...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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...Staples Case Analysis Critique 1. What is Staple’s competitive advantage in the online marketplace? The critique team agrees that Staples.com’s competitive advantage in the online marketplace is Staples’ brand name. The analysis team correctly points out that 75% of the market is being served by generic retailers, so that Staples.com can use Staples’ brand name to better reach into that portion of the market. Staples has an established customer network under its brand name from which Staples.com can gain wallet share. Staples.com also has Staples’ customer demand information and consumer feedback databases. The critique team would add that the “click and mortar” can use Staples’ established distribution and customer service systems that purely online competitors will be unable to replicate. In this way, Staples straddles the “internet showroom” problem by showing products in-store and selling online, or vice-versa. 2. Do you agree with Staples.com’s growth strategy and timing? Why? Are they following a “Get Big Fast” strategy? Would you pursue wallet share or market share as your first priority? Or like Staples.com, would you pursue both with vigor? The analysis team is correct that Staples.com is striking while the iron is hot. The market is already significant at $1.3 billion, and is expect to be approximately sixty times as much in four years. Service providers for small businesses are not big-name enterprises, so adding service capabilities will allow expansion...
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...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...
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...Absorbable Sutures versus Staples for Cesarean Sections Victoria Fath Kent State University Absorbable Sutures versus Staples for Cesarean Sections Introduction The Merriam-Webster Dictionary (n.d.) defines a Cesarean section as, "A surgical operation for giving birth in which a cut is made in the mother's body so that the baby can be removed through the opening." "Cesarean delivery is the most common major surgical procedure performed in the United States and elsewhere. Currently, approximately a third of pregnant women in the US and 15% worldwide deliver by cesarean, and this prevalence is on the rise" (Dana Figueroa et al., 2013, p. 33). Since Cesarean sections are incredibly common and are only increasing, the risks for complications, such as infections, increase with it. To try and decrease the risks as much as possible, this study aims to look at the differences between two types of closing material used in Cesarean sections; absorbent sutures and staples. Are absorbable sutures more effective and safer than staples for Cesarean sections? The purpose of this study is to compare absorbent sutures and staples for clients undergoing a Cesarean section and to see which material has a lesser risk for infection and wound complications, which is more cost effective for the hospital, and patient satisfaction. This paper will help shed light on this subject by compiling multiple research articles and journals to create a better understanding on which...
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...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...
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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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...1- a) Staples used several elements for the communication mix such as Television 2009 by back to school program. Also when staples revived it popular “ the most wonderful time of the year”. Moreover they used public relation campaigns (Do something 101). Promotional partnership by (with bed, bath & beyond in a “shop smart for college” promotion). In addition, online display, social media and event sponsorship. b) Is to target the core customer whom keeps vesting staples. 2- For Television it is push strategy because staple is pushing Ads through the TV and it is a non-active communication. Public relation, by (Do something 101) Staples pushing to the community a good corporate image that serves the community and also it could be considered pull strategy. For the promotional partnership with bed bath & beyond its a strategy of pushing information that they create a program to attract attention of the customer. Social media is a pull strategy where staples can use to engage their consumers. 3-Staples targeting small to medium-size business. Also they are targeting home office people and education. 4- Yes there is a massage agrees with Staples strategy, which is “that was easy” and that is described by the easy button. Staples has many stores in many areas in the country, in their stores they are offering the “easiness” in purchasing office supplies by simplifying the store organization and create a tagline and images to make it easier for their customers in their shopping...
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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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...Staples This paper will look at what Staples had achieved with their environmental initiatives they have since placed into effect. During the year 2010 Staples developed and implemented an over arching sustainable strategy. Their focus was ways to greater benefit the impact they have on the environment while meeting the needs of all their customers. The five pillars that constituted the foundation of Staples’ sustainability program are as follows: • Selling more sustainable products and services. • Offering recycling solutions for customers. • Eliminating operational waste. • Maximizing energy efficiently and the use of renewable energy. • To become a sustainability leader in the global community. Staples set goals and developed metrics to measure their progress. In 2010, to accelerate their commitment to product sustainability, they launched a ‘Race to the Top’ theory. This theory was designed to drive eco-innovation in product manufacturing, packaging and distribution. It challenges suppliers to compete in delivery of superior products, cost, and features and to find innovative solutions for packaging, product design and manufacturing to reduce environmental impact. Staples also recycled more than 63 million ink and toner cartridges and 10.4 million pounds of technology waste in the United States. They reduced electricity use per square foot by 12%. Staples also received Energy Star certificates for 125 of their facilities. The company also has 53 all-electric trucks...
