Staple

Staples, the world’s largest office products company, is committed to making it easy for customers to buy a wide range of office products, including supplies, technology, furniture, and business services. With $27 billion in sales, Staples serves businesses of all sizes and consumers in 27 countries throughout North and South America, Europe, Asia and Australia. Today, we will focus on itsrevising the strategy when Ronald sergeant assumed the reins of the company. At that time, although staples had significantly more stores than its two major competitors—office depot and office max, it tailed office depot in sales revenue.
And its return on net assets (RONA) was below its weighted average cost of capital (WACC), it just suggested that the company’s marking behaviors might do harm tocreate value or even destroy it. So the company had to improve its profitability and adjust its strategy.
(1) Adjustment
An individual firm’s success depends not only on how well it performs, but also on how well its entire supply chain and marketing channel competes with competitors. And company’s channel decisions directly affect every other marketing decision. So the most important thing thatstaples should do is to redesign the channels.
1. indirect marketing channel--adjustment on store distribution
At the very beginning, company’s basic strategic assumptions is to build a store with lots of inventory and the lowest prices in town and customers will beat a path to your door. We think this kind of concept is a little unilateral. In fact, staples ran its stores in types of warehousesand it is important for a company to decide on how many and what types of warehouses it needs and where they wait to be sold. The company should take many factors into account, such as the cost, the profit and the customer services. Since the more stores did not bring more benefits and the revenue per store was well below office depot’s, the company slow the store expansion and closed 32under-performing stores. This measure will help the company to control its warehouses and reduce the extra cost. Moreover, most of the new stores would be open in existing markets rather than new market areas. It would be much easier to extend the company’s sale range and operate the stores efficiencies in existing markets than in new markets. The company could increase its market occupation and make itsproduct more available to the customers to achieve the intensive distribution. To some extent, it could also prevent the competitors to race to seize the customer share.
Secondly, staples had noticed the importance of the inventory management. The managers must maintain the delicate balance between carrying too little inventory and carrying too much. And it directly affects customer satisfaction.For staples, the problem is the too much inventory. They sold all sorts of products rather than provide goods that the customers mostly wanted. It resulted in higher-than-necessary inventory-carrying costs and stock obsolescence. Furthermore, the customers indicated that they did not like the warehouse look. So staples removed many items that it found were not necessary and made it more convenientfor the customers to choose the items. This action turned the “warehouse” into real stores. The company changed its style of stores and increased the use rate of the space according to the customers’ preference. It will made an effect on making value, increase sales and maintaining profitable customer relationship.
The store channel mainly focuses on the dispersive customers and smallbusiness. They can easily gain what they want from the plenty of stores which are largely distributed over the city. And the company offered a way for customers to get the information of the new products.
2. direct marketing channel—company’s internet, catalog, and corporate contracts operation
As a second part of his strategy, sergeant turned to what the company calls its “North American Delivery”...