1. Mission statement
Sears Holdings is one of the oldest retail shops that run in the US economy. It is also the mother store to Kmart stores. 1. Sears serves their customers with the upmost respect and provides products for customers of all demographic groups. 2. Sears provides a variety of goods and services such such as electronics, furniture, grocery and clothing. 3. Sears operates at the North American markets and also the Canadian market. 4. With regards to technology, Sears has strived to meet all aspects of the upcoming aspects by advertising their goods online. 5. Bearing in mind the numerous chain stores that Sears have in both US and Canada, it is worth indicating that each store is guided by its mission statement. 6. Despite the various mission statements, all the Sears retail department stores employees are guided by a joint philosophy:
To provide remain responsible in enhancing their customer's lives through the provision of quality goods, services, and solution that will be a tool in building trust and a firm basis for a lifetime relationship.
7. It is also advantaged due to diversity of its products and geographical location.
8. Other factors constant the Sears employees have given their customers priority with the aim of satisfying their needs and the company's good public image. This is necessary for winning the trust of the client and a stable ground for a long term relationship. 9.The Company also has embrace competition for healthy growth and financial gain and values their employees as an important tool to help with the competition for the company and also providing a good reputation for the company. Employees are able to advance higher in the company.
2. Sears Problem Statement
Sales for sears declined in 2015 by $2 billion dollars from the sales in 2014 of $7.9 billion. A) Sears plans to continue to find new marketing strategies and will condense stores to save on operational costs and liquidate non profitable assets.
3. Internal Strengths
A) Sears has a higher advantage in two strong aspects. First, it has long retail networks and also deals with a variety of goods. Sears Holdings is broad in its operations as it has 3,847 retail shops in the US and Canada. This broadness is a strength as it serves to spread risks and losses. When the company is suffering from loss losses will be shared among the various departments' retail stores to ensure that the one store does not collapse due to massive losses. Also, the broadness of the company is important as the stores can share profits uplifting those that are not performing well regarding profit returns (Pahl, & Richter, 2007). With national and international networks, the company image and brands are maintained which in turn attracts new and support from already existing customers.
A) The second strength of the enterprise is the fact that it deals with a variety of goods from tools, automotive spare parts, furniture, clothing, electronics, shoes, and even groceries. The diversity of products attracts customers with different needs which in turn increase profit; this is an important strategy that Sears have employed to maintain its high sales over the past. A variety of products also helps Sears in diversifying their risks and building on its already existing reputation (Pahl, & Richter, 2007). The losses Sears has can spread to those lines of products that are doing well hence distributing the losses and minimizing the impact of loose in a single line of product.
3. Internal Weaknesses
B) These are the factors within a business that negatively affects its operations (Pahl, & Richter, 2007). With regarding Sears, two significant weaknesses can be attributed to its current poor performance. The two include poor management and the debt requirements. First, the Sears has recorded a decline under the leadership of Eddie Lampert the current CEO. There is a need to make leadership changes so as to improve the current situation of Sears.
B) Secondly, are the principles and rules that govern debts requirement, Sears have carried debts from different financial supports who place demanding requirement such as high interest on loans which in turn drains the company's profits. The current position of the Sears company is at stake due to it has to borrow money to maintain its operations. But the situation is correctable as the company can sell some of its properties to pay off loans and avoid them in future or make agreements with debts with reasonable requirements that meet their financial abilities.
4. External Opportunities
A) These are the market gaps that provide an opportunity for a business organization to expand. Sears has many opportunities, but this paper will focus on two main ones of emerging markets and availability of private brands. Currently, there are new markets that have developed such as China, Japan, and India and most of the organizations have expanded their operations to this new markets (Gibson & Hughes,2011). The company also can expand its operations in the markets to increase their sales and also spread risks. There are high chances if Sears expands its activities in these countries it will succeed as the economy of these countries has the capability to grow.
Sears has an advantage because it has its brands, and all it needs to do is to reposition its brands so it can benefit from the existing market. There is a market gap in the US market that is providing entrepreneurs ready to manufacture their products a ready market (Gibson & Hughes 2011). Sears has many private brands this where the company has a perfect opportunity to venture into the market. This will help the company to maximize its sales which will in turn reap more cash for the company solving its financial problems efficiently and hence embarking on their financial stability.
4. External Threats
These are factors that are not within the business but pose a challenge to it. Sears Holding has two main external threats that have seen it suffer in the markets to the extent that recently it has recorded massive losses that have facilitated to the closure of some of it store.
A) One of the threats is the stiff completion. In the past Sears was the leading retail shop in the US, but it was overtaken by retail stores such as Walmart and Target. These are the leading retail stores in the US market (Cadogan, 2009). Sears was faced with stiff competition that it lost some of its customers' to the competing retail shops hence reducing its sales.
