Customer's To Sears Competitors example essay topic

1 I. Executive Summary Sears began as a small retailer but as the years have gone by, they have become the second largest retailer of the national chains. In the environmental analysis you will discover that Sears' marketing toward women differentiated them from their competitor's and increased their sales as well as their market share. They have had many social / cultural problems that they have had to overcome, such as problems with stakeholders. There has also been a change in the company culture that has improved the mood within the company. In the SWOT analysis, the strengths, weaknesses, opportunities, and threats will be discussed. These would include employees, competition, global marketing, and the repercussions that Sears has had to face when going against the Federal government.

The Strategic Analysis will show some of the steps that have been taken to overcome some of the difficulties that Sears has had. The newest CEO, Arthur C. Martinez, has been a motivating leader for the company. He has implemented many changes that have increased sales and moved Sears back up to the top of the retail chain. These changes would include store remodeling, Internet strategies, differentiation, and human resource management. In section V, I will give my analysis of Sears and some suggestions for things that they can do to change their strategies such as keeping customer's and employees happy and staying out of trouble with stakeholders. 2 II.

Environmental Analysis When Richard Sears first began a small retail business selling watches in 1886, he could have dreamed of his store becoming a success but the success it has become, had to be beyond his expectations. Sears has seen many different changes in business and has had to adjust to those changes to keep the company on top. Currently, they are the nations second largest retailer. The number one retailer being Wal-Mart. Other competitors would include JC Penney, Target, and Eddie Bauer. Sears is in a very competitive retail environment.

JC Penny and Sears have been competitors for many years. They are both currently targeting the teen market to buy their jeans by gearing their advertising toward them. While both JC Penney's and Sears are considered department stores, Wal-Mart is considered a variety store and this is what sets them apart. Wal-Mart's marketing strategy focus's on low prices with a low scale approach, whereas Sears markets toward quality merchandise for women, as well as other quality merchandise. One of the newest campaign slogans "come see the softer side of Sears" is a marketing strategy that was meant to draw women and has been very successful.

According to the New York Stock Exchange (NYSE), Wal-Mart leads the market with 46 3/8 per share for it's stock. Sears' market share is below that at 33.95, and JC Penney's is at a low 9.5. These prices are as of October 10, 2000. (web) 3 Sears has faced a lot of problems in recent years. Their sales have fallen and the federal courts have gone after them, .".. for its aggressive method of collecting debt from credit-card holders in personal bankruptcy proceedings". ( web) This case is still pending in courts. The Federal government has also fined them for breaking child labor laws and for swindling customers out of their money by charging them for work that Sears billed them for but was not done by their auto shop mechanics. Social / cultural forces have impacted Sears' environment and sales have declined because of it.

The bad publicity has damaged customer trust and loyalty. These things have also been detrimental in communicating to stakeholders. Sears has made many mistakes in recent years and they have had to pay for them in more ways than one. The loss of trust by their customer's will turn the customer's to Sears' competitors. Also since Sears has been in so much trouble with the Federal Government, the government is most likely going to be more watchful of Sears' business practices.

Sears is trying to win back customer loyalty by tracking customers buying habits with their enormous database of one hundred million households to specialize its merchandise and catalogs items. (web) They are also giving incentives to customers to get them to shop at their stores. These include buying clubs and a gift registry service. Sears is a corporation who's CEO is Arthur Martinez. He has turned the company around in most recent years. Sears has adopted new more relaxed policies on employee relations. The employees have gone from conservative dress codes to "business casual" although they still "suit up" when meeting clients. (web) Sears has also 4 implemented flextime and has allowed telecommuting to salaried employees.

They also reward the work of their employees when they meet company goals in a variety of ways such as giving them bonuses. The culture of Sears has also changed quite a bit. According to a Sears insider, "The culture of the company has improved drastically over the past five years... We have put a lot of new management in place and devoted ourselves to nothing but retail". Sears has also made it a point to make sure that women are placed in management positions. Their progressive environment makes it possible to advance just as easily as their male counterparts.

There was some complaint about wanting to be a little more diverse so Sears has also implemented a diversity-training program. I feel that Sears would be a great place to work. They listen to their employees and their ideas and will implement ideas if they are good. I believe that the employees respond to this by giving the company all that they have. They have a very good benefits package including profit sharing and a tuition reimbursement plan.

The only complaint that I saw from all the material that I have read was that there was limited exposure to marketing functions and also that they had low wages in some of their positions.. SWOT Analysis-Sears Sears has been through many highs and lows over the years. They have also made many adjustments and have had to modify their strategies and goals. Having been in business for over a hundred years, they have had to change with the times. Recently 5 Sears has gone through another restructuring phase resulting in a new set of strengths, weaknesses, opportunities, and threats. Sears has many strengths.

The first and most important of which is their employees. Sears seems to try hard to keep their employees happy by providing a progressive atmosphere and the employees in turn are giving Sears loyal, hardworking employees. Sears also has strength in its name. People know the Sears name and they know what they can expect when they go into their stores.

They also have hundreds of stores in a lot of major malls in America so their name gets a lot of visibility. The New York Stock Exchange web site also says, "The Sears Home Services business commands the leading market share in all three segments of the home services industry (product services, service contracts, and home improvement services) and the Sears card is one of the nation's largest credit card portfolios. (web) These are also a part of Sears's strengths. Customer loyalty has been jeopardized at Sears and this would be a weakness that Sears needs to work on. Being dragged through the courts for breaking child labor laws, for hostile credit card collections, and for shady dealings in their tire repair, breaks down customer trust. My Internet source at Vault. com states, .".. a lawsuit alleged that Sears' auto business cheated client's out of $400 million between 1989-1994 for tire balancing services it didn't perform... the bad press has not helped sales". (web) Customers are essential to the survival of Sears and so Sears needs to improve their 6 image to keep the customers coming in. Other weaknesses include slumping sales and their new website.

