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Staples Joint Venture Strategy Research Paper

The first strategy that Staples should implement is to joint venture with a number of small businesses. Staples already sells existing small business products such as office supplies, cleaning supplies, and breakroom supplies. Staples also has a small business network, where users can receive practical advice from industry experts and peers who share their stories, their successes, and their obstacles. However, a physical merger with small business entities would be a strategic approach that would prove beneficial for the organization.

Staples claims that their chain of retail stores “help small business customers make more happen by providing a broad assortment of products, expanded business services and easy ways to shop, all backed with a lowest price guarantee. 5″ If you’re helping the small business customers, you may as well help the small business owners too. By negotiating and establishing a standard profit margin percentage, roughly 10-15%, the company will in turn be provided another outlet of cash flow that has the potential to increase overall profits in both the short-run and long-run.

Staples declares that they “want to be a resource for businesses with fewer than 200 employees,” something they define as the ‘mid-market,’ and that they are already in the process of “pursuing acquisitions of business-to-business service providers and companies specializing in categories beyond office supplies to build scale and credibility and accelerate growth in these areas. 5” We feel as if any particular partnership with a small business can certainly increase their credibility by increasing the acceptance rate of community consumers and aspiring small business owners.

We also feel that this will accelerate growth on not only a local level, but on a corporate level as well. “Staples is also targeting small offices that don’t yet have their own offices. 6” Staples has already partnered with the small business Workbar and has come to realize that “it doesn’t just bring in money and make use of some of that cavernous big-box space, but it also brings the people starting new businesses, and who fit a profile with two magic words in it: millennial entrepreneurs. ”

This is a terrific start at capturing the respect and admiralty of small business owners, while also drawing in attention from a more modern crowd to sort of an old-age office supply organization. Shira Goodman, CEO, claims that “historically, our key differentiators in the mid-market have been deep assortment, very competitive pricing, and fast delivery. ” In a market that they are already well-familiar with, Staples has all the reason in the world to partner with more and more small businesses.

Their efforts have been scarce, yet promising, and with a sales approach that “combines the personal touch of our salesforce with digital selling tools and robust data on customer behavior and preferences. ” Trim global alliance partnerships/remove wholly-owned operations from 50% of European countries Staples currently has whollyowned operations “across 17 countries in Europe, provides solutions across 29 European countries, and works with 21 global alliance partners” to conduct retail, contract, and online business work. Staples is steadily decling in sales across global performance.

Although they seem to be decreasing their number of retail stores in foreign countries, their income loss from continuing operations in foreign countries is spiking. With their main alliance being Europe, we feel that the removal of wholly-owned operations in approximately half of European countries would save on labor costs and redirect focus. In 2015, Staples had 75,371 global associates. That is an astronomical number of alliances that simply isn’t neccessary. Despite Staples seeing environmental impact opportunity in its European partners, Staples is in desperate need of redirecting their focus on their financial stability.

They have already taken an initial step by selling a controlling stake in its European operations to private equity firm Cerberus Capital Management to focus on their North American operations. Staples intends on retaining a 15% stake in Cerberus, an LP that “plans to bolster the European business by expanding its sales force and diversifying beyond office supplies. ” Although this appears as an upside for Staples, it is yet another third-party vendor that Staples would have to depend on.

With such a mass amount of business conducted overseas, a 15% stake is insignificant compared to if they were to have their own department take the reins. Sure, Staples could use the help. Staples Europe is in a state of rescue, and at the same time, Shira Goodman states that “One of our top strategic priorities has been to narrow our geographic focus on North America. ” However, by cutting the plug on 50% of European countries, Staples still has the ability to generate sustainable products, keep suppliers within close proximity, and be able to manage operations at their own disposal.