A) Secondly the country's economic status. The economy of a country determines the success or failure of business. The economic position of a country influences the prices of product which affect consumer's ability to spend on primary and secondary goods hence affecting the sales of these products (Cadogan, 2009). Sears have been through the economic recession period which saw the economy of the US grow slowly which negatively affected the company's performance. As the US struggled with stabilizing its economy, Sears was also struggling with stiff completion and a weak economy.
A) Sears operations are at stake, and there is a need for the management to consider an approach that will best solve its financial crisis arising from debts and weak sales. The best strategy that the company can employ is the Divestiture Method which is a form of defensive strategy and mainly involves selling a part of an organization with the aim of raising capital for other investments. The Divestiture Method is the best strategy that the Sears Company can employ as it is effective due to some reasons.
A) First, the plan helps and organization to do away with division that is non-profitable. In a broad company that has many divisions a division can be performing poor in such a way that it does not earn the organization any profit, and therefore the organization through divestiture strategy can get rid of such a department and invest the money in others that are profitable (Chang, 2006). In a business set up, some business activities perform relatively well while other do not due to some factors such as unhealthy completion and there is a need to monitor closely those divisions that are not profitable so as to ensure that the cost of running the department do not drain other divisions. In the Sears case, the company has various groups, and since the business is at stake, it can sell some of the lines of products that are non-profitable and use the capital to boost those that are earning the company profit or investing in other competitive products. This strategy will also give the company a chance to sell the divisions that are failing the business as a whole.
Secondly, the approach allows the organization to acquire a significant amount of money within a short period and in the most efficient way (Huber, 2011). When an organization is faced with urgency and quickly need money, it can acquire it by selling part of its business. The process of selling part of an institution efficient as the division is sold and the organization receives money. This is efficient as the other sources of money such as loans where you first have to qualify for the loan, the loan is limited and time has to take place for it to mature. Sears needs a lot of funds to settle its debts and also to aid it in improving its sales and by using this strategy they will acquire quick cash to pay the debts and to support the business performance before the matter is out of hand.
The plan provides the organization with an opportunity to do away with a division that does not match with others. Due to the diversity, an organization can run many divisions with different products, but some categories provide a huge difference in matters of operation, employees, customers, production process and values in that is views as an awkward division (Baumgartner, 2012). In this case, the department can be eliminated from the organization by selling it and using the cash in improving the other divisions. Sears deals with a variety of products and it can employ this strategy to finish those that do not rhyme with other departments. The approach can also be used to do away with divisions that do not fit with others in the organization regarding resources. A department can be too demanding and demand the operational cost be spent on them and their administration than other than other departments in organization.
5B. Role of Diversification
Diversification is the process of reducing risk by spreading it to various assets; this implies investing in many assets (Markides, 2007). Unrelated diversification is one of the different types of diversity and mainly focuses on the production of many products that are not related in any way. The strategy requires the organization to involve different business which is capable of providing sound financial performance in their various industries; the approach opposes the ideas of a business sticking to one line of production or to those that fit each other. The approach encourages organizations to be vibrant to benefit from the disadvantaged companies such as a company that is financially stressed, that which need capital or a company whose assets are undervalued.
Unrelated diversification is an important element as it reinforces Divestiture Method in some ways. First, it encourages investment in divisions that have the ability to prosper and yield financial benefits for the company (Markides, 2007). Divestiture focuses on selling units that are non-profitable to invest in those that are economically competitive.
Secondly, diversification allows the organization to invest in business with financial distress to provide the necessary capital to the affected business. On the other hand, the Divestiture Method will allow selling off a part of the organization with the aim of earning a significant amount of money hence dealing with the financial distress effectively. On the contrary, unrelated diversification discourages the emphasis of matching business activities while divestiture focuses on dealing with divisions that fit each other in one way or another.
6. Strategy Implementation
The process of change is challenging because people are resistance to changes and therefore to implement a strategy successfully some factors should be considered. First is the financial ability of the organization business changes. It is important to determine whether or not the financial ability of the company can support the implementation of a strategy (Huber, 2011). For example, during policy implementation, the organization may need to hire new employees, change the products or improve a brand which needs funds. Secondly is the culture of the organization. Organizational culture guide how things are done in organizations and to implement a strategy it is necessary to consider the organization's culture. Thirdly is the size of an organization. Different groups have different geographical coverage area which in turn influence its operations when strategizing on the implementation of a method in an organization and it is important to consider its size. Finally, is the consideration of the available resources that are essential in the implementation process such as human resources.
