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CASE 29
STAPLES: THE FIERCE BATTLE BETWEEN BRICK-AND-MORTAR VERSUS
ONLINE SALES
29-13
Debt to Equity Ratio
82.0%
100.1%
Current Liabilities to Equity
54.85%
72.01%
Financial Ratio Analysis: Other
Ratios
2013
2012
Price/Earnings Ratio
$12.72
Notes: based on
current stock
price and 2013
EPS.
c) Risk Factors:
i. Large long-term debt and obligations: $1.7 billion in
2013.
• Mitigated to some extent by large cash on hand: $1.3
billion in 2013.
CASE 29
STAPLES: THE FIERCE BATTLE BETWEEN BRICK-AND-MORTAR VERSUS
ONLINE SALES
29-14
Amazon.
i. In 2014, Staples announced 225 store closures while
Office Depot announced 400 store closures.
3. Research and Development (R&D)
a) Staples is lagging behind in the online retail category,
with its focus on brick-and-mortar stores, as opposed to
mobile technologies and e-commerce.
4. Operations and Logistics
a) Staples vision is clearly stated to provide every
product that a business would need to be successful. Its
main objectives were to provide superior value by
offering a large selection of products and services in a
b) While Staples had both domestic and international
presence, its domestic operation capabilities are
superior to its foreign operations. Domestically, the
company established facilities and offerings not just
CASE 29
STAPLES: THE FIERCE BATTLE BETWEEN BRICK-AND-MORTAR VERSUS
ONLINE SALES
29-15
it wasn’t as strategically targeted for specific areas
or company needs due to size.
c) Since Staples has so many brick-and-mortar stores all
over the world, as well as many fulfillment centers, it
d) Staples has primarily low wage earning associates
employed due to the nature of the business. There is not
e) Staples appears to be performing well against its
competition. Staples overtook Office Depot in 2005 as
the number one office supply superstore and remained on
top through 2013. Staples sheer number of store
locations has created an incredible distribution
channel, which has allowed it to leverage marketing,
distribution, and supervising costs. The North American
f) The article does not explicitly discuss operation
managers efforts to evaluate and improve current
CASE 29
STAPLES: THE FIERCE BATTLE BETWEEN BRICK-AND-MORTAR VERSUS
ONLINE SALES
performance. The case speaks more to how Staples has
g) It does not appear that Staples adjusts to
international conditions. They have been successful in
Australia and New Zealand due to large government
contracts.
h) The article does not go into detail on how operation
managers contribute in the strategic management process.
5. Human Resource Management
a) Staples updated its corporate values policy in 2012,
which provided guidelines for associates’ interaction
with customers and each other. This was implemented
because the majority of associates were low-wage
b) The article does not go into great detail about how
employees contribute to a competitive advantage since
they are mostly low-income earners. Having low-income
c) Article does not discuss how HRM compares to its
competitors.
d) The “Staples Soul” corporate values policy is a
technique that was discussed, but there was no mention
CASE 29
STAPLES: THE FIERCE BATTLE BETWEEN BRICK-AND-MORTAR VERSUS
ONLINE SALES
29-17
than low cost.
e) Through the “Staples Soul” program one of the
intentions is to generate diversity in its workforce and
f) The article does not mention if working conditions are
different country to country.
g) It appears that the role of the HR manager is more on
public perception of the company. The “Staples Soul”
6. Information Systems (IS)
a) The article does not explicitly discuss the company’s
information systems, however, due to Staples’ “in stock
guarantees” and its convenience of finding products in
b) The article does not discuss Staples’ database,
however, it does talk about its website and how it makes
strides to continue to find products easier through web
apps and doing price matching with competitors. This
falls in line with its strategy of offering the most
convenient and cheapest option for office supplies. It
does not appear that IS is a competitive advantage.
