Staples, Inc. has been leading the market in office products and services since its fruition in 1986. They are well-known for their wide range of brand name and private label goods that they sell to both ultimate consumers and small to mid-sized businesses. Through their various retail channels, including physical stores, mail order retailing, and e-commerce websites, Staples has been able to reach prospective markets in over 41 countries. (MarketLine Advantage, 2015) Staples has primarily centered its operations in the North American markets, with over 1800 stores over Canada and the United States. The company’s product list consist of numerous office supplies, appliances, laptops, phones, cameras, computer software, and other various items. Additionally, Staples offers services like promotional products, cloud software, technology trade-in, design & shipping services, and textbook rental.
Staples divisional structure is segmented in to three departments: North American stores and online, North American commercial, and international operations. (MarketLine Advantage, 2015) Each branch is geared towards the end consumer including: small businesses, mid-sized businesses with 20 to 500 employees, and the international consumer, respectively, and all represent the fundamental mechanisms of Staples business model. Furthermore, by being able to address a variety of different customer groups, Staples has been able to vastly improve its brand awareness and expand its opportunities into formerly untapped markets. Staples also owns Quill.com, an internet and catalog business that serves businesses in the healthcare field, and Corporate Express, a contracting company that provides office and breakroom supplies to businesses. (MarketLine Advantage, 2015)
“We are committed to providing superior value to our customers through a broad selection of products, easy-to-use websites and mobile platforms, an integrated retail & online shopping experience and a wide range of copy and print and technology services [while making a positive impact to our associates, communities and the planet” – (SEC, 2015)
Campbell’s mission statement analysis:
1. Does the statement describe an inspiring purpose that avoids playing to the selfish interests of the stakeholders? Staples focuses on offering customers with a variety of products to fulfill customers’ needs while having a sustainable approach to the environment.
2. Does the statement describe the company’s responsibility to its stakeholders? Staples doesn’t describe the company’s responsibilities regarding stakeholders, but it does state wanting to make a positive impact on their associates, communities and the planet.
3. Does the statement define a business domain and explain why it is attractive? Staples offers a wide variety of products through many channels for their customers and conveniently allows customers to shop for all their needs.
4. Does the statement describe the strategic positioning that the company prefers in a way that helps to identify the sort of competitive advantage it will look for? Staples mission statement is more customer oriented instead of strategic focused.
5. Does the statement identify values that link with the organization’s purpose and act as beliefs with which employees can feel proud? Staples offers superior value to their customers by offering a broad variety of products. Employees can feel proud in helping customers and adding value to their shopping experience with customer service.
6. Do the values resonate with and reinforce the organization’s strategy? Staples values are focused on making the customer experience great, which will help their organization achieve their strategic strategy.
7. Does the statement describe important behavior standards that serve as beacons of the strategy and the values? Staples implied mission statement doesn’t specify behavior standards, but would like to make a positive impact to the society.
8. Are the behavior standards described in a way that enables individual employees to judge whether they are behaving correctly? Staples doesn’t have behavior standards listed in their mission statement.
9. Does the statement give a portrait of the company, capturing the culture of the organization? Staples captures customers through convenience shopping and great customer service.
10. Is the statement easy to read? Staples implied mission statement is easy to read and allows the public to recognize what Staples sells and how they focus on customers.
After evaluating Staples implied mission statement we found that it needs some improvement. Staples implied mission statement does state their purpose and what they offer, but lacks their market position and also the responsibilities they have as a company. We used Campbell’s mission analysis to support our findings that Staples needs to improve their mission statement. Staples scored eleven points, which equates to needing some improvement. We found Staples implied mission statement on their 10k posted on the SEC website and conclude it relates to their business activities the most.