The three critical resources that significantly determine the implementation success of a strategy include human resource, financial and physical resources (Huber, 2011). All the resources in an organization are interrelated and work together to achieve the goals of the organization. First, in the human resource, this includes all people working in the organization both skilled and unskilled. Human resources are pivotal in the process of implementation as they play a role in determining the how the strategy will be implemented which in turn will influence the implementation results. When carrying out a change in an organization, the employees' attitudes towards the modification determine whether or not the strategy will be successfully implemented or not (Huber, 2011). It is important to include the employees in the change process and motivating them in different ways to encourage them in carrying out the change process.
Secondly is the financial resources. These form the back bone of the organization as it cannot operate without finances. When implementing the change process, there will be some changes that will lead to the spending of financial resources. Financial support plays an essential role in the production of a new brand, employing new employees, and acquiring new locations among other necessary things to make a company successful (Edgcomb, 2003). Sears strategy of solving their financial crisis is dependent on its financial stability.
Lastly is the physical resources which include the production process, marketing factors, and information technology. During the change process, it is important to consider the organization's manufacturing process, the nature of the market and how the organization uses information and technology. Sears physical resources such as the availability of production materials, the nature of the market are competitive or not, and the use of technology in conveying and acquiring information will significantly affect its implementation process.
To determine the success of a product in a competing market, and it is important to consider three factors. First is to identify the availability of such a product in the market, secondly is to focus on other substitute products from competing firms and lastly is to determine the price of other related brands (Cadogan, 2009). In the first case, determining whether or not the product exists in the current market will help the producer to decide on how to improve it if it exists r how to introduce it if it does not. Secondly, is determining the availability of other substitute commodities so as to rate your product and determine it the success in the existing market. Lastly involves playing around with the price of the organization product to attract and win more customers than their rivals.
7. Discussing implementation and monitoring and evaluation.
During the process of this the following steps need to be made such as having an alternative generation, alternative analysis, a policy adoption, policy implementations and policy evaluations (Chang, 2006). Even though this type of analysis might involve a best case or worse case scenario for each policy there are alternatives. With monitoring, individuals are able to learn from the experiences and in addition improve on the practices in addition to have the internal and external accountability of the resources used and the results obtained. Monitoring in a way allows the results to be documented and be able to be a decision maker in a process. Evaluation allows data to be apprised and that the information to form decisions in addition be able to improve the situation and or project in the future (Chang, 2016).
One effective form of an effective implementation management system is the Performance Evaluation. With regards to evaluations these are tools to be able to monitor and in addition be able to observe employees. The performance evaluations are able to give feedback in addition produce rewards, (Performance Evaluations, NA).
A) Planning phase is one of the control components in a management system. When something needs to be done, the first thing that needs to be done is to find the objectives in which an outcome or result desired would be obtained in this stage, (Giraud, F., Zarlowski, P., Saulpic, O., Lorain, M.A., Fourcade, F., & Morales., J. 2011). The other part of the planning process is to be able to achieve the objectives or goals. Being able to have decisions in the process or action plans set in place and having the resources is necessary. Having a strategic plan would be able to determine for the company to have long-term objectives. Being able to have an operational plan and also incorporating a budget would be able to have the company and or management. Another would be a measurement system in which like with performance it can be measured and that basically it will produce profit, product quality and also a credible image for the company (Giraud, F., Zarlowski, P., Saulpic, O., Lorain, M.A., Fourcade, F., & Morales., J, 2011). Measurement systems are able to produce clarification and communication of performance.
A1) With the planning phase of performance management, this includes the results monitoring of things. This allows companies and or management to closely monitor and get the desired performance dimensions they are wanting to get. The targets must be set and that the results are then monitored for the dimensions of performance which is chosen by the company (Giraud, F., Zarlowski, P., Saulpic, O., Lorain, M.A., Fourcade, F., & Morales., J 2011).
Measurement systems play a critical role in performance as it fore sees the future long term goals of the company. Things such as reliability, validity, relevance and the cost and time add to the measurements. This can also intertwine with the Learning Loop. The Learning Loop (Giraud, F., Zarlowski, P., Saulpic, O., Lorain, M.A., Fourcade, F., & Morales., J, 2011).
With regards to these two components the planning will fully function and also observe the proper results that a company wants to have. The results of this can implement new advances in the company and in addition management can alter the already plans and or objectives they have. Being able to produce results is what any company wants and being able to have a objective in the beginning is always a needed start. Measurements systems allow ideas and or things that the company has already to be examined by management if it is working effectively and if it not, then they can change it or alter it in a way that the company can produce better results from it. Being able to incorporate both of these can produce positive results especially with performance with management and employees to make them be successful in a competitive company.
...(download the rest of the essay above)