Case Study : Sears Holdings Corporation Essay
Sears Holdings Corporation was once one of the great American retailers. Previously, a leader within the retail industry, former Sears executives helped divert the company’s focus from competitive retail with the intention of starting and investing in other businesses. While attention was elsewhere, Sears soon saw its resources begin to dry up and before it knew it, Sears no longer had the right resources to be competitive with other top leaders in the retail industry. We will explore the strategic mistakes Sears has made over the years.
In 1981, Sears made the first strategic mistake – an aggressive expansion outside its core retailing business, into financial and real estate service by purchasing the Dean Witter Reynolds securities firm and the Coldwell Banker real estate operation. The problem was that these new business lines had very few synergies with Sears’ core business. Besides, the move offered the company’s competitors — like Macy’s Inc., Wal-Mart Stores and Home Depot Inc. — an opportunity to invade the Sears market.
In 2006, Sears made its second mistake: restructuring its operations into several units, often run by people with little retailing experience. It should come as no surprise that this policy was doomed to fail, as evidenced by the company’s financial results in recent years. In the last nine years, Sears made its third strategic mistake – selling off brands like Lands End, and company stores, losing the brand and scale…