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Sears Company Analysis

Essay by 24  •  August 25, 2010  •  2,655 Words (11 Pages)  •  2,106 Views

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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.

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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. (www.nyse.com)

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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." ( www.vault.com) 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. (www.vault.com) 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. (www.vault.com) Sears has also

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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.

III. 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

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