of our key initiatives, despite the challenging economic environment. (Staples, Inc, 2012) Staples has established goals and objectives to keep the organization viable in the fast changing market, and the sluggish economy. The Staples Soul program, separates the organizations objectives into four pillars, and outlines the strategies to obtaining those objectives.

The four pillars of focus of the Staples Soul Program are community, ethics, diversity, and environment (Staples, Inc, 2012). Staples Community Objectives and Strategies Staples is dedicated to bring education, hope and opportunity to the communities of where their customers live. The community efforts are strategically approached through local grassroots programs, and large scale initiatives that build ties in the global community (Staples, Inc, 2012). Staples has donated more than $17 million to nonprofit organizations, in the United States, and around the world in 2011.

Through its Choose a Charity program, Staples has enabled associates to donate nearly $1. 9 million to organizations, in which they care about (Staples, Inc, 2012). Staples has also been established volunteer programs, and associate volunteer programs which has led to more than 33,000 hours of volunteer work to being performed in 26 countries (Staples, Inc, 2012). Staples and Ethics and Strategies Staples 2011 Annual report discusses their objective to meeting the ethical component of the organization.

The report states: We believe that doing right is just as important as doing well. We hold ourselves to the highest standards of honesty, fairness and integrity, and continually implement strategies to ensure ethical conduct from the boardroom to the supply chain to the store. Our strong ethical foundation, demonstrated in the daily relationships with our stakeholders, and ensures our continued success. (Staples, Inc, 2012) Staples stress the importance of ethics in the business organization. The good business ethics must p throughout the entire organization.

In efforts to achieve and maintain an ethical environment Staples has done the following: * Ethics, helpline, and training and awareness program in every business unit and function worldwide (Staples, Inc, 2012). * Established a new Ethics scorecard that allows senior leaders and the Audit Committee of the Board of Directors to monitor compliance with program requirements (Staples, Inc, 2012). * Created and established a monitoring and measurement framework to assess how well we are preventing, detecting and responding to ethics and compliance risks (Staples, Inc, 2012). Updated the Staples Suppliers Code of Conduct, by adding an Environmental and Business Ethics section, while modifying other sections (Staples, Inc, 2012). Staples, the Environment and Strategies Staples Annual Report focused on environment as its third organizational objective. The organization’s 2011 report states: At Staples, our vision is to generate business and environmental benefits for ourselves, our customers and our communities by leading the way in sustainable business practices. his vision through a continued focus on sourcing more sustainable products; improving our offering of recycling and other green services; maximizing our energy efficiency and renewable energy use; and eliminating waste. In 2011, we communicated several new global sustainability goals and continued to work in several program areas to help move us closer to our sustainability vision. (Staples, Inc, 2012) As mentioned before the environmental pillar of the Staples Soul programs is beneficial to the organization, the environment, the community and the customer.

Staples has been instrumental in environmental progress by: recycling more than 67 million ink and toner cartridges, and 13 million pounds of technology waste in the United States. Staples has continued the implementation of its Race to the Top Initiative, which is focused on key suppliers reducing the environmental impact of their product (Staples, Inc, 2012). At the end of 2011, Staples had 286 facilities in the U. S. that have received the ENERGY STAR® for buildings certification. By the close of 2011 Staples had 36 solar installations at 33 facilities and purchased a large sum of renewable energy certificates.

Staples has a goal of reducing operational electrical intensity by 25%, and global carbon emissions by 50% by 2020 from a 2010 baseline (Staples, Inc, 2012). Staples, Diversity and Objectives Staples believes that being a successful company is dependent on people with rich backgrounds and diverse views. Staples commitment to diversity and inclusion opens the doors for the people of different races, gender, nationality, sexual orientation, physical ability, background and thinking styles. This in turn allows the company to be more innovative, because the organizations associate base reflects the diversity of the customers.

Staples’ diverse workforce and suppliers help to build and enrich relationships with customers. While building upon these customer relationships, the organization is able to adapt to the ever changing global market place (Staples, Inc, 2012). Although Staples does not have a written vision statement, the Staples Soul Program has outlined the path, in which the organization wants to proceed over its business life. Fred R. David states: “A vision statement should answer the basic question, “What do we want to become? ” (David, 2013, p. 45) David also states that a comprehensive mission statement is formulated by a clear vision.

