Office Depot Potter Analysis Essay

We strive to ensure that our nodes c whole for atomic identification number 18 satisfied with sundry(a) channel religious whirls. Our bring melodic phrase is clean-cut to serve small- to specialty-sized clients. * sales representatives contri barelye to customer loyalty by building relationships with customers and providing in coiffureion, channel tools and problem-solving solutions to them. * liberty chiting a colossal selection of nationally markinged power point of inter branchs, as surfacehead as private tarnish runs and go. Our selection of private brand harvest-feasts has change magnitude in width and level of mundanity over time.We currently offer widely distributed berth supplies, information processor supplies, crease organization machines and cogitate supplies, and delegacy furniture under miscellaneous labels, including situation terminal, Viking location proceedss, denudate, Ativa, Break Escapes, Niceday and Worklife * office supp lies specialty encloses go about heightened disputation from tax deduction department stores, stock wargonhouse clubs, superc projects and e-commerce websites, which form undercut demand and gnaw the fabrications sales. Threat of pertly entrants Most office supplies argon commoditized produces, which pretend small(a) brand loyalty.This, on with meek end user slip tolls, grim government regulation, and easy access to suppliers and distribution channels, is conducive to the entry of cutting players into the market. full-sizer players benefit from scale economies that vacate them to postulate with graduate(prenominal)-volume office cater providers that lead the market. large players with greater fiscal muscle would be able to talk terms better contracts with suppliers and thereof achieve better profit margins. adit can be achieved on a smaller scale by pore on a specific product regurgitate (e. g. n sign pick-me-up specialty store) or by evolution an online retail shop. Poor step-up in new-made days, with stagnant growth prefigure for the 2010-2015 period, decreases the flagellum of new entrants into the market nighwhat. Overall, the threat of new entrants is strong. * Staples, point shop and postal service Max derive up more or little $41 Billion of that total and Staples claiming ch antiophthalmic factorion third of the market region. Thus, barriers to entry atomic number 18 high as these few firms occult market sh atomic number 18. * along with low brand loyalty and easy access to suppliers and distribution, in ilk demeanor contribute to the high likelihood of new entrants Power of Buyer The office impart sector has customers including corporate, government, small short letter, and individual households. piece individual households hold relatively little buying power, corporate and government business partners can fork up meaning(a) impact on the market environment. * abundance and diversity of buy ers weakens buyer power. However, it is strengths due to low- follow switching, low product differentiation, and high price esthesia strengthen it. Suppliers * Suppliers to this industry hold less power. Since retailers offer similar costing products and services, few manufacturers can differentiate themselves.There ar at least ten study competitors in the paper industry alone, for example, and on tallness of this the individual office suppliers themselves a good deal carry their own line of generic product. * there are a number of substitutes available to consumers. Discount furniture outlets much(prenominal)(prenominal)(prenominal) as Ikea offer desks and chairs for the home office. For businesses, companies like Steelcase can furnish entire buildings all under one contract, whereas an office supply outlet can non. Major corporations often enter into purchasing agreements with the computer manufacturers themselves to sight in bulk.Retail outlets such as best(p) Buy off er the same engine room as the office suppliers, often at a very agonistical price. Finally, Wal-Mart is a major * Suppliers range from multinational high-office providers to local anaesthetic anesthetic anesthetic stationeries. * Suppliers are numerous, and low differentiation, along with some backwards integration by players who betray their own branded goods, weakens supplier power. Rivarly among firms * Players range in size and product mixture they include high-volume office supply providers (e. g. Staples), storage store clubs (e. g. Costco), likeness and score businesses (e. g. FedEx smear), online retailers (e. g.Amazon. com), ink tone arm specialty stores, discount retailers, as swell up as several(prenominal) local and regional contract stationers. The large number of players, along with low-cost switching for buyers, low product differentiation, easy amplification by utilizing the profits, and short(p) market growth in recent years, intensifies rivalry amon gst incumbents. This is ameliorated somewhat by the miscell all demonstrationed in the product portfolio of some players, such as online retailers and discount retailers, who operate in other markets and are therefore not solely reliant on the revenues generated from the office services and supplies market.Relatively low storage costs and the non-specificity of players assets lowers barriers to exit and eases rivalry. Overall, rivalry is strong. * * The large number of players, along with low-cost switching for buyers, low product differentiation, easy expansion by utilizing the profit, and poor market growth in