Staples Case Study

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  • Topic: Revenue, Office supplies, Financial ratio
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Staples – 2011

Forest David

A.Case Abstract

Staples is a comprehensive strategic management case that includes the company’s year-end 2010 financial statements, organizational chart, competitor information and more. The case time setting is the year 2011. Sufficient internal and external data are provided to enable students to evaluate current strategies and recommend a three-year strategic plan for the company. Headquartered in Framingham, Massachusetts, Staples’s common stock is publicly traded under the ticker symbol SPLS.

Staples is the #1 office supply superstore operator in the US. selling office products, furniture, computers, and other supplies through its chain of some 2,280 Staples and Staples Express stores in the Americas, Europe, Asia, and Australia. Most (about 1,900) of its superstores are located in North America. In addition to retail outlets, Staples sells office products via the Internet, its catalog, and its direct sales operations, including subsidiary Quill Corporation. Staples also provides document management and copying services through its retail chain, as well as promotional products. Staples also targets customers worldwide through its Corporate Express business (acquired in 2008). Staples pioneered the office superstore concept in 1986 and now has annual sales of $25 billion, ranking second in the world in eCommerce sales. With 90,000 associates worldwide, Staples operates in 26 countries.

B.Vision Statement (proposed)

To become the world’s largest office retail store.

C.Mission Statement (actual)

"Staples Soul reflects our commitment to corporate responsibility (8). It's a holistic approach to business that recognizes the close connection between our financial success (5) and our desire to make a positive impact on our associates (9), communities, and the planet (3) by joining together the following areas: diversity, the environment, our community, and ethics (6). It's how we do business—that's Staples Soul.

(proposed)

At Staples our mission is to be the total office products and solutions provider (2) for small business, home offices and consumers (1) by providing a broad mix of merchandise and services (4) at everyday low prices in an atmosphere of enthusiastic and knowledgeable sales force (5,7) worldwide (3). By joining together the following areas: sound business, diversity, the environment, our community, and ethics (6,9) we strive to be a good corporate citizen (8) while maximizing shareholder value.

1. Customers

2. Products or services

3. Markets

4. Technology

5. Concern for survival, growth, and profitability

6. Philosophy

7. Self-concept

8. Concern for public image

9. Concern for employee

D.External Audit

Opportunities

1. Office supply sales to increase 5% as the economy improves. 2. Office products industry sales expected to increase 13%. 3. Many smaller competitors are in weak financial positions. 4. Low borrowing rates and negotiable payback terms.

5. Gift card popularity increase of 7.3% in specialty retail during 2009.

6. Online sales increasing faster than traditional retail sales.

7. World economy is slowly on a rebound.

8. "Emerging economies" have accounted for nearly 70% of world growth in the last five years.

9. Value of the USD decreasing by .07 in long-term over the last five years against the EUR.

10. OfficeMax reported negative net income in 2008 and 2009 with marginally positive net income in 2010.

Threats

1. Consumers preference for environmental friendly products and paperless society. 2. Technological problems impacting foreign operations causing production to decrease by 6%. 3. Increase in U.S minimum wage (75% of Staples profit comes from the U.S.). 4. Hesitance of banks to lend affects Staples’ expansion plans. 5....
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