It is suggested that the vision statement be established first, and should be short approximately one sentence (David, 2013, p. 45). Many organizations have both a vision and a mission statement. David states that an organization’s mission statement distinguishes one organization from another in the same industry. An organization’s mission statement is “its reason for being. A mission statement is important for effectively establishing objectives and forming strategies (David, 2013, p. 45). It is important when formulating a vision and mission statement, it is important to include the managers and the employees.

When employees and managers work together to formulate the organizations vision and mission, the statements will reflect the personal visions that employees and managers alike feel passionate towards, and sets the foundation for the future. The shared vision leads to a common objective and can motivate employees and remove the mundane atmosphere in the work environment (David, 2013, p. 47). An organization’s vision and mission statement can: * Ensure unanimity of organizational purpose * Provide a standard for allocation of organizational resources * Establish organizational climate or general tone Serve as a focal point for people to identify with the organization’s purpose * To help translate objectives into a work structure assignments and task * To specify organizational purpose and translate those into organizational objectives (David, 2013, p. 48). The Staples Soul Program sets the tone for a vision statement for the organization. Staples vision statement could read: “Staples vision is to be a world leader in providing easy assessable office supplies while being committed to improvements in ethics, environment, community, and diversity for those we serve. The Staples mission as stated before states that the company’s mission is “to make it easy to buy office products. ” (David, 2013, p. 69) Staples mission and vision projected through its Staples Soul Program has set then foundation for the organizational to expand and utilize its strengths and opportunities to continue to be a leader in its industry. The organization can also utilize this foundation set to identify weaknesses, and potential industry threats. Eternal Opportunities and Threats External Opportunities Opportunities can give an organization an edge over the competition. Staples, Inc. isplays the potential to increase its growth in additional countries. Currently Staples has 300 stores internationally. An international expansion would increase the profits for the organization. According to David (2013) “Growth is forecast to reach almost $88 billion by 2013, reflecting a five-year average growth rate of less than 1 percent” (p. SM-66). The advancement in technology can provide Staples with a balanced diversity for its shoppers. New technological gadgets continue to bring additional efficiency for individuals in a number of ways such as online shopping, reading books, and playing games. Staples, Inc. artnered with Barnes and Noble to offer an alternate color reader commonly known as The NOOK. This technological device competes with Amazon’s Kindle and the Apple’s iPad. The partnership with Barnes and Noble will provide Staples with the opportunity to expand within the digital era. External Threats Threats are external and could occur at any time. Threats most often occur from other competing companies. Staples, Inc. continually competes with a number of organizations in regard to price competition and retail competition. Price competition occurs with equal ground stores such as Office Depot and OfficeMax. Staples, Inc. s the largest office supply company compared to Office Depot classified as the second place organization. David (2013) stated the following interesting fact, “Staples is larger than Office Depot and OfficeMax combined” (p. SM-76). The three organizations display similar challenges in regard to the reduction of sales because of businesses going paperless. The retail competition includes stores such as Wal-Mart, Kmart, and Target. These organizations display the need to obtain additional market share. As stated earlier, Staples, Inc. began the route of digital services with the latest product from Barnes and Noble commonly known as The NOOK.

With the consumer trend of digital services reduces the need for traditional supplies. Green initiatives continue to be another factor for the reduction of traditional supplies, which reduces the need to stock a lot of cases of copy paper in the distribution centers. Competitive Profile Matrix External Factors External Factor Evaluation Matrix (EFE) Key External Factors WeightRatingScore Opportunities International growth (only 300 stores overseas). 12 4. 48 Trends towards digital items. 12 4. 48 New partnerships (Barnes & Nobles). 11 3. 33 Implement research/development. 15 4. 60

Threats Price competition. 10 3. 30 Retail competition. 12 4. 48 Unemployment rates. 06 2. 12 Oil prices. 06 2. 12 New technologies reduce need for traditional supplies . 10 3. 30 Green’ initiatives might shift demand for products . 06 2. 12 Totals12. 04 The External Factor Evaluation Matrix (EFE) demonstrates how opportunities and threats may affect the company. Similar to the IFE, this gives a visual rating of the importance of external factors that may contribute to or inhibit the success of Staples. Seen in the matrix above, new opportunities can greatly contribute to the success of Staples.

