And United Stationers Inc.
3. Analysis of potential new entrants
Threat of new entrants (Source: Datamonitor,2007)
The threats of new entrants into new entrants in this