Sears_ Roebuck and Company by dffhrtcv3


									Sears, Roebuck and Company

      Situational Analysis
                Situational Analysis
 An assessment of the current situation in the retail industry
  and Sear’s operation in general.
 Areas of assessment
   – Analysis of Current Situation
          Market Situation
          Competitive Situation
          Marcoenvirnomental Situation
          Past Product Performance
   – Key Issues
          Threats
          Opportunities
          Strengths
          Weaknesses
   Analysis of Current Situation
 Market Situation
      The total market capitalization for Retail (Department &
       Discount) is substantial, amounting to about $341 billion.
      Softlines, specifically home furnishings, are growing in
       popularity, due to increase do-it-yourself television shows like
       Trading Spaces.
      Sear’s total share of the market place is 3% compared to Wal-
       Mart’s market share of 68%.
      Sear’s has been around for 117 years and has strong brand
       name loyalty, however, strong competition from non-mall based
       discount retailers have eroded their market share in all product
       areas, specifically in the clothing products.
      Sear’s consumer’s have a negative perception of their shopping
       experience; malls, parking lots and cramped aisles.
   Analysis of Current Situation
 Competitive Situation
      Sear’s home appliances and hardware market share is strong
       but will continue to take a hit as Home Depot and Lowe’s
       continue to eat up market shares in the market place.
      Sear’s clothing line will continue to be flat until they can catch
       up to the marketing strategies of Target and Kohl’s.
      Sear’s will continue to have pressure from higher quality stores,
       such as Wal-Mart and Target and pressure from lower price
       stores, such as Kohl’s.
      Sear’s diverse product line allows them to compete in all areas
       of the market place however concentration in some key
       products, like clothing, needs to be addressed immediately.
   Analysis of Current Sitaution
 Macroenvirnomental Situaiton
     The current state of the economy, which is stagnant,
      has put pressure on Sear’s net sales, as consumers
      are being more frugal with their spending.
     Increasing number of women are tackling the tasks
      of home renovation and home decorating increases
      sale potential of tools and home appliance.
     Sear’s full-line stores are attractive to the time
      crunched consumer which is attracted to a shopping
      environment where they can buy everything they
      need in one stop.
   Analysis of Current Situation
 Past Product Performance
      While net revenue has increased in the last year for Sear’s,
       sales volume has continued to decrease due to non mall-based
       discount retailers competing against Sear’s.
      Profit Margin for Sear’s has increased even more than net
       revenue due to the downsizing of the employee force lowering
       operating costs for Sear’s.
      Sear’s clothing line slump has continued due to less than
       effective market campaigns, however, Sears has consolidated
       there clothing line brand in order to create a brand name. Also,
       Sear’s has purchased Land’s End in hopes of taking advantage
       their customer base.
                     Key Issues
 Threats
      Lack of growth in all product lines, including their number one
       brand name product, Craftsman. This trend must be a top
       concern for Sear’s executives
      Lack of recognition in the market place in regards to their
       clothing line.
      Sear’s is behind in the industry strategy of Supply Chain
      The inventory turnover of 8x is a threat to the company’s bottom
      Consumer’s negative perceptions of hassles with shopping at
                  Key Issues
 Opportunities
     The acquisition of Land’s End shows hopes for
      increase sales volume in Sear’s clothing line.
     Trends in the growth of the home furnishing market
      suggest that Sear’s brand name loyalty with
      Kenmore and Craftsman can potentially increase
                 Key Issues
 Weaknesses
     Previous attempts to penetrate market share have
     Previous attempts to increase sales in their clothing
      line have failed.
     Store floor plans are out of date and consumers have
      a negative perception of shopping because they feel
      lost and cramped while shopping.
     Mall based stores becoming a thing of the past
                     Key Issues
 Strengths
      117 years of experience in the market place.
      Number of stores across the market place is high.
      Brand loyalty built over the years: Craftsman, Kenmore, Land’s
       End, DieHard and Covington.
      Strong market share in home appliances.
      Being a “follower” in implementing an effective Supply Chain
       strategy will allow Sear’s a higher chance of implementing the
       strategy correctly because they will have access to better
       technology and access to “what not to do” when implementing
       the strategy.

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