With such broad expansion opportunities, it would be easy for Staples to make new connections overseas, whether in creating new locations or promoting online sales. New partnerships should be looked into as well. Staples has already teamed up with Barnes & Nobles, but opportunities with other major brands might impact Staples’ sales in a positive way as well. Implementing a research and development team can give Staples the opportunity to study consumer patterns, marketing techniques, and what products to offer to better meet the needs of society.

Competing companies that offer similar products are the greatest threat the Staples. To best combat this, Staples needs to be prepared to offer the best customer service and technologies to stay in the competition. New technologies are changing what consumers need in regards to office supplies. For example, most consumers have switched to computer filing, rather than paper filing. This reduces the need for so much paper, files, folders, and filing cabinets. While some may still need this, Staples may want to look at reducing their inventory of these items and offering a larger supply of more current and modern items.

Internal Strengths and Weaknesses Internal Strengths Strengths refer to the factors that exist within the company and exhibits formations of competitive advantage. The organization has dominance worldwide in more than 22,000 locations to include China, Australia, Germany, North America, and a number of other countries. Staples, Inc. is an established organization with a well developed infrastructure that offers business services such as supplies, technology, furniture, and office machines inside the stores as well as online. Staples, Inc. has a competitive advantage with the use of its online sales market.

Instead of keeping a large inventory, the majority of the retail store locations stock approximately 7,000 products. When customers do not find a particular item inside the store, he or she can receive next day service at the local store when ordering from Staples. com. This avenue provides customers the option to review over 30,000 products in approximately 125 distributions. When the customer orders a product, he or she can request to receive shipment at the local store, at work, or at a home address. This type of service provides convenience for Staples, Inc. shoppers. In addition, Staples, Inc. ade an investment in regard to its delivery system with a purchase of small fleet of electric trucks. The purpose of this investment was to improve the organization’s efficiency and cost minimization by reducing fuel cost by 75% compared to diesel trucks. Internal Weaknesses Weaknesses are the areas an organization needs to try to correct imperfections for improvement. Understanding potential weaknesses can help an organization to both manage and remove possible threats. In contrast to a limited inventory as strength, this concept can be a weakness in regard to customers not wanting to wait for a specific product.

Customers may go to a competitor to purchase the needed product or purchase it online. A number of challenges exist because of the advanced technological era. For instance, Staples, Inc. reported a seven percent decline in stock prices according to its 2010 Annual Report. Internal Factors Internal Factor Evaluation Matrix (IFE) Key Internal FactorsWeight RateScore Strengths Strong international growth and partners. 12 4. 48 Advertising and marketing. 12 4. 48 Strong Online sales market. 10 3. 30 Many convenient Locations. 10 3. 30 Staples Delivery System. 11 3. 33 Weaknesses Only 1. % increase in Sales (2010). 06 2. 12 Stock price fell 7% (2010). 06 2. 10 Poor executive compensation plans. 12 4. 48 Poor inventory management. 11 3. 33 No research/development Budget. 10 3. 30 Totals13. 19 As seen above, the Internal Factor Evaluation Matrix (IFE) is used to provide a numerical and visual score of key factors of the internal strengths and weaknesses. This gives management an idea of how to prioritize any issues that may be affecting or attributing the growth or success of the company. With more than 1500 locations throughout the United States, Staples is easily accessible to the population.

Their advertising and marketing campaigns are successful and catchy; this creates brand awareness, and can potentially bring in more consumers. The internal weaknesses have caused such financial stresses on the company that it is very important that these issues are addressed. For instance, in 2010, there was only a 1. 1% increase in sales and stock prices fell 7%; however, the CEO of Staples, Ron Sargent, took a 41% pay increase. Moves like this can set Staples up for failure, so it is important for management to be aware of these internal issues through the use of an IFE.

With no research and development budget, Staples is falling behind the trends of fast-paced society. They are not current on what is popular and what issues may be hurting their sales. * SWOT Analysis According to Thompson, Gamble, and Strickland (2006), “A SWOT analysis is a simple but powerful tool for sizing up a company’s resource capabilities and deficiencies, its market opportunities, and the external threats to its future well-being (Chap. 3, p. 85). A SWOT analysis is a significant portion of the strategic planning model.

