Sears Case Study

Topics: Retailing, Sears Holdings Corporation, Department store Pages: 8 (2388 words) Published: April 25, 2012
Executive Summary

Company Analysis
Sears is our nation’s fourth largest retailer. With over 4,000 stores in the United States and Canada, Sears has grown from its humble beginnings. Sears is a leader in apparel, home appliances, home, lawn and garden, tools, automotive repair, maintenance, and electronics. Sears also provides home service, serving 11 million service calls yearly. Richard Sears founded Sears as a mail order company and it grew to be one of the largest retailers. He opened the first department store in Chicago in 1925. Sears found success and by 1928 three more stores had opened. Now Sears employs 249,000 employees and it has grown quickly. In 2005, Sears merged with K-Mart and has helped both evolve and the merger proved to be both successful and positive. Although they have faced challenges along the way they have been able to gain a large market share because of their product mix, quality services, products, and solutions. No matter what difficulties they have faced Sears has been a leader in the retail industry and they will strive to be sure that doesn’t change. Sears has come a long way from its beginnings as a catalog. Sears has many unique attributes that make it a place that people want to shop. Despite their great accomplishment and striving to become one the largest and most competitive retailers, Sears is facing several key issues. Sears must reevaluate their internal and external environment in order to implement the changes and solutions necessary to get Sears back to where it needs to be.

Company Analysis

Organization and Leadership
Sears has an overall good practical structure. Here is the organizational structure of the company as of February 29, 2012. •CEO – Louis D’Ambrosio
Chairman of the Board – Edward Lampert
Director – Emily Scott, Thomas Tisch, Steven Mnuchin, William Kunkler, Ann Reese •CFO – Robert Schriesheim
Acting CFO – William Phelan
President – Robin Michel
Senior Vice President – William Harker
EVP Operating and Support Businesses – Scott Freidheim

Corporate Strategy
Sears has a great and widespread product line mix. They offer everything from apparel, shoes, automotive, appliances, home, maintenance, electronics, lawn and garden, tools, home service and more. This has definitely been key to their success because they are able to tailor their products to their customers needs using an integrated cost leadership/differentiation strategy. Sear is competing in a very competitive industry and if they follow through with their differentiated strategy they will continue to improve. Sears was able to pursue low cost and provide differentiation to their customers.

Corporate Financial Position
Sears financial position is currently improving. They are dealing with not only a let down on their fourth quarter losses but the sales have decreased as well in both their department stores and Kmart unit. To deal with their losses they are in the process of selling 11 stores to make up for their finances which has made their stocks go up at 19% (MarketWatch, 2012). If they sell these properties they could earn around $270 million in proceeds. It could go either way though since when sales decrease selling assets may not be the right way to bring in growth in the future. Also if they follow their plan of moving Sears Hometown and Outlet stores they could bring in between $400 million to $500 million of proceeds during the third fiscal quarter (SHLD: Nasdaq, 2012). Sears net income has dropped continually year after year from $235.0M to a mere $133.0m. One reason being is the percentage of sales has been more focused on the SGA (Sales General & Administration) costs which has made it go from 23.69% to 24.09% (SHLD:Nasdaq GS, 2012). Core Competency

The main core competency would have to be in there customer service. They offer great service to their customers which has gave them a competitive advantage...
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