Staples Case Analysis

Pulling out of international market while give Staples the opportunity to stabilize itself. The company is making less and less income while operating in an unstable industry. The company needs to pull back and regroup. This strategy will help to maintain a profit that is large enough to keep the company operational. The bottom line is that Staples needs to do something soon if it wants to stay in business. After the previous attempt to merge with Office Depot fell through, the company needs a new profit stabilizing strategy. One of the key assumptions made was to continue operations in the U.S. while cutting international sales off. The assumption will cost $363,000,000. This assumption cuts to the core of the overall strategy. If there were to be an incident where the cost of the assumption was much larger than expected, the company would need to find other funding and resources elsewhere. This …show more content…
Once the company has pulled from the international markets it will be game on in the United States. The company must advertise using unique and eye-catching marketing tools. The issues of repetitive advertisements and consumer boldness may cause the company problems. Because there will need to be a flood effect of ads, the company must monitor consumer responsiveness. If Staples can discover where there is a problem with advertisement repetitiveness it should be able to fix this issue.
The key assumption of the strategy chosen for Staples is the ability to grow sales at a rate of 1.25% per year for each of the next five years. This assumption is central because top line revenue provides the basis for internal funding for development of strategy in the long-run. Were this target not to be met for any reason, Staples may need to secure additional outside fundraising, and the mix of funding chosen may differ from the 100% equity option deemed appropriate given the projections