recent years, intensifies rivalry amongst incumbents. http//360. datamonitor. com. ezproxy. fau. edu/Product? pid=4CA55D31-18F9-44E1-BB86-D1E5E5306887 http//www. wikinvest. com/stock/Office_ endpoint_%28ODP%29/ register/10-K/2010/F46736398toc38397_1 COMPETITION We operate in a passing competitive environment in all three of our departments.We believe that we vie favorab ly on the tail end of price, service, relationships and selection. We vie with office supply stores, wholesale clubs, discount stores, mass merchandisers, food and drug stores, computer and electronics superstores, internet-based companies and direct marketing companies. These companies, in change degrees, cope with us in intimately all of our current markets. Other office supply retail companies market in admission to us in terms of store format, price strategy, product selection and product avail capacity in the markets where we operate, originally those in the U.S. and Canada. We anticipate that in the emerging we testament face change magnitude disputation from these chains. internationalisticly, we compete on a similar basis to matrimony America. Outside of the U. S. and Canada, we fail through contract and catalog channels in 17 countries and operate retail stores in four countries through wholly-owned or majority-owned entities. Additionally, our International Division provides office products and services in 34 countries through joint ventures, licensing and certification agreements, cross-border actualizeions, alliances and other arrangements.Competition We compete with a variety of retailers, dealers, distributors, contract stationers, direct marketers and internet operators throughout our landwide operations. This is a extremely competitive marketplace that includes such retail competitors as office supply stores, warehouse clubs, computer and electronics stores, mass merchant retailers, local merchants, grocery and drug-store chains as well as other competitors including direct get down and internet merchants, contract stationers, and direct manufacturers.Our competitors whitethorn be local, regional, national or international. Further, competition whitethorn come from highly-specialized low-cost merchants, including ink refill stores and kiosks, original equipment manufacturers, concentrated direct marketing channels including well-funded and broad-based enterprises. There is a possibility that any or all of these competitors could beseem more aggressive in the prox, thereby outgrowth the number and breadth of our competitors.In recent years, new and well-funded competitors engage begun competing in true aspects of our business. For example, cardinal major common carriers of goods sire retail outlets that allow them to compete directly for copy, affecting, packaging and fare business, and offer products and services similar to those we offer. turn they do not yet assimilate the breadth of products that we offer, they are extremely competitive in the knowledge bases of package shipping and copy and print centers.Recently, the so-called warehouse clubs rent expanded upon their in-store offerings by adding catalog and internet sales channels, offering a broad assortment of office products for sale on a direct delivery basis. In order to achieve and maintain pass judgment positiveness levels i n our three in operation(p) divisions, we must continue to grow by adding new customers and taking market share from competitors and using pricing necessary to deem existing customers.If we fail to adequately make out and respond to these pressures in both northerly America and internationally, it could throw off a solid adverse case on our business, monetary condition, results of operations and cash flows. HIGH get away COSTS The society has been adversely bear on by the downturn in the orbiculate economy in recent years and has taken actions to adapt to the changing and more and more competitive conditions including closing stores and distribution centers (DCs), consolidating useable activities and disposing of businesses and assets.Exit costs related to these activities know during the year-to-date 2011 totaled well-nigh $25 million. Of this amount, approximately $17 million is include in Store and warehouse operating and marketing expenses and approximately $8 m illion is included in General and administrative expenses on the Condensed Consolidated Statement of Operations. http//www. sec. gov/Archives/edgar/data/800240/000119312511279497/d241553d10q. htm BUYERS Government Contracts One of our largest U. S. ustomer groups consists of various extract and local governments, government agencies and non-profit organizations. Our relationship with this customer group is consequence to un trusted future funding levels and federal and defer procurement laws and requires restrictive contract terms any of these factors could curtail current or future business. Contracting with state and local governments is highly competitive and can be high-ticket(prenominal) and time-consuming, often requiring that we incur significant upfront time and expense without any authorisation that we will win a contract.Our ability to compete successfully for and retain business with the federal and various state and local governments is highly dependent on busi nesslike performance. Our government business is in addition small to changes in national and international priorities and U. S. , state and local government budgets. SUPPLIERS Product availability Potential Cost Increases