- “Continuing to improve the service and value offered to customers in a highly competitive industry, by expanding our assortment in categories beyond office supplies, accelerating growth in our delivery businesses, and building momentum in our multichannel Copy & Print business.” (SEC, 2015)
- Since office supplies are fairly low-involvement products with many substitutes while the industry has numerous competitors, brand equity and awareness is crucial if Staples would like to remain profitable. With a distribution network that offers next day delivery to most of its customers, it’s prevalent that they are trying to keep up logistically, but are trying to possibly improve to same day delivery. (MarketLine Advantage, 2015) As for their copy and print division, Staples is likely trying to maintain and improve market share among competitors like FedEx and UPS Print & Ship Centers. Additionally, with the recent agreement with MakerBot 3D Printers, 3D printers have been made available in two of Staples’s flagship stores, which may derive revenues from newer niche markets if added to more stores. (Brustein, 2014)
- “Focusing on improving productivity by reducing their retail footprint and aggressively reducing cost across all establishments.” (Tierney, 2015)
- Staples has been undertaking cost control initiatives with the focus that it will reshape its business model. This was started in 2012 when the company made a plan to achieve $250 million in pre-tax expenditures by 2015, resulting in Staples reducing its retail square footages in both Europe and North America by 15%. This, in theory, will significantly reduce the operating costs, improve operational efficiency, and the savings can be used on debt reduction or capital investments. (MarketLine Advantage, 2015)
- “Improving the website design and speed, increasing the relevance of their search function, and speeding up the checkout process on the website.” (Tierney, 2015)
- As ecommerce becomes one of the biggest and cost-effective markets to get into, it would be advisable that Staples continue to improve its website to keep relevancy amongst its customer base, since competitors like Amazon.com or Wal-Mart can be easy alternatives to buy from.
- Well-established throughout various retail channels that reach both businesses and ultimate consumers.
- Since the market for office supplies is highly differentiated and broad, Staples has gone through great lengths to reach more of its market in both their business-to-business and business-to-consumer sectors. Through their various distribution channels (retail stores, contracting, catalogs, & online marketplace), Staples has been able to uniquely tailor its business model to offer customized solutions and necessary products to its customer base. (MarketLine Advantage, 2015) Furthermore, with the creation of Staples print services to further immerse itself into all faucets of the business environment, Staples has made created a dynamic to be the one-stop-shop for all their customers business’s needs.
- Comprehensive portfolio of products and services.
- Staples has continually been adding product lines and different services to their storefronts since early 2014. To add value to their brand and their customer experience, Staples has expanded into over eight new categories: facilities & break room supplies; maintenance, repair & operations items; mail & shipping supplies; retail items for small businesses; storage solutions; organization accessories; and early educational toys/learning aids. (MarketLine Advantage, 2015) This is in the hopes that Staples can gain more share in a market that was formerly reserved for wholesale officer suppliers, while reaching out to an overall larger customer base. Additionally, increasing the product assortment from 100,000 products to over 1,000,000 on the Staples website has driven 8% of sales growth for the platform. (Staples, Inc., 2014)
- Early advocate of prospective 3D printers and services markets.
- The 3D printing and services market has slowly been making its way into the mainstream, which Staples has been preemptively establishing itself in the industry through its Copy & Print and In-Store departments. By offering a new platform that allows customers to send 3D files to stores and design completely customizable products through interactive 3D printer kiosks in-store. (Wolf, 2015) This has given Staples the competitive advantage of being the first major U.S. retailers to sell 3D printers and services.
- Reliance on third-party vendors for products.
- Since Staples bases its retail model on offering a wide range of products and services, they are required to offer well-known product lines and off-brands that adhere to customer needs. This has resulted in Staples possibly having little to no control over their supply, product design, price, or functionality of certain product lines, and thus facing the risk in the disruption of sales from said lines. (MarketLine Advantage, 2015)
- Involvement in various legal proceedings can lead to a decline in operational and financial performance.
- Staples has been locked in litigation with various third parties over topics such as licensing, labor regulations, and ‘wage and hour’ class action lawsuits that may adversely affect the firm’s reputation. (SEC, 2015) This has led to a significant amount of time and costs put forth in order to defend the operational well-being of the Staples brand, although the inherent unpredictability of legal proceedings can lead to further substantial costs.
- Heavily dependent on North American commercial and consumer markets.
- With over 83% of 2014 revenues coming from North American commercial and consumer segments, it is apparent that if some unseen economic circumstance were to arise in those markets, Staples could be heavily affected. (Staples, Inc., 2014) This could also affect the chances of implementation of further programs or diversification into other prospective markets.