CASE 29
STAPLES: THE FIERCE BATTLE BETWEEN BRICK-AND-MORTAR VERSUS
ONLINE SALES
D. Summary of Internal Factors (See IFAS Table)
IFAS—
Key
Internal
Factor
Weight
Rating
Weighted
Score
Comments
Strengths
Strong
Brand
Perception
.15
4
0.6
This distinctive
competency has been very
successful at building a
brand name. This is very
important since switching
costs for consumers is
next to nothing, and to
be profitable and grow
the company needs large
sales volumes.
Weaknesses
HRM
.10
2
0.2
This core competency is
important because low
wages drives prices down,
CASE 29
STAPLES: THE FIERCE BATTLE BETWEEN BRICK-AND-MORTAR VERSUS
ONLINE SALES
29-19
however, it hurts brand
name perception.
V. Analysis of Strategic Factors (SWOT)
A. Situational Analysis: SFAS (Strategic Factor Analysis Summary)
Key Strategic
Factors
Weight
Rating
Weighted
Score
Duration
Comments
Online
Shopping
.20
3
.60
L
Increasing trends
to shop online,
more competitors
online,
increasing global
market size.
CASE 29
STAPLES: THE FIERCE BATTLE BETWEEN BRICK-AND-MORTAR VERSUS
ONLINE SALES
Low Margin
Products
.10
4
.40
L
Large volume
sales required to
return a good
profit.
Green
Technology
.05
4
.20
I
Reinforces the
company’s strong
brand perception,
which is a core
competency.
Logistics
.15
4
.60
L
Key factor
considering low
margins and
keeping costs
down as a core
competency.
Highly
Competitive
Market
.15
3
.45
L
Threat due to new
entrants online
can sell cheaper
due to no brick-
and-mortar
CASE 29
STAPLES: THE FIERCE BATTLE BETWEEN BRICK-AND-MORTAR VERSUS
ONLINE SALES
overhead.
B. Review of mission and objectives
1. The current mission is appropriate to be the largest
retailer. Objectives need to be focused towards online sales.
Online sales are the single largest growing market for Staples,
and their strategy and focus on expanding their online presence
reflects this.
VI. Strategic Alternatives and Recommended Strategy
A. Strategic Alternatives
1. Yes, by successfully implementing an online strategy
Staples will be able to meet its objectives.
2. A few alternate strategies:
a. Take the company private:
Pros:
• It will allow the company to focus on operations and
b. Change senior management and/or chief executive:
Pros:
• Fresh ideas, a better understanding of the current business
climate, and industry experience from outside Staples.
CASE 29
STAPLES: THE FIERCE BATTLE BETWEEN BRICK-AND-MORTAR VERSUS
ONLINE SALES
29-22
Cons:
B. Recommended Strategy
1. Corporate/business level: Taking the company private will
alleviate the importance of meeting Wall Street earnings and
growth expectations, which are currently driving the stock price
down. An additional executive should be named as “President of
Online Sales” to support the initiative.
2. Functional level: Focus on online shopping. This will allow
the company to reduce operational costs through brick-and-mortar
3. By implementing these recommended strategies, the company’s
core competencies (extensive product offerings, competitive
VII. Implementation
1. Revised logistical operations would be required with the
expansion of online sales since the brick-and-mortar distribution
centers will be reduced (but not eliminated). Large investments
2. The program to revise and expand online sales should be
feasible since it shouldn’t require large amounts of capital.
Bringing the company private again might be a bigger challenge
CASE 29
STAPLES: THE FIERCE BATTLE BETWEEN BRICK-AND-MORTAR VERSUS
ONLINE SALES
3. Existing logistic operating procedures would most likely
need to be reviewed to ensure that they can support the online
expansion of sales. It is very possible that the company would
VIII. Evaluation and Control
Since the article does not discuss the company’s information
systems it is tough to determine whether it would be sufficient
in providing feedback on implementation activities and
performance. It can be inferred that they have a relatively
strong information systems because they have very good inventory
tracking, and they already do online sales. For example, they
