Sears Core Competencies Examined
July 8, 2012
Sears Core Competencies Examined
All companies have core competencies that they use to differentiate their company, product, or service from the competition, Sears is no exception. Also, it is common for a company’s core competencies to change, as their industry progresses through phases and shifts its emphasis between product and process innovations (Regis University, 2011), Sears is no exception. Yet, when a company’s core competencies become misaligned and no longer supports their strategic intent the business is in danger of becoming obsolete (Regis University, 2011), as their customers no longer perceive the unique benefits the company has to offer, Sears is no exception. This paper will discuss Sears’s core competencies from inception to present and examine why this writer believes they are misaligned, and explain why Sears needs to go back to their roots and re-embrace innovation as a core competence before they no longer exist. Core Competencies Defined – General
Before I begin my examination of Sears’s core competencies it is necessary to ensure that the reader understands the general definition of ‘core competencies’. There are three requirements that must be met to quality as a core competence: 1) needs to be relatively unique to the company, 2) needs to be a perceived benefit, and 3) needs to be extendable to other products or services (Regis University, 2011). Core Competencies Defined - Relative to Service Industries
Further defining core competencies is necessary to ensure the reader understands ‘core competencies’ as they apply to service related industries. Service related industries are separate by two key factors: 1) whether the work is routine or knowledge intensive, or 2) whether the work is accomplished with integrated or decoupled processes (Regis University, 2011, p. 1). The result is four broad categories of service industries: 1) service factories, 2) service stores, 3) service shops, and 4) service complexes (Regis University, 2011, p. 1). Sears – Service Store
Sears by the aforementioned definition is considered a service store, because the work is routine, and as a result performance can be best improved by three competencies: 1) tangible cost, 2) reliability, and 3) responsiveness (Regis University, 2011, p. 1). So simply stated core competencies are the knowledge, process, and/ or service that the company does better than anyone else and which sets them apart from the competition (Regis University, 2011, p. 1). Core competencies matter to an organization because they support the company’s strategic intent, and all business units within the organization draw from it.
Sears’s History – Core Competencies
A brief background summary for each major event in Sears’ history from its inception to its retail presence today is necessary to allow the reader to understand the progression of the company’s core competencies relative to its industry and phase of innovation, as denoted by the Abernathy and Utterback Innovation Life Cycle Model (Abernathy – Utterback Model). The beginning, R. W. Sears Watch Company, which later would become Sears Roebuck and Company, or simply Sears, began in the late 1880s, when there were only 38 states and the total population was 58 million, with over half the population living in rural areas (Sears Archive, 2012, figure 38, 58). However, the real story of Sears begins in the 1890s when farmers who were trading in their crops for cash were being charged a 100 percent markup for retail merchandise at the local general stores (Sears Archive, 2012). Richard Sears seeing an opportunity to meet the needs of the farmers began the direct mail order business that would be Sears’s core competence for years to come. Sears was a pioneer in direct mail order, and their early years began the fluid phase of the service store industry, according to the Abernathy -...