- Overall increase in sales over the online retail sector.
- According to the US Department of Commerce, the online retail sales have increased at a CAGR of roughly 15.5% over the past five years, and represented over $305.1 billion in 2014 (MarketLine Advantage, 2014). By 2019, it is forecasted that the online retail sector will grow 88.3% to the value of over $574.5 billion. Additionally, the US accounts for nearly 31% of global online retail sales.
- Private brands in the US are growing in popularity over most consumer segments.
- Consumers have increasing been receptive to generic or privately-branded product lines that are serve as a cheaper alternative to more well-known brands. In accordance with industry sources, store brand sales have passed national brands by 2% in 2013 due to the increased acceptance of private-brand products, which can have a beneficial impression on Staples overall margin. (MarketLine Advantage, 2015)
- Possible acquisition of Office Depot may help consolidate market share.
- There has been negotiations between Staples, Office Depot, and the Federal Trade Commission for a $6.3 billion dollar combination of the two office product giants, which if approved, would significantly increase Staples market share in the office supplies industry. (McConnell, 2015) This would also ensure barriers to entry for new firms as well, since newcomers would be undercut by Staples economy to scope and scale, preventing them from efficiently matching Staples as competitors.
- Declining use of paper products in offices.
- With the recent trend of ‘going green’, more companies have been taking measures to reduce the amount of paper being used in their offices. These measures take the form of emails, printing on both sides of the sheet, or conveying messages through other communication vehicles. The decreased amount of paper being consumed could possibly affect revenue outlets in Staples assortment of paper and paper-related products. (MarketLine Advantage, 2015)
- Various competitors in the office supplies industry.
- Staples has to compete with numerous brick-and-mortar and ecommerce retailers, which makes the industry highly competitive and forces Staples to maintain a market presence in order to keep relevancy. (MarketLine Advantage, 2015) With newer companies such as Amazon.com and other discount retailers slowly encroaching on the industry with highly efficient methods to reach their customers, Staples will have to combat them aggressively to make sure they do not decrease in market share.
- The transitional trend from traditional brick-and-mortar retailers to ecommerce retailers will impact Staples significantly.
- As more companies come into the industry through various means, it is apparent that having a point of differentiation through a core competency is essential to maintain a presence in the market. For Staples, the focus has primarily been curbing cost through downsizing and relocating their stores to more efficient formats, while heavily investing in improving their ecommerce capabilities. (Staples, Inc., 2014) By eliminating the cost while still driving sales through alternative platforms (e.g. staples.com, Staples Advantage), it is possible to offset their meandering sales at their brick-and-mortar stores. Additionally, optimization/consolidation of Staples two mobile applications should highly be considered in order to provide another revenue center and procurement model for their customers.
- With the consolidation of print companies such as FedEx/Kinkos, it is apparent that Staples needs to differentiate from competitors if they want to maintain market share.
- The purchase of unique printer brands such as MakerBot and PNI Digital Media may prove to be a prosperous niche market for 3D printing and software that other companies like FedEx Print do not possess. With single-digit store sales growth and double-digit online sales growth in their copy and print department in 2014, substantial revenues have been generated, and paired with product line expansion, Staples may improve their position in the copy/print industry. (Staples, Inc., 2014)
- The acquisition of Office Depot will directly compete with Staples and possibly lose sales.
- Acquiring Office Depot will raise concern about the direct competition and potential losses for Staples. Staples plan to shut down a lot of Office Depot locations and focus more on their web based customers, will be problematic and may result in losing loyal customers instead of gaining more customers to buy at Staples.
SALIENT STRATEGIC CONCERN:
With the acquisition of unique technologies, a relative market share in the print/copy industry, and the competitive pressures of other companies, Staples should pursue an implementation of programs that will improve their position in the print/copy market through their website and physical stores.
In order to create more consumer-involved products, crowd-sourcing products by holding 3D printing contest at Staples flagship stores where customers send in their 3D designs and the winner gets copy of their design and a cash prize. This can be used to create and distribute new products throughout other Staples establishments.
