Financial Appraisal of Office Depot
Part 1 Background introduction for Office Depot
Office Depot is a supplier of office products and services. The company's selection of brand name office supplies includes business machines, computers, computer software and office furniture, while its business services encompass copying, printing, document reproduction, shipping, and computer setup and repair. An S&P 500 company, Office Depot generates revenues of over US $14 billion annually and has 42,000 employees worldwide. It is headquartered in Boca Raton, Florida. Office Depot is one of the biggest office supplies retailers, but its sales revenue decreased dramatically 26% from 14.5 billion dollars in 2008 to 10.7 billion dollars in 2012.
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Threat 1. Economic Crisis lead to declines in business and consumer spending One of OD’s largest U.S. customer groups consists of various state and local governments, government agencies and non-profit organizations. The shadow of economic crisis not yet slaked till now, the financial deficit made the U.S. government cut various budgets which including the office supplies budget. The effect of economic crisis is same to the corporations in America. 2. Intense Competition OD face competition from other office supply stores that compete directly with it in numerous markets. This competition is likely to result in increased competitive pressures on pricing, product selection and services provided. Many of these retail competitors, including discounters, warehouse clubs, and drug stores and grocery chains, carry basic office supply products. Some of them also feature technology products. Many of them may price certain of these offerings lower than OD does, 3. The development of IT lead to the concept of Non-paper office activity Less paper, less ink. This environmental concept will reduce the usage amount of traditional stationary. Indeed, more and more new generation of staff practice with the help of information technology.
Part 3 Micro-level systematic analysis for Office Depot
From the perspective of micro-level, the stakeholders related to OD should pay close attention to its financial data, in order