An organization uses a SWOT analysis that consists of strengths as internal forces of the organization to accomplish the objective; weaknesses are internal forces of the organization that harm the objective; opportunities are external forces that can expand the organization; threats are external forces that can destroy the organization’s success. In developing a strategic plan, leaders must ask if the current strategic plan is adequate to achieve the goal and are there allowances for contingency plans if the current plan is not working.

Therefore, an effective strategy will consider the internal and external factors of the SWOT analysis by looking at the big picture of what an organization will face in the course of goal achievement. SWOT Matrix Space Matrix Current Strategies Inventory Staples is looking to reduce physical inventory in stores and offer a wider variety via Staples. com (Donoher as cited in David, 2013). In doing this, they can limit the size of store locations and be able to cut building costs, utilities and floor space on new locations.

In addition, research done by Shankar, Rangaswamy & Pusateri (1999) indicates that online shopping is more convenient than offline shopping and allows consumers to find products to best fit their needs. This strategy, once fully implemented may promote more business to the website and offer better selections. The only issue that may arise is not having an item in stock that competitors might have. It would helpful to research buying trends and patterns of this industry and keep those items stocked. Prices Low prices have been the ultimate focus of Staples.

This is understandable in retail today, however customer service and loyalty programs are just as desirable to consumers. Indicated by Shankar, Rangaswamy & Pusateri (1999), customers are not sensitive just to price increases, but rather a mixture of factors that contribute to the overall buying experience. Slightly raising prices and focusing more on customer service can produce a better experience for in-store shoppers and may encourage them to return. Also, in some cases, low prices can correlate with low quality.

When Staples offers their own brand items for extremely low prices, consumers may consider the price in relation to the quality. Recommended Strategies Based on the case study, Staples, Staples has seen gradually declining sales and profits in recent years (Donoher, as cited in David, 2013). In order to turn that around and be a successful office supply company, they need to implement new strategies. Staples is not a competitor with other office supply companies. They cannot maintain desirable inventories of what consumers are looking for and they cannot beat the prices and leverage that other similar stores offer.

If left alone, Staples will go out of business. Suggestions on strategies that may offer aid to Staples are outlined below. Retrenchment “Retrenchment occurs when an organization regroups through cost and asset reduction to reverse declining profits” (David, 2013, P. 146). If Staples would try this strategy, they might be able to save the company and turn it around. In order to implement this strategy, they would stop opening new stores, and perhaps even close stores throughout the United States. Closing stores throughout the United States can greatly reduce costs and increase revenues.

It would be most logical to close the locations with the lowest annual sales. In addition, by reducing the number of store openings would allow for more focus to be within what Staples already has. This means there would be more time to focus on customer service, inventory management, product display, management, and online sales. Online sales are such a large portion of their business, it may be more effective to put more efforts into obtaining sales through that medium, rather than brick and mortar locations. Related Diversification

In order to remain in the competition, Staples must be open to diversifying the products they currently offer. Staples needs to revamp their current inventory and look at what it is consumers want today. With such a boom in technology, there is a consumer desire for new and up-to-date items. The items they rarely sell need to be taken off the shelves or offer a very limited inventory in stores. That clears up space for new items, and a greater inventory capacity. By stocking items that customers want can increase the traffic flow through the store.

Often, consumers know competing stores, such as Office Depot and Wal-Mart have more of what they need, so Staples is eliminated completely. Recommended Annual Objectives and Policies Organizational Annual Business reports are a vital tool in making recommendations for annual objectives, and policies. The annual report identifies the company’s short falls, but more importantly it shines the light on the organizations achievements. The annual report also illustrates the plans and strategies to rectify its weaknesses, and refute potential threats.

According an article by Jill Leviticus, an annual report; “provide information on the health of your company to shareholders, stakeholders, the media and your community. ” (Leviticus, 2012) The article also states that the organizational annual report provides financial information, highlights achievements, promotes the organization, and other key information to the stakeholders (Leviticus, 2012). Staples 2011 Annual Business Report outlines the organization’s recommended annual objectives and policies, which is based on the needs of the employees, shareholders, and customers.

