...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...
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...Proposed Merger Between Staples and Office Depot Leads to Concerns of Higher Prices Michael Baye and Patrick Scholten prepared this case to serve as the basis for classroom discussion rather than to represent economic or legal fact. The case is a condensed and slightly modified version of the public copy of the FTC's motion for a temporary restraining order and preliminary injunction against the proposed merger between Staples and Office Depot dated April 10, 1997. No 1:97CV00701. OFFICE SUPPLY SUPERSTORE MARKET Staples and Office Depot pioneered the office superstore concept within months of each other in 1986. Over the next ten years, they and a number of other firms seized on the same strategy of providing a convenient, reliable and economical source of office supplies for small businesses and individuals with home offices. These firms competed aggressively, developing office superstores as a one-step destination, carrying a full line of consumable office supply items as well as assorted other products. Staples and Office Depot have been immensely successful: today, Staples has almost 500 stores and Office Depot has more than 500 stores nationwide; they compete head-to-head in 42 metropolitan areas across the country. On September 4, 1996, Staples and Office Depot entered into an agreement whereby Staples would acquire the stock and assets of Office Depot for $4 billion. The merged company would have combined annual sales that exceed $10 billion. Absent the merger, both...
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...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...
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...How would you classify the office superstore industry? Who are the competitors? What are the characteristics of this industry that lead to this conclusion? Today’s office superstore industry in the United States provides a convenient one-stop shopping experience for small businesses and individuals with home offices. The main competitors in the industry are Office Depot, Staples, and Office Max. All of them offer a variety of office supplies, as well as computers, office furniture and other business related items. Office Depot is the largest office superstore chain in the United States. Office Depot is first in total number of stores, first in average sales per store, first in average weekly store sales, first in total delivery sales and first in net earnings. Most importantly, Office Depot is the lowest price competitor among office superstore chains. Staples is the second-largest office superstore chain in the United States; and the third major player in the office superstore industry is OfficeMax. The intense competitive rivalry between Staples and Office Depot turned to be quite beneficial for consumers. Both competitors had to reduce prices, introduce innovative approaches to marketing, distribution and store layout and expand into new areas of the country, bringing increasing numbers of consumers the convenience of one-stop shopping at low prices. Office Depot has been the most aggressive and lowest-price competitor, in turn forcing Staples and OfficeMax to compete more...
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...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...
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...merger and arguments opposing the merger. When we think about many of the major companies today we are able to see that many of the big businesses like Office Depot have brought out Office Max and one of the reasons is because they wanted to be the strongest as a company in their area of sells against their rival in 2011. Well to be honest it may seem simple but it actually a little there is a little more to it, so let us examine this little further. First let us start with describing the firms in the proposed merger. Yes, as it was mentioned beforehand that they came but Office Depot and Office Max wanted to be better competition against Staples who in 2011 was the big tycoon. Well it gets better for Office Depot and Office Max because those that are in charge with keeping up with annual sales and revenue figured that Office Depot and OfficeMax, the second and third largest office-supply chains in the U.S., agreed in February by combining a $1.17 billion deal after losing sales to online rivals and to Staples. They said the merged company would have more than 2,100 stores and combined revenue of about $18 billion compared with more than $24 billion in sales for Staples, the largest office-supplies chain. http://www.bloomberg.com/news/articles/2013-11-01/office-depot-merger-with-officemax-wins-u-s-approval. Even Staples was forced to change their strategy when it came to selling products by having and online website. It would prove here today that was one of the...
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...Key nonmarket issues - Whether to allow Staples and Office Depot to merge on the basis of antitrust concerns. Interests - The three office supply superstores, Consumers, Competitors like other Superstores (e.g. Walmart, etc.), Manufactures, Suppliers, Labor organizations. Institutions - Courts, FTC, DOJ, Congress. Information - Asymmetric (FTC has done a lot of research and know quiet a lot to support the antitrust case but Staples and Office depot will know more about the relevant product market, Pricing etc.), Incomplete (e.g. Whether it was possible to pass through the improvements in efficiencies to the consumers and if yes how much), Contested (Whether the definition of the relevant product market was right, etc.). Nonmarket issue lifecycle analysis - The issue was in the legislative stage. FTC had contested the merger of Staples and Office Depot on the basis of antitrust concerns and now the courts have issued a preliminary injunction. But instead of continuing with the trial the companies have decided to terminate the merger. Hence it can be said that issue is in the enforcement stage of the issue life cycle. Brief answers to the end of case questions - 1) What was the key finding by the court that effectively decided the case for a preliminary injunction? While making a decision the court required the FTC to show that its challenge was likely to succeed and in balancing the equities it was of greater harm to let the transaction proceed than to reverse it later...