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...Staples:Just Walk On By Reading Closely:- 1.) This essay makes a very powerfull impact on how many people percieve others appearence to be very scary and try and get all negative thoughts in their mind and think them as thiefs.I personally have been lucky enough to not get through any incident like this and im sure if I was on the lady's side,i would have frightened equally or maybe even more.These situations indeed prove to be very inappropriate and surprising at times. 2.) Staple is basically trying to put up a random situation which may occur with anyone of us in our daily lives and it shows the way one would react in such a situation and which is obviously very unexpected and scary for many,people have their own perceptions about what the other person is thinking which may prove to be true in many cases but not all the times. Staples is adament in his approach of letting his audience know about the experience and the udden nervousness a person goes thru in such odd situations,according to him we should try and gather these experiences and should behave strongly in such cases. 3.) Some main points from me as the white woman in the story are stated as under:- a. The deserted street and darkness makes all the things look much more scary. b. The man was approching close to me which made me feel nervous and i started walking faster as i was not sure about the intentions of the man,i was worried and the only thing i could do then was to get rid of him. c. As I...
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...1. ¿Debe Staples mantener la línea de muebles de oficina? Justifique su respuesta Si Staples decidiera mantener la línea de muebles de oficina, responda las siguientes preguntas: Si debería mantener la línea de muebles. Para mantener el mercado actual con la que hemos llegado a ser conocida. Redirigir ese mercado a nuestra nueva orientación. Es un mercado con mucho potencial 8.000 millones y los márgenes que se pueden obtener son los más altos en torno al 30%. 2. ¿A qué segmento/s de cliente/s debe dirigirse Staples con su línea de muebles? Describa el/los segmento/s y justifique su respuesta. Piense en… Empresas mediana-pequeña (de 2 a 14 empleados) y particulares. Particulares jóvenes con un poder adquisitivo medio. El motivo principal es porque el mercado de empresas grandes ya está liderado por empresas de precios bajos. Por otro lado, el reposicionamiento que planteamos está muy ligado a los intereses/preferencias que pueden tener este tipo de clientes. Tiene como ventaja que las empresas pequeñas tienen menos contacto con mayoristas al no comprar grandes cantidades. Particulares existe una nueva tendencia a tener una oficina en casa y se preocupan más por su diseño. * ¿Qué debe hacer Staples para captar a los clientes que no compran muebles de oficina en sus tiendas? Debería mejorar la percepción calidad precio y el diseño. Comunicar nuestro concepto de oficina. * ¿Cómo hacer para aumentar la compra promedio del cliente de muebles...
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...important to not combine these two stages into one. By specifying the need first then identifying the options to meet the need allows for lower cost and better or more innovative solutions. Also if a supply professional believes that more opportunities exist to improve the commercial equivalent presented by designer they must bring it to the designers’ attention. This involvement prevents the hassle of trying to reverse a design decision after it’s made. The example the book used was two pieces of wood. We say “I need a nail to nail these two pieces of wood together,” instead of “I need to fasten these two pieces of wood together.” There are many ways to fasten the wood together, nailing is just one way. Using a bolt, screw, or staple are other methods of fastening the wood together. Interpret the value to the organization when early supplier involvement (ESI) is implemented effectively. Early supplier involvement (ESI) is valuable to the organization, it ensures that what is specified in the needs is procurable and represents good value. ESI can help identify any possible issues, eliminate unnecessary costs early on, encourage innovation, and improve project organization. . References Johnson, P. F., Leenders, M. R., & Flynn, A. E. (2010). Purchasing and Supply Management. Boston: McGraw-Hill Irwin. Scott, S. (2014). Strategies for Implementing Performance Specifications: Guide for Executives. National Academy...
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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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...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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...Essentials of MIS, 9e Laudon & Laudon Lecture Files by Barbara J. Ellestad Chapter 9 E-Commerce: Digital Markets, Digital Goods Twenty-four/seven—the mantra of the Internet. Whether it’s buying, selling, gathering information, managing, or communicating, the driving force behind the evolutionary and revolutionary business is the Internet and its technological advances. 9.1 E-commerce and the Internet Take a moment and reflect back on your shopping experiences over the last year. Did any of them not involve using the Internet in one way or another? Perhaps you simply used the Internet to research the cost of products without actually purchasing a product or service online. Perhaps you emailed a company to get an answer to a question you had about a product after you purchased it at a regular brick-and-mortar store. Or, maybe you compared prices between two businesses to get the best deal. If you did any of these you are among the growing legions that rely on the Internet as a new way of conducting business and commerce. E-Commerce Today The text provides useful statistics to demonstrate the solid growth in e-commerce. Many companies that failed during the “dot.com” bust did so because they didn’t have solid business plans, not because e-commerce as a whole wasn’t a good idea. The Internet has proved to be the perfect vehicle for e-commerce because of its open standards and structure. No other methodology or technology has proven to work...
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