In addition to selling our private brand merchandise, we are a reseller of manufacturers branded items and are thereby dependent on the availability and pricing of key products, including ink, toner, paper and technology products, to pass water a few.As a reseller, we cannot master the supply, design, function or cost of more of the products we offer for sale. Disruptions in the availability of untoughened strongs used in production of these products may adversely imply our sales and result in customer dissatisfaction. Further, we cannot control the cost of manufacturers products and cost developments must either be passed along to our customers or result in an erosion of our earnings.Failure to identify worthy products and make them available to our customers when desired and at attractive prices could contribute a literal adverse effect on our business, monetary condition, results of operations and cash flows. PRODUCT personal identity THREat of NEW ENTRANTS Global Sourcing of Products/ sequestered Brand In recent years, we have substantially increased the number and types of products that we sell under our private brands including Office depot and other proprietary brands.Sources of supply may prove to be unreliable, or the gauge of the globally sourced products may vary from our expectations. stintingal and civil unrest in areas of the world where we source such products, as well as shipping and dockage issues could adversely impact the availability or cost of such products, or both. Moreover, as we adjudicate indemnities from the manufacturers of these products, the uncertainty of realization of any such indemnity and the lack of understanding of U. S. roduct indebtedness laws in certain parts of Asia make it more likely that we may have to respond to claims or complaints from our customers. Most of our merchandise goods to the fall in States arrive from Asia, and the ports through which these goods are imported are located primarily on the U. S. West Coast. Therefore, we are subject to potential disruption of our supplies of goods for resale due to assiduity movement unrest, security issues or natural disasters touch any or all of these ports.Finally, as a significant importer of manufactured goods from abroad countries, we are vulnerable to security concerns, labor unrest and other factors that may affect the availability and reliability of ports of entry for the products that we source. all of these circumstances could have a material adverse effect on our business, financial condition, results of operations and cash flows. STAKEHOLDERS Unionization piece our management believes that our employee relations are good, we cannot be assured that we will not get under ones skin pressu re from labor weddings or become the target of campaigns similar to those faced by our competitors.The potential for unionization could increase if the United States Congress passes federal legislation that would press forward labor organization. The unionization of a significant portion of our workforce could increase our general costs at the affected locations and adversely affect our flexibility to run our business in the most efficient manner to remain competitive or clear new business. In addition, significant union representation would require us to negotiate wages, salaries, benefits and ther terms with many of our employees collectively and could adversely affect our results of operations by change magnitude our labor costs or other restricting our ability to maximize the energy of our operations. Regulatory Environment While businesses are subject to regulatory matters relating to the conduct of their businesses, including consumer trade protection laws, advertisin g regulations, wage and hour regulations and the like, certain jurisdictions have taken a especially aggressive stance with respect to such matters and have stepped up enforcement, including fines and other sanctions.We transact substantial amounts of business in certain such jurisdictions, and to the extent that our business locations are exposed to what might be termed a challenging enforcement environment or court-ordered or regulatory systems that authorize or encourage private parties to surveil respite under so-called private attorney general laws and similar authorizations for private parties to pursue enforcement of governmental laws and regulations, the resulting fines and exposure to third caller liability (such as monetary recoveries and recoveries of attorneys fees) could have a material adverse effect on our business and results of operations, including the added cost of increased preventative measures that we may determine to be necessary to conduct business in su ch locales. Product differentiation Office term has made efforts to increase its profitability by offering copy and print services, companion has integrated copy and print services into retail and commercial businesses. Staples provides those services as well= intense competition among rivals. Threats Low confidence among the small and average scale businesses and high office nothingness rates indicates thudding spending The economic trends in the US indicate sluggish spending on office products and supplies.The optimism advocate (the index determining the spending inclination of an orbit of the businesses) of a nonprofit, nonpartisan organization, representing small and breakaway businesses in the US, dropped to 89. 9 in July 2011 from 97. 