Staples and Five Forces Analysis

Staples and Five Forces Analysis

Staples Analysis Using Porter's Five Forces Analysis

Staples is one of the world's leading office products retailers with locations in 22 nations and 1,884 stores located throughout North America and Europe. The company organizes its operating divisions into three business units, which include North American Retail, North American Delivery, and International Operations. The North American Retail segment is comprised of both retailing operations in the U.S. And Canada, and manages retail stores in 47 states and 11 Canadian provinces. The market orientation of this division is on the needs of small businesses and home office workers. The North American Delivery segment is focused on selling and delivering office products and services to customers, and includes the fulfillment operations of Staples Business Delivery, Quill and Contract. Quill is the brand name Staples gives to its direct mail catalog and e-commerce business that targets over one million small and medium-sized businesses in the U.S. alone. The International Operations segment is focused on the 22 nations the company operates stores, fulfillment centers, e-commerce strategies, and direct selling relationships to small businesses located in selected countries in Europe, Australia, and Asia. The majority of this specific division's e-commerce initiatives are in predominantly in Eastern and Northern European nations.

Environmental and Market Factors Influencing Staples

The International Operations sector of Staples' business throughout 2006 and into the first months of 2007 shows the greatest revenue growth, yet North American Retail has recently been dragged down by slower-than-usual technology and furniture sales, and according to Staples' latest financial results, only a 3% gain in supply sales. Staples also invested heavily in the launch of their newest store in Miami, Florida and the offering of their services programs EZ Tech and a series of in-store copy centers focused both on driving up same-store sales and also increasing high-margin revenue. Throughout 2006 and into 2007, Staples has faced significant challenges against competitor superstores including Wal-mart which has taken on an increasingly competitive role in supplies for small business. North American Delivery, the fulfillment center area of Staples, posted a 24% gain in revenue and is on its growth plan that management defined for investment analysts in 2006.

While the North American sectors of the business are mixed in results, the growth of International Operations has been significant during 2006 and into 2007. With an 11% increase in sales in 4Q06 alone which had been factors for exchange rate fluctuations, Staples continues to successfully expand into the UK and German office supplies, furniture and computer retailing sectors.