...Page 1 of 4 Case #8: Outsourcing at Office Supply Inc. Through the initial integration of information technology into its core business, Office Supply Incorporated (OSI) attained a large cost advantage over its competitors and reaped rewards in both profits and stock prices. Unfortunately, as Nicholas Carr outlines, IT is becoming more of a commodity for companies and less of a source for strategic differentiation. Moreover, lack of IT expertise within OSI has begun to inhibit the growth of business operations and rising IT costs are shrinking profits. Jim Anfield’s proposition for OSI to outsource its IT infrastructure to Technology Infrastructure Solutions (TIS) provides the opportunity to not only match the pace of business growth, but to cut costs and increase the reliability of service to OSI customers. Anfield’s detailed and careful analysis indicates both cost savings and support for growth, however in moving forward from this point TIS will need to work closely with OSI to avoid what Thomas Kern refers to as the “Winner’s Curse.” As Carr suggests, “When a resource becomes essential to competition but inconsequential to strategy, the risks it creates becomes more important than the advantages it provides.” OSI’s IT infrastructure is clearly essential to their success as it provides their customers with easy access to their products, however this does not necessarily mean it is essential to their strategy. More specifically, we can say that IT infrastructure is vital...
Words: 1490 - Pages: 6
...General Office Supplies. The State Bar is seeking proposals for a contract office stationer for general office supplies and and related services. The State Bar intends to award a master contract designating a single source as the preferred supplier for a period of 3 years, with an option to renew for an additional 1-year term. Please submit 12 copies of your proposal no later than 5 p.m. on April 9, 2010 to: The State Bar of California 180 Howard Street San Francisco, CA 94105-1639 Attn: Andrew Conover Procurement 415-538-2207 andrew.conover@calbar.ca.gov I. INTRODUCTION The State Bar of California (“the State Bar”), created in 1927 by the Legislature and adopted into the California Constitution in 1960, is a public corporation within the judicial branch of state government. The State Bar is a unified, or integrated bar, and membership is mandatory for all attorneys who are licensed to practice law in the state. In addition to its mandated licensing and disciplinary and certification functions, the State Bar offers a number of other programs designed to assist, educate and protect its members and the public. The State Bar has offices located in Los Angeles, Sacramento and San Francisco. More information about the State Bar can be found at http://calbar.ca.gov/state/calbar/calbar_home_generic.jsp?cid=10102 II. STATEMENT OF WORK A. General Scope of Services The State Bar is seeking proposals for delivery of various products and office supplies...
Words: 7282 - Pages: 30
...Porter’s analysis: 2. The second factor is rivalry among existing firms. * Office Depot’s major competitors include: IKON Office Solutions, Staples, United Stationers, OfficeMax, and Wal-Mart Stores. The competition among these firms is highly intense. Another competitor is Fedex Kinko’s (14% of the market segment) * Staples, Office Depot and OfficeMax) comprise about 11% of the market combined. * print and ship services are approximately 17%, ranking it as one of Office Depot's most profitable offerings * Office Depot, Staples and Officemax are the market leaders in the office supply industry. However they only account for 10% of the market. The rest is divided widely between supermarkets, wholesale retailers, discount stores (including Wal-Mart) and smaller independent companies. * Office Depot has made efforts to increase its profitability by offering copy and print services, * One advantage Office Depot has over Staples is its international market. * Company has integrated copy and print services into retail and commercial businesses. Staples provides those services as well= intense competition among rivals. * In an effort to increase their sales, Office Depot decided to implement direct sourcing, which allows companies such to offer its own line of private label goods, and branded goods. Office Depot and Staples are very competitive in this regard, with about one-fifth of all goods sold coming from respective private labels. * We...
Words: 3614 - Pages: 15
...Founded in 1985, Staples Inc. is the largest office supply store in the world, with over 2000 stores in 22 countries. It provides supplies, office machines, promotional products, and furniture, technology and business services both in stores and online in the retail industry. Targeting the two main types of customer, Staples Inc. uses B2C strategy for personal consumers and B2B strategy for organizational consumers. Within the office supply market, the three main competitors of Staples include Office Max, Lyreco, and Office Depot. Office Depot (ODP) is a merchandise and services company founded in March 1986. It generates revenues of over US $11.6 billion in fiscal year 2010 and has over 40,000 employees worldwide. It supplies business machines, computers and computer software, and office furniture. Office Depot also delivers business services encompassing of copying, printing, shipping, and computer setup and repair. Juxtaposed against Staples Inc., ODP is in a specialty retail industry targeting only one core category of customers―small business owners. We will start by comparing Staples Inc. and Office Depot Inc. in terms of their profitability and asset utilization using gross profit margin and total asset turnover. Staples had a gross profit margin of 0.267 in 2009 and a margin of 0.269 in 2010 whereas Office Depot had a margin of 0.280 and 0.291 in 2009 and 2010 respectively. Office Depot’s larger margin suggests Office Depot’s average margin between its selling price...