- Consumer-created products would reduce the amount of product research and development needed, since consumer involvement primarily is the main driver behind creating new products and reducing overall R&D costs.
- Can lead to Staples products line extensions for relatively cost-effective measures, while giving them the possibility of gaining exclusive product and distribution rights.
- Develops a cross-platform for Staples physicals establishments and the company website, since consumers will submit their designs online, but the contest results will be held at the flagship stores in Los Angeles and New York.
- It is slightly unethical, since Staples would be deriving revenues from customers’ ideas, and tailoring the product to the overall consumer taste. This may result in consumer backlash and litigation, but can be combated by offering concessions such as product royalties to the winner.
- There is a chance that the contest may not catch on, due to lack of consumer awareness/involvement or idea generation, which would put the entire effort at a loss.
- There is potential for liability if the product breaks or has to be recalled, which could harm brand equity and incur significant cost for consumer compensation.
Logic: The logic behind the contest would an increase consumer involvement, the brand equity of Staples, and the amount product lines the company sells, while bringing more foot-traffic to both Staples’s physical stores and website.
Feasibility: Since the contest would be a cost-efficient way to increase awareness of the Staples brand and potentially build up profitable product lines, it would seem feasible enough if executed correctly.
In order to better tailor Staples’s print/copy efforts to the busy lifestyles of business professionals, the installment of print/copy/shipping Kiosks in airports, hotels, and malls could be implemented. This provide a better experience for the customer by allowing them to conveniently print/copy/ship business documents from a location that differs from the traditional print and copy shop.
- Having kiosks across many locations would make printing/copying easier to access for customers. Ideally, this would give Staples more of the necessary market exposure to maintain relevancy.
- There has yet to be a company in the industry to attempt these kiosks on a mass scale, so there wouldn’t be much competition in this segment of the market. If it were to prove to be successful, it could distinguish Staples from the others and give it an advantage over the competition.
- Putting up printing/copying kiosks across many locations could incur large developmental and operating cost, while having a chance of not initially turning a profit.
- Since there are no competitors in the industry, it is concerning to have little relevant information to compare the results of implementation. This has resulted in an environment of uncertainty, where there is unseen possibility for profit or loss.
Logic: The logic behind this is that it will be able to provide multiple benefits; Staples could market to consumers about having more smaller convenient printing/copying kiosks. The placement of these kiosks will allow people to see how they function and that they provide a useful service. Also, it would be a new concept that could set Staples apart from the rest of the industry.
Feasibility: Although developmental costs would be high, the reward could be potentially huge. This would be a new idea for the industry that could bring print/copy kiosks to various neighborhoods. It could be highly unique and profitable, but equally risky, since the investment would incur these cost without a guarantee of success.
Diverting from Staples primary strategy of selling to consumers, they can develop a sales force that focuses on selling 3D printing technology and solutions for small to midsize businesses in industries that utilize 3D printing the most. Generally, these professions include hobbyists and “makers,” industrial designers, product engineers, medical practitioners, and artists (Gewirtz, 2015).
- Staples can remain relevant in the Print/Copy conversation and establish a solid, early market share in the 3D printing industry by selling business-to-business. As the technology progresses throughout its life cycle, Staples will have established themselves as the go-to provider for 3D printers through early investments in the industry, and thus have a larger share of a prosperous niche market than its competitors.
- The cost associated with developing a sales force would be worthwhile when considering the benefits of implementation. Since Staples has been using a cost focus strategy, it would follow the premise of this strategy if they hired internally to divert Staples employees into potentially more profitable investments.
- Since Staples has acquired PNI Digital Media and MakerBot, the technology could be used as an efficient platform when interacting and collaborating with small- to mid-sized businesses.
- Hiring and training requires a significant amount of time and money; although, if Staples were to hire internally, it could be a possible solution to alleviate expenditures. Unfortunately, 3D printing is still relatively new technology, so Staples would be risking their resources for a possibly detrimental outcome in an uncertain industry.
- If Staples’s 3D printing sales force performs significantly above expectations, they risk growing too quickly. Large companies may demand more than of Staples’s production capacity. This may result in the need to invest in more production facilities or a larger sales force, in order to accommodate for demand.