Limit benefits to those who have only been with the company for 5+ years According to Staples’s 2016/2017 Benefits Summary, PartTime employees receive “dental, life, dependent life, accidental death and short-term disability insurance coverage. ” Part-Time employees are also offered a 401(k) Savings Plan, “which allows associates to contribute 1 to 50% of eligible earnings, on a pretax basis, through payroll deductions. Employees are eligible to participate in the plan on the first day of the month after they have completed one year of service from their date of hire, and 1,000 hours of service.

If they do not complete 1,000 hours of service in your first year of employment, they will be eligible for the plan when they complete 1,000 hours of service in a single plan year. ” After a few calculations, it is estimated that at 1,000 hours and 52 weeks in a single year, employees would have to work an average of 19. 23 hours a week to attain this 401k plan. Full-Time Associates, 21 years of age or above, “become eligible the first of the month following 60 days of service. ” That enables only a two-month timetable and nowhere near 1,000 hours to receive this type of capital benefit.

We believe that thus far, Staples requirements for their long-term benefits have been lackluster and have generated to their gross-profit losses. Staples has been criticized on their employee policies and procedures in the past and we believe that this is just another branch off of that. Staples has a multitude of services and offerings to new employers that we feel have heavily weighed on their labor costs. For example, Staples offers vision plans, which contains options that help pay for the cost of eye exams, frames, lenses, contacts and refractive eye surgery.

Additionally, Staples offers confidential professional assistance to associates and their family members to help with a wide range of work, home, personal and family issues. We feel that perks like those mentioned are unnecessary, and have deterred Staples from striving financially. By basing their benefit packages on tenure, and limiting them to employees who have been with the organization for over 5 years, this will save a tremendous amount of time, money, and labor.

This way employees will be provided an incentive to stick with the company and earn their benefits rather than being offered expendable add-ons that see little to no financial results. Lastly, limiting benefits to longerterm employees will cut down on labor costs and allow Staples to open up cap space for other essential investments. Develop and sell new products and services in existing industries Staples has been fighting to stay relevant amid a changing retail landscape.

Sales have slumped as shoppers have moved online and overall demand for traditional office supplies has shrunk. Without the cost savings and extra sales it would have gotten from buying Office Depot, Staples is looking for new avenues of growth. As noted, Staples has already made efforts of providing more in-store services, along with an array of products and online shopping convenience. That being said, we feel as if Staples has the potential to compete with the likes of Amazon and Walmart by offering uncommon, yet original quality product and service extensions.

In 2014, Staples expanded its product offerings by including “roughly 1,600 items across eight new categories. ” The eight product categories featured were “facilities and break room supplies, maintenance repair and operations items; mail and ship expanded assortment, retail supplies for small businesses; storage solutions; gifts and cards for office parties; organizational accessories from Poppin; and early education toys and learning aids. ”

The company expected the new assortment to “help position the retailer as a go-to source for more than just office supplies. Although this is a stride in the right direction for Staples and their level of inventory, we feel as if they still remained within their own industry, and that they have the potential to market within outstanding industries such as the travel industry, the electronics industry, and the home and kitchen industry. “Our customers are using less office supplies, shopping less often in our stores and more online, and the focus on value has made the marketplace even more competitive,” states Ronald L. Sargent, Staples’s chairman and chief executive.

While Staples’ physical stores are losing money, the company’s online sales are surging. Offering now up to 500,000 products, “Staples is looking to transform its image from a paper and printer supplies store to an “everything” store as competition grows from mass merchants. ” As for services, although Staples has attempted to feature mobile phone repair and postal service, we feel as if they should primarily focus on major markets like the electronic, travel, and home and kitchen market. Staples has only released a brief offering of travel products such as luggage spinners and sets.

Also, in conjunction with a decent volume of kitchen products, they have a small selection of home products outside of the kitchen such as lamps, lightbulbs, and wall hangers. Their electronic department is the most propitious, however, they feature a lot of outdated products such as camcorders and GPS systems that simply don’t apply to today’s day and age. Staples has the utmost potential at expanding into industries that may be unknown, but would be a way to reinvent their brand and exhibit relevancy in surrounding markets.

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