Words: 1253 - Pages: 6
...and Leo Kahn in Brighton, Massachusetts. • It is headquartered in Framingham and employs 89,000 employees worldwide. Staples sells office supplies at more than 2,000 stores. • In additional to typical office supplies, stores offer computer hardware and software, furniture, art and school supplies and printing and copy services • The company has recorded revenues of $25.1 billion with an increased rate of 1.9 % compared with the previous year. Staples Strategic Plan 1. Mission Statement and a Vision Statement. • Maintain their leadership position by delivering their brand promise. Focus on customer service, customer acquisition and retention and providing customers a broad assortment of core office product and services. Focuses on expanding categories beyond core office supplies, copy and print services, promotional products and furniture. Database Upgrade, PeopleSoft upgrade, Implementing Kronos time and labor for timesheet, Ecommerce application support/upgrade/enhancements. • Staples Inc. vision is to be a world’s leading office product. Maintain sustainability and make a good reputation. Staples would open many stores worldwide in many countries to make customer easy to buy their product respectively and want the customer choose their company as the only one supplier office product for their business. Analysts are expecting earnings growth to increase by 5.58% over this year's forecasted earnings. ...
Words: 1648 - Pages: 7
...Staples Equity Valuation and Analysis David Lecky Chad Loudermilk Bennett Matkins Kara Reynolds Amanda Rhodes David.Lecky@ttu.edu Chad.loudermilk@ttu.edu Bennett.Matkins@ttu.edu Karereyddd@yahoo.com Amanda.b.Rhodes@ttu.edu Table of Contents Executive Summary……………………………………………………….. 2 Overview of Staples and the Industry………………………………... 7 Five Forces Model……………………………………………………………………….. 9 Rivalry among Existing Firms……………………………………………………….. 9 Threat of New Entrants……………………………………………………………….. 15 Threat of Substitute Products………………………………………………………. 17 Bargaining Power of Buyers………………………………………………………... 17 Bargaining Power of Suppliers…………………………………………………..... 18 Classifying the Industry………………………………………………………………. 18 Key Success Factors……………………………………………………………………. 19 Competitive Advantage Analysis………………………………………………….. 19 Accounting Analysis………………………………………………………. 25 Key Accounting Policies………………………………………………………………. 25 Accounting Flexibility………………………………………………………………….. 26 Evaluation of Actual Accounting Strategy……………………………………… 29 Quality of Disclosure…………………………………………………………………… 30 Screening Ratio Analysis….…………………………………………………………. 33 Revenue Diagnostics………………………………………………………………….. 34 Expense Diagnostics…………………………………………………………………… 37 Potential “Red Flags”………………………………………………………………….. 39 Undo Accounting Distortions……………………………………………………….. 41 Ratio Analysis………………………………………………………………. 44 Liquidity Ratio……………………………………………………………………………. 44 Profitability Ratio……………………………………………………………………….. 56 Capital Structure...
Words: 32047 - Pages: 129
...Staples A Case Study Prepared By Strategic Management & Policy Introduction: Staples is the largest office supply retailer in the United States. Founded in 1985 in Brighton Massachusetts, Staples has grown to operate 1,575 stores and 58 distribution centers in the US with and an additional 387 stores and 66 distributions centers across the globe. Current Mission Goals and Strategy: Staples mission is “to make it easy to buy office products”.¹ By utilizing its “Staples Soul” program, the company aims to provide exceptional value, selection and customer service. INTERNAL ANALYSIS: Staples is a strong company with an IFEM score of 2.64 Finance Staples has a weak financial rating despite its overall strong IFEM rating. In looking at valuation ratios, Staples does look pretty good if you were looking to invest in this industry. Although Staples is performing well below the industry in P/E Ratio (9.11 vs. 14.5) they do have a lower price to cash, price to book and price to sales ratios and they are paying higher dividends (3.45 vs. 1.80) when compared to the industry. These indicators do paint a more favorable picture for investors. This fact does not offset some of the weaker financial indicators. Even though their 5 year growth rate is nearly double the industry (6.82 vs. 3.86), recent growth rates are very alarming as they measuring far below the industry average (-1.10 vs. 5.11). This is especially...