- Starting a new investment with uncertain outcomes could cause stockholders to have concerns. Staples may see a decrease in their stock price and expectation figures if they were to implement this program.
Logic: By focusing on businesses that already use or are aspiring to use 3D printing, Staples minimizes their risk of relying on consumers to buy their products. They should gain knowledge of which firms that use this form of printing, as to narrow down Staples’s target market. As society catches up with the technology, it will position them as one of the leading provider of 3D printing and be the go-to provider for the business-to-business 3D printing services.
Feasibility: This alternative is feasible since it requires marginal cost, resources, and risk, if implementation is successful. The 3D printing market is expected to grow tremendously, with revenue forecasts exceeding $21 billion dollars worldwide by 2020 (Clark, 2015). By gaining market share in the enterprising market, Staples can increase their chances of beating competitors in the print/copy market whenever 3D printing technology becomes mainstay by a majority of consumers.
Since crowd-funding has become a popular way to develop new products and services that bring mass appeal; the implementation of a crowdsourcing contest, that emphasizes on Staples 3D printing technologies, will aid in product development and market share in the copy/print industry. This option was chosen since Staples already possesses a 3D printing department, while Office Depot and FedEx Print do not. Also, the logistics behind creating a prototype kiosk or a sales force could incur various cost and have the potential to be highly unprofitable if it does not catch on.
Implementations & Evaluation
Contest Development Program
Task 1: The first major task involved with the implementation of this plan would be coming up with the parameters of the crowdsourcing contest, such as the title of the contest, the rules towards it, the winner’s compensation, how long it should last, and how the contest should be evaluated.
Procedure 1: The procedure for this would be to create an internal project team to assess the different aspects that go into creating the contest. Then by coming up with a structured framework to base the contest on, more advanced facets can be measured and approached.
Task 2: The second task will be a market assessment to build a consumer profile in order to better the marketing efforts of the contest. Based off of demographics, psychographics, and geographic location, Staples would be able to find and target their ads towards consumers educated in 3D design software.
Procedure 2: The consumer profile should be assessed by the project team’s marketing division through PRIZM reports, local market testing, and survey-taking. By creating an in-depth outline of the hobbyists and creative designers who use 3D printers, Staples can better tailor the rewards, ad location, and feedback of the contest participants.
Task 3: The third task of this program would be advertisement development. After identifying the ideal consumer, audio advertisements for online music streaming websites such as Pandora, YouTube, and Spotify will be created due to their ability to target a large amount of specific consumers. The advertisements would be on a monthly alternating schedule, rotating between each of the three websites over the course of a year.
Procedure 3: This will be a continuation of the second procedure since the marketing division will be overseeing the creation of the online audio advertisements. Equally as important, they will be responsible for the strategic distribution of these advertisements to maximize the exposure and awareness of the contest.
Contest Execution Program
- Once prime locations are determined, advertisements will be used through the formerly mentioned channels to reach individuals that have the resources and knowledge to create unique products. By reaching throughout the online community over a fleeting advertisement schedule, it will try to maximize awareness about the contest, thus encouraging more entries to be made and voted on.
- Throughout the scheduled advertisements, more participants would enter, and it would call for a further social media push to gain additional following. This could be done through daily posts on social media websites like Twitter and Facebook that would go towards furthering the spread of awareness in a cost-effective manner.
- As more people enter, incremental measurements should be taken to make sure that the contest maintains relevancy amongst the online community by updating participants with scoreboards of the top-backing inventors. As well, it can also form the base for further primary research for people who buy or use 3D printers.
- Using the project development team, monthly/weekly measurements can be made based on unique visitors, frequency, and overall hits of the contest website. From there, a constant estimation of the contest results can be made to determine whether it is consistent or not.
Contest Evaluation Program
Coming to the conclusion of the crowd-funded contest, the polling website will close and the overall results will be tallied. From this, winners will be determined and announced at both flagship Staples stores, and the three contest winners will be rewarded with their cash prizes listed in their contracts. Finally, this can lead to a possible continuation depending on overall results from participation, impact on brand, and profitability.