Although the website is a new innovative idea, it just doesn't seem to be boosting the sales that Sears was hoping for. They are going to try and add more products so it is possible that the website could become a strength. Sears has many opportunities to work with in order to increase sales and improve their position. They have a huge customer database in which they can contact customers and give them special offers. They can also record customer purchases so that they can monitor their buying habits. This would enable Sears to tailor promotions to their customers.

Sears is also going into the global market and has formed an alliance with several companies such as AOL, IBM, and Carrefour. My Internet source states, "By working with European retailer Carrefour, Sears hopes to expand its overseas market considerably". (web) And lastly Sears has a store in every metropolitan market in the U.S. With their stores in all of the major malls, people can compare them to their competitors and Sears is able to compare them and see what they are doing or not doing. This could give them an edge over their competitor at times. The threats that Sears faces in the external environment would include competition from their rivals in the their retail stores as well as on the Internet. JC Penney's has long been a competitor of Sears. They sell the same types of things and offer the same types of services.

Wal-Mart and Target, the newest guys on the block, are Sears' major competitors as well as Kmart. They offer lower prices and they also now have a website that is competing with Sears. .".. Sears e-commerce venture has been 7 overshadowed by Kmart's Blue light. com and WalMart. com; Home Depot is another looming rival in the home products market". (web) So the competition is fierce in the retail markets and Sears is really going to have to work on making themselves stand out. Other threats to Sears would include the Federal lawsuits that they have been involved in recently which in turn results in customers not trusting them and therefore not wanting to go into Sears. Sears seems to be in overall good shape.

They do have some things that they need to work on such as cleaning up its image after the lawsuits, but they also have a lot going on for them. IV. Strategic Analysis Sears has managed to pretty much stay on top of things. The reason, I believe, is that they are able to keep changing their business strategies. For a time they were struggling to keep up with the competition because of antiquated business ideas and strategies.

But once again they have turned things around with a change in leadership. Arthur C. Martinez, the chairman and CEO of Sears, joined Sears in 1992. He implemented a five point strategy and wanted Sears to. ".. focus on it's strategic planning, make stores more exciting, design marketing to suit each location's customer's, increase productivity, and create customer satisfaction". (web) He started working on these strategies by marketing to women. He felt that women were their target customers. Sears designed their stores to appeal to women and they spent $4 billion dollars over a five-year period of time to remodel them. 8 Martinez is not afraid to make the changes needed to keep Sears one of the biggest retailers.

He states", Business should be willing to make big changes. Don't be fearful to be bold in your thinking". He has shown his ability to put his philosophy into practice by taking Sears into the global market. Sears has teamed up with Oracle, a database software company and Carre fore, a French retailer, to build an online market serving the retail industry. This will give Sears a boost in international sales as the Internet can reach people all over the globe.

They also have stores in Canada. Their Canadian branch has recently purchased the T. Eaton Company Limited and is using the purchase to put more stores into operation. AOL (American Online) and Sears are going into a joint alliance where they will each promote business for the other. Customers will be able to pay their AOL bills with a Sears credit card and AOL sites will have links to Sears for it's customers. Sears has jumped on the Internet bandwagon with both feet and they are planning the means in which they can succeed in their Internet venture.

According to Melanie Austria Farmer of CNET", A growing number of manufacturers and technology providers have been jumping into the lucrative business-to-business (B 2 B) e-commerce market, building trading exchanges and large marketplaces that connect suppliers, partners, and customers online". She is speaking of the company Oracle that Sears has teamed up with and Oracle is helping Sears to connect with these people. This connection will also help keep them linked up with distributors, making it easier for Sears to keep in touch with those that keep them in business. 9 Though Sears has many competitors, they have been able to differentiate their products and services.

They sell high quality appliances and tools that their competitor's do not. Their Kenmore and Craftsman lines have become national names and are well known for their quality and guarantees. They are selling private and nationally known brands of clothing and have exclusive rights to Nickelodeon's Blues Clues merchandise, which has been very successful. Sears also offers services that the other competitors don't, such as appliance repairs. Martinez has been able to implement new strategies in its human resources department as well. He brought in a new management team, empowered the employees, and has given the employees the ability to be flexible in their work schedules.

There were also rewards and incentives put into place to encourage innovative ideas within the company. According to one source, "He [Martinez] emphasized the importance of employee attitude and knowledge. "All wisdom in this business", he said", certainly does not reside in the corner office". Martinez definitely has the vision and the motivation to lead Sears into the new century.

His strategies have increased sales for Sears by the billions. V. My Analysis of Strategies and Suggestions for Changes believe that Sears is doing many things right. Their new employee policies make it easier to for their employees to be at their jobs. Happy employees ensure that the customers will be treated well, which in turn will keep the customers coming back to 10 Sears. If Sears continues to provide employees with all of the perks and benefits that they have been, then they won't have a large turnover and they will have their loyalty.

Sears does have a fairly good reputation despite the bad press that they may have received because of problems they have had with the federal government. If they can keep out of trouble and try to keep their reputation clean, they should be able to leave these problems behind them. People will forget unless they run into similar problems again. Sears has gotten a good start on their Internet venture.

They do have a lot of competition in this regard and a "new" business does take a while to get off the ground. Therefore it's not surprising that they have had a slow start but they are beginning to pick up with the alliances and partnerships that they have entered into to boost their exposure. Their e-commerce trade could become as big as their chain of retail stores. All-in all, I believe that Sears is on the right road to recovery.