Words: 2324 - Pages: 10
...programs (Eastern State Hospital Educational Department, Merrimac Juvenile Detention Education Program). In charge of creating, processing, and maintaining over $1 Million Dollar budget. Created expense reports. Gathered information, assembled, and integrated different software types(Microsoft Word, Excel, PowerPoint) to produce documents and charts for review. In-charge of gathering, assembling, and ensuring an accurate account of monthly student data for/from 25 state operated programs to be sent and verified by the state education department. Liaison between all impacted departments to ensure proper communication and reporting practices. Office Supply Manager. In charge of purchasing computers, copiers, printers and program supplies for both work sites. Direct vendor relations to maintain, repair, and refurbish office equipment. In charge of impact card; requisition order and reconciling receipts. Planned and coordinated luncheons, special events, travel arrangements, venues, and agendas for state-operated programs. Developed presentations and brochures for related on and off site meetings. Direct business relations and distribution of school literature to stimulate interest and informational materials throughout different school districts. Created monthly reports pertaining to weekly attendance and vacation records on 10 departmental employees....
Words: 1128 - Pages: 5
...financial standing of that company. We will go over many different financial ratios and explain what they mean to the company we are discussing. Before moving forward, let me discuss the company I chose, why, and the industry sector this company belongs to. I am choosing to do my report on OfficeMax. OfficeMax belongs to the consumer retail industry sector and competes directly with Office Depot and Staples and on a more broad spectrum with other companies. The operating risks involved with a company like OfficeMax in the consumer retail industry are very different in nature, but they are all equally as important. There are a few that I would really like to touch base on and explain my view on them a little bit. Any company involved in the retail industry (and many others) are directly affected by the ever-changing real estate market. Another important note is that many retailers are in low-growth consumer markets; specifically office supplies and they’ve attempted pushing technology as more of the main focus which could be the reason for this merger between OfficeMax and its direct competitor Office Depot. Like any other industry, there is specific regulations and a high level of compliance that consumer retailers are required to maintain and abide by. These all must be taken into consideration when deciding the company’s capital structure. I saved this one for last because I feel like it is one the most important operational risk to be considered and that is the inability to...
Words: 1555 - Pages: 7
...2015年2月10日 Staples to buy Office Depot for $6.3bn - FT.com Home Energy UK Financials World Health Companies Industrials Markets Luxury 360 Global Economy Media Lex Comment Tech Management Transport Personal Finance By Region Life & Arts Tools Retail & Consumer Telecoms Last updated: February 4, 2015 7:39 pm Staples to buy Office Depot for $6.3bn James Fontanella-Khan and Stephen Foley in New York Author alerts Staples agreed to acquire Office Depot on Wednesday in a $6.3bn transaction that will create the largest office stationery company in the US, marking the latest victory for activist investor Starboard Value. The deal establishes Starboard and its founder Jeff Smith as one of the most prolific and successful activists, in a sector of the hedge fund industry that has traditionally been dominated by higher-profile names such as Carl Icahn and Bill Ackman. ©Bloomberg Sign up now Office Depot shareholders will receive $7.25 in cash and 0.2188 Staples shares. The transaction values Office Depot at $11 a share, a 44 per cent premium on Monday’s closing price, before it emerged that the two were in advanced merger talks. However, the deal faces intense regulatory scrutiny according to lawyers and dealmakers who worked on similar transactions, as it comes just under two years after Office Depot merged with smaller rival OfficeMax. FirstFT is our new essential daily email briefing of the best stories from...
Words: 741 - Pages: 3
...is about Staples and Office Depot wanting to merge into one firm to have combined annual sales that surpass ten billion. Staples and Office Depot are big competitors in the market with one another and OfficeMax is competing as well. Office Depot is the largest chain of office supply stores with over 500 stores nationwide, while Staples has 500 stores. The superstore supply industry is an oligopoly because there are few (three) firms that dominate the office supply market. Office Depot is the lowest priced competitor, while staples’ prices are lowest in areas where all three of the office stores compete. If there are no competitors in a certain geographic area the store will raise its prices, because people will not be as sensitive to the price of products since there is no close competitor around. The barriers to entry that help maintain the industry structure is economies of sale because if additional firms try to enter the market they will not be able to survive. The firms could not survive in the market because they cannot produce the volume necessary to enjoy reduced average costs, therefore will not generate good profits in the long run. Many stores cannot enter the market because they would soon go bankrupt because Staples and Office Depot are such strong competitors; so many firms are exiting the market. If the merger were allowed a monopoly would be created in many markets because the merged store would be the sole producer of office supplies. In other areas the competition...
