Bradley Caudill, Kristi Meier, Brianna Smith, Danielle Topper

Prior to StaplesFragmented industry in 1985

No store existed like Staples

Regular stores sold office supplies

Manufacturers made different supplies

Larger retailers obtained heavy discounts on office supplies

Smaller retailers obtained minimal discounts, if any

New technology being introduced to American businesses

Founding of StaplesTom Stemberg, 36-year old

retailer

Wanted to create office supplies supermarket

Wide variety

Warehouse type building

Deep discounted items

Grocery stores & Toys “R” Us used for his idea

Founding of StaplesStaples’ target market - small businesses

Basic value proposition - guarantee lower prices, especially to small businesses

Staples was a unique name - their own brand

Wanted manufacturers/wholesalers to deliver straight to Staples

Keep inventory and costs low

Raised issues with prior relationships with other companies

Founding of Staples (Cont’)Keep track of individual item’s profitability

No other business did this at the time

List price and Staples’ price listed on receipts

Show customers how much they were saving

First store - opened in Brighton, Massachusetts on May 1st, 1996

How They SucceededMany copiers and competitors in

industry after Staples establishment

Price wars ensued

Many imitators were filing for bankruptcy

Staples stores 35% smaller than Office Depot

Top three companies at time - Staples, Office Depot, OfficeMax

Possible merger with Office Depot failed in 1977

Federal Trade Commission stopped merger from taking place

Worked out in Staples favor

SWOT Analysis Strengths Weaknesses

➔ Strong customer focus

➔ Efficient inventory management

➔ Provide training to staff

➔ Sell products at a low price

➔ Providing a wide range

➔ Skillful management team

➔ Slow in entering the markets (smaller towns)

➔ Failed to focus on customer needs (During price war)

➔ Information system is not sufficient

SWOT Analysis (Cont’) Opportunities

➔ Cheap real estate in small towns

➔ Growing of industry demand

➔ Focus on differentiation from other companies

➔ Expansion to the BRIC-countries

Threats

➔ Low customer switching cost

➔ Low industry entry barriers

➔ Highly competitive industry and market

➔ Fragmented industry structure

➔ Concept store easy to replicate

➔ Expensive real estate in city

Class DiscussionBased off of the SWOT analysis, in your groups discuss what recommendations you guys can come up with?

Basic Financial InformationSector: Consumer cyclical

Industry: Specialty retail

Market Cap: $7.3B

Beta: 1.53 (Industry Avg = .95)

Correlation Coefficient (with S&P500): -.0083

52 wk range = 8.04-16.84

BBB- morningstar credit rating

Current price (4/13): $11.25

Update SectionFebruary 2002, Ron Sargent became CEO

Tom Stemberg stepped down to become chairman

With the new CEO,

Staples slowed expansion & Product line rationalized

From 2003-2006, staples refocused on attaining profitable growth

2008-2009 global financial crisis

Staples continued to be the strongest of the big three office supplier retailers

Staples, Office Depot, Office Max

Staples Today1,907 retail stores, 104 distribution and fulfillment centers

United States and internationally

Competitors Office Depot, Essendant, Amazon

Looking to merge with Office Depot

Social Media Features

Collaboration with WorkBar

ReferencesHill, C. W. & Jones, G. R. (2013). Strategic Management: An Integrated Approach

(10th ed.). Mason: South-Western.

“Welcome to Financials.morningstar.com.” Welcome to

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“Yahoo Finance-Business Finance, Stock Market, Quotes, News.” Yahoo Finance.

N.p., n.d. Web. 14 Apr. 2016.