Annual Business Reports and meetings cover a broad range of objectives and policies. Staples 2011 Annual Business Report covered topics on beneficial of ownership of common stock, corporate governance, and election of directors, employee stock plans, and long-term cash plans (Staples, Inc, 2012). Adjustments to these specific objectives and policies will specifically impact the viability of Staples, Inc. The aforementioned Staples Soul Program has been instrumental in making the organization the “employer and neighbor of choice. ” (Staples, Inc, 2012) Staples has been proactive in implementing policies and objectives to acilitate the organization in achieving goals centered around the four pillars of the Staples Soul Program, which are community, ethics, diversity, and environment (Staples, Inc, 2012). Strategy Review and Evaluation Defining a strategy is an educated guess. The guess is a key process in any organization. The changes that occur in today’s society can make or break an organization. Strategy, as any other process improvement, cannot be determined unless it is measured. There is an old saying that says it is hard to know where you are going until you know where you have been.

Strategy has to be evaluated to determine if the direction of change is favorable or unfavorable to the organization. There are acronyms of famous cycles to help lead an organization to improve. PDCA, PDSA or DMAIC are some of the well-known cycles. These cycles define a basic process of evaluating changes made to determine if the actions taken reflect the desired results. A similar process of planning, doing, studying and acting has to be defined in each organization. Organizations can vary in the data used but the process will be the same. Data

There are a number of inputs that need to be included into strategy development. External inputs include items such as customer needs, customer survey results, industry trends, regulatory requirements, technological advancements, market risks and competitive intelligence to name a few. Internal inputs include company vision, mission, goals, philosophies, employee survey results, SWOT analysis and balanced scorecard results. These inputs will help determine what a company’s balanced scorecard should be. The balanced scorecard could be used by location moving up to the organizational level.

It could also translate down to specific goals and objectives for individual performance management. Measure Once the balanced scorecard has been developed then it is time to capture the results. In most cases these results are measured monthly. There are some cases where the time frame may extend to a longer period of time depending on the metric being measured. For instance, financial information would probably be calculated monthly by an internal team. An external assessment could be used to challenge or protect your company such as Sarbanes-Oxley audit. These measurements help determine direction.

Review Periodic reviews of balanced scorecard information are required to determine if the actions taken are effective or not effective. These reviews can occur at different time intervals. Changes or actions taken can immediately take effect or it could be a period of time before the change is realized. An example of immediate effect could be actions taken to reduce inventory levels. Depending on the action the company may see the results on the following month. An example of a longer term effect may be implementing an “open door” policy which involves a cultural change that may not be seen immediately.

A general understanding of the metric and the anticipated impact time should be rationalized during the review process. Adjustment Once the review has been analyzed actions should be taken to correct metrics that are not performing to the desired results. There are several methods of problem-solving that can be used to help work through the possible contributors of poor performance. The A3 process was derived by Toyota. The process is a collaborative problem-solving tool used to manage individual issues from beginning to end.

The A3 process identifies the team, the problem, the metrics used to measure the issue, potential causes, countermeasures to potential causes, responsible party assigned and results. The cycle starts again similar to the Plan, Do, Study and Act cycle mentioned earlier. Recommendation The recommendation for Staples is to have monthly reviews as well as annual reviews. The monthly reviews would consist of A3’s developed for each of the metrics. The A3’s would be reviewed to see how the countermeasures are impacting the metric. This type of review will help monitor performance in the short-term time frame.

Annual reviews should be conducted on the internal and external inputs and balanced scorecard results. The annual review would be designed to develop the strategic plan for the following year or longer. References Business Improvement Architects. (n. d. ). Understand the organization’s vision. Retrieved November 22, 2012, from www. bia. ca: http://www. bia. ca/vision. htm David, F. R. (2013). Strategic Managment: A Competitive Advantage Approach (14 ed. ). Upper Saddle River, New Jersey: Prentice Hall. Leviticus, J. (2012). What Is the Purpose of Company Annual Reports? Retrieved November 23, 2012, from www. smallbusiness. hron. com: http://smallbusiness. chron. com/purpose-company-annual-reports-57428. html Shankar, V; Rangaswamy, A. & Pusateri, M. (1999). The online medium and customer price sensitivity. Penn State School of Information Sciences and Technology. Staples, Inc. (2012, April). 2011 Annual Report. Retrieved November 22, 2012, from www. thomson. mobular. net: http://thomson. mobular. net/thomson/7/3218/4642/document_0/SPLS_2011AR. pdf Staples, Inc. (2012, November 14). Corporate Profile. Retrieved November 22, 2012, from www. staples. com: http://investor. staples. com/phoenix. zhtml? c=96244&p=irol-IRHome

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