Words: 610 - Pages: 3
...concern. As our competitors within the specialty retail industry fight to retain their market shares, other existing companies within other industries have begun carrying office supply products, effectively lowering our market share. This, in turn has left Office Depot struggling to offer competitive pricing, selection, and services to our customers. A recent trend shows that the rapid growth of the Internet has caused consumers to make a shift toward online purchases over in-store purchases. In this memo, I will explain how we will use this trend to our advantage. I will also explain how a reduction of brick-and-mortar retailers, concentration of our e-commerce operations, and the expansion of our private-label product line will drive down costs and increase our sales revenues and operating profits. Current Industry Status The specialty retail industry is dominated by three major players: Staples (39.2% market share), Office Depot (22.9% market share), and OfficeMax (13.5% market share). However, the dominance of these three companies has been waning within the recent years. The start of the recession triggered competitors from other retail industries including warehouse clubs, grocery stores, discount stores, and shopping supercenters to carry office supplies at lower prices. In response, office supply stores have been forced to reduce their prices, taking a loss, in hopes of attracting customers for big buy purchases. These newly emerging external companies have been...
Words: 1846 - Pages: 8
...Office Depot Embraces E-Business Lena Herron ACC/340 July 29, 2013 Sara Carpenter Office Depot Embraces E-Business Electronic business (E-Business) is conducting business over the Internet or dedicated proprietary networks (Bagranoff, Simkin & Strand, 2008). E-Business methods allow firms to link their external and internal data processing systems added efficiency and flexibility, to work closer with suppliers and partners, and to improve customer satisfaction. E-Commerce is a subsection of E-Business. E- Commerce involves the process of buying, transferring, or exchanging products, services, and information through computer networks. E-business includes more business processes such as supply chain management, electronic purchasing, processing orders electronically, handling customer service, and cooperating with business associates. One brick-and- mortar business that has changed its business process because of E-Business is Office Depot, which announced its merger with OfficeMax this year. The combined companies online sales in 2011 totaled $6.7 billion representing 41.1% of total office supply company web sales of $16.30 billion, as reported in the 2012 Internet Retailer Top 500 Guide. Office Depot offers office supplies and services through 1,628 worldwide retail stores, a dedicated sales force, catalogs, and global e-commerce operations. Office Depot annual sales are approximately $10.7 billion, they employ about 38,000 associates, and serves...
Words: 961 - Pages: 4
...Office Depot Student’s Name University’s Name Date Office Depot Mission and Vision Part 1: Office Depot Mission There is no clear mission statement as they have intertwined their mission statement with its corporate values. This gives the Office Depot employees a larger picture of their vision and specific guidelines regarding how Office Depot business is conducted. According to the website of Office Depot, the Office Depot mission statement includes its corporate values of respect for the individual, excellence in communication and fanatical customer service (Making Fortune, n.d.). Office Depot Vision Statement “Delivering Winning Solutions That Inspire Worklife” (Making Fortune, n.d.). Challenges for Revitalization In the last decade where the office supplies business has been affected by recession and competition from the online retailers. During this period, the organization has seen their share price fall to $1 and continuous decrease in the size of their market share. Due to the continuously decreasing size of the retail market, Office Depot merged with Office Max in 2013 and finally in 2015, Office Depot has merged with the market leader Staples. The biggest challenge of this period of industry wide transformation has been Office Depot merging with its competitors to ensure survival. In 2013, the merger between Office Depot and their rival OfficeMax formed a $17 billion market share with above 2,200 stores. This has helped in forming a bigger No. 2...
Words: 2465 - Pages: 10
...Introduction: Staples is the largest office supply retailer in the United States. Founded in 1985 in Brighton Massachusetts, Staples has grown to operate 1,575 stores and 58 distribution centers in the US with and an additional 387 stores and 66 distributions centers across the globe. Current Mission Goals and Strategy: Staples mission is “to make it easy to buy office products”.¹ By utilizing its “Staples Soul” program, the company aims to provide exceptional value, selection and customer service. INTERNAL ANALYSIS: Staples is a strong company with an IFEM score of 2.64 Finance Staples has a weak financial rating despite its overall strong IFEM rating. In looking at valuation ratios, Staples does look pretty good if you were looking to invest in this industry. Although Staples is performing well below the industry in P/E Ratio (9.11 vs. 14.5) they do have a lower price to cash, price to book and price to sales ratios and they are paying higher dividends (3.45 vs. 1.80) when compared to the industry. These indicators do paint a more favorable picture for investors. This fact does not offset some of the weaker financial indicators. Even though their 5 year growth rate is nearly double the industry (6.82 vs. 3.86), recent growth rates are very alarming as they measuring far below the industry average (-1.10 vs. 5.11). This is especially concerning because it shows growth in the industry but a retraction for Staples. Total debt to equity looks...
Words: 322 - Pages: 2