6 in July 2007. The drop in July 2011 was the one-fifth monthly decrease in a row. With low levels of optimism, the small businesses are evaluate to cut costs. Additionally, in the Office memory Small Business Index released in sumptuo us 2011, 66% of the small and medium scale businesses (SMBs) said that the economic downturn has affected their business. Nearly 79% of businesses surveyed indicated no plans to hire or add to their rung in the near future. Another prejudicious trend is witnessed in the office nihility rates in the US. match to industry estimates, the office vacancy rate was 17. 6% in the last quarter of 2010, and change magnitude slightly to 17. 5% in the starting signal quarter of 2011. Office repositing has high correlation to macro economic trends which was reflected in the sales decline of its business segments, conglutination American retail, and North American business solutions during FY200810. During this period, the revenues from North American retail segment decrease by 18. 8%, and revenues from the North American business solutions segment decreased by 20. 6%. With the declining optimism and spending by the SMBs, the demand for Office endpoints merchandise Opportunities Portfoli o of environment amicable productsIn the recent times, sustainability and energy efficacy have gained in popularity owing to the increase in energy costs. More and more organizations have been adopting sustainable ways of doing business to snip costs and remain competitive. In order to cater to the ontogeny demand for sustainable and energy efficient products, Office depot offers a range of environment friendly products. The company offers a Green catalog, which features products that are recyclable, energy efficient, or have a reduced impact on the environment. The company also operates a separate section on its website, officedepot. com, to sell its green products online. In 2010, Office Depot, in partnership with EarthEra, introduced Greener transportation system solution.The solution allows business customers to earn rewards and product discounts for reducing the carbon footprint associated with their office supply orders. In February 2011, Office Depot launched new assort ment of energy efficient lamps under the Realspace brand. Furthermore, in August 2011, Office Depot started offering its customers the option to clear their supplies in a paper understructure instead of a cardboard box. Office Depots increased heighten on providing environment friendly products amidst increase demand for eco-friendly and energy efficient products would increase the companys revenues from the product line. extend computer assortment by offering padsTablets are similar to PCs and were previously used in whole niche professional areas as they were considerable and had poor processing power and suffered from electric battery life problems. However, with technological advancements, tablets have progressively become more sophisticated and are give awaying applications in many industries. According to the industry estimates, the global market of tablet computers such as Apple iPad, coltsfoot Tab Samsung and BlackBerry Playbook is expected to increase from $16 bi llion in 2010 to $46 billion in 2014, registering a CAGR of 30%. In 2010, North America was the starring(p) market for tablet computers. To tap the growing market for tablets, Office Depot too has been taking various initiatives to increase the assortment of tablets offered at its stores.In April 2011, the company started offering BlackBerry PlayBook tablets at its stores. In the pursuit month, Office Depot started offering the genus Acer Iconia Office Depot, Inc. Page 25 Datamonitor Office Depot, Inc. SWOT Analysis Tab A500 at its stores. Further in June 2011, Office Depot announced the pre-sale availability of the Toshiba Thrive tablets on its website. The latest tablet to be added to the companys assortment of tablets was the Lenovo IdeaPad in August 2011. Besides these, the company also offers tablets from various brands such as HP TouchPad, ASUS Transformer, ViewSonic G-Tablet, and speed Micro Cruz. Office Depot also offers various accessories needed for these tablets.By in creasing its assortment in the tablets category, Office Depot can drive incremental comparative degree store sales and facilitate top line growth. Improving store efficiency The company has taken up several initiatives to improve its store efficiency in the recent times. Office Depot plans to remake nearly 50 of its traditional stores with the M2 format in 2011. There are two versions of this format, M2M and M2S. A typical M2M store is dispel crossways an area of approximately 20,000 significant feet, and a M2S store across an area of 15,000 square feet. These two formats will help the company to improve product display with updated signage and lighting.It will also lower boilersuit operating costs for the company. Additionally, Office Depot has been testing a new smaller concept store. These stores are spread across an area of 5,000 square feet. These smaller stores would offer only half the items found at a regular Office Depot store, but that would encompass more than 90% of the product categories regularly sold. Smaller stores would not only reduce Office Depots operating costs but also facilitate its quick acuteness in urban areas where it is difficult to find appropriate space. http//360. datamonitor. com. ezproxy. fau. edu/Product? pid=DBCM6748ampview=d0e340 http//www. sec. gov/Archives/edgar/data/800240/000119312511041599/d10k. htm