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...VISION Staples' corporate soul is centered on a rock solid belief in social responsibility and the desire to make a positive impact on our associates, customers, and the world. We act responsibly and with integrity, conducting our global business as a great employer, corporate citizen and neighbor. Staples' soul thrives in the fair treatment of our diverse and talented associates, in our environmental conscience, in giving back to our communities and in our sound business ethics. MISSION "Staples Soul reflects out commitment to corporate responsibility. It's what moves us to embrace diversity, sustain the environment, give back to our communities, and practice sound ethics. Linking these values with our global business strategy and operations contributes to our financial success and helps us become a great employer, corporate citizen, and neighbor.. OBJECTIVES Staples encompass beliefs and objectives that are core to our culture. In fact, we've found that our stakeholders — customers and associates, investors, communities and others — look to us not only for strong performance on price, quality and value, but also for leadership in corporate responsibility Some of the main objectives lies like this Firm financial performance and stability Ethical behavior & environmental awareness Respect of communities both domestically and internationally Develop European division to same profitability levels as its North American Delivery DEVELOPED VISION AND MISSION...
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...Office Depot – 2011 External Audit Opportunities 1. Gift card popularity increase of 7.3% in specialty retail during 2009. 2. Online sales increasing faster than traditional retail sales. 3. World economy is slowly on a rebound. 4. "Emerging economies" have accounted for nearly 70% of world growth in the last five years. 5. Value of the USD decreasing by .07 in long-term over the last five years against the EUR. 6. OfficeMax reported negative net income in 2008 and 2009 with marginally positive net income in 2010. 7. Staples has Debt of $2.54 billion. 8. CEA projects a 6.0% increase in electronics sales for 2010 and a 3.5% increase in 2011 (to $186.4 billion). 9. 5 yr. average ROA for OfficeMax is -4.93 compared to -2.93 for Office Depot. 10. 5 yr. average ROE for OfficeMax is -21.61 compared to -7.91 for Office Depot. Threats 1. Staples' EasyTech support service offering. 2. 86% of companies plan to spend more on social media in 2011 for marketing and customer service. 3. Staples has, as of 2009, 954 more retail stores worldwide than Office Depot. 4. 5 yr. average ROA for Staples is 8.89 compared to -2.93 for Office Depot. 5. 5 yr. average ROE for Staples is 16.38 compared to -7.91 for Office Depot. 6. Unemployment rate continues to be just below 10%. 7. Consumer spending has been flat over the last 2 years. 8. National customer satisfaction has been flat over last 2 years. 9. Staples had...
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...The case 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...
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...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...
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...Breton Finished and Stapled: The Power of Words Was it something I said? Employees are signing petitions, customer satisfaction is low, stock prices are sliding quickly, and profits are down. Ethical business decisions can have a great impact on employees, customers, investors, and the profitability of a company. This is precisely what one of the most successful global office supply stores is facing since it recently issued a policy memorandum to its managers that resulted in accusations that the company was reducing employee hours as a result of the Affordable Health Care Act (BuzzFeedNews, 2014). Old or New Policy; That is the Question On December 6, 2013, Staples distributed a policy memorandum that restricted the number of hours that part-time employees could work to 25 hours each week. The memorandum indicated that the company was issuing the policy with an effective date of January 4, 2014 and would allow managers to hire additional staff to ensure adequate coverage. While employees feel it is a mechanism for avoiding the mandates of the Affordable Health Care Act, a Staples spokesman stated that the policy is not new and that the policy has been in affect for more than a decade. Moreover, the spokesman indicates, the policy is a reiteration of an old policy in attempt to offer scheduling flexibilities and ensure efficiencies. (BuzzFeedNews, 2014). It may be a matter of semantics, but does a reinstated policy need an effective date if it is currently...
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...[pic] Staples SUBMITTED BY Introduction • Staples Inc. founded in 1985 by Thomas G. Stemberg 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...
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...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...
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...Pre-Merger Kmart and Sears Prior to the Kmart-Sears merger, both companies had glaring failures. Having been two of the oldest national retailer’s, the largest problem they shared was failure to stay current with the changes in trends throughout the years which was ultimately leading to their swift demise. Kmart was successful as a low-cost clothing and home-goods retailer, however once competitors such as Wal-mart and Target entered the game with similar quality products and the same low prices, Kmart took a large hit. In the 1990’s Kmart began opening a variety of ‘Super Kmarts’ that incorporated a larger grocery department that included fresh produce to compete with Wal-mart. In the end, the food retailing strategy was deemed a failure. In January of 2002, Kmart filed for bankruptcy protection after several of their suppliers began withholding deliveries and demanding cash from the retailer (Davies, James, Schindelheim & Valenti, 2002). Edward Lambert gained control of Kmart which lead to an increase in stock value based on Lambert’s previous successes. Kmart stores began closing in regions that were deemed the most unprofitable, and a focus was put on urban areas that were not in Wal-Mart dominant regions (Snavely, 2003) Sears battled similar problems especially in terms of staying current and competitive to large big-box retailers like Wal-Mart. Due to it’s historic image of quality goods and regular pricing, it was becoming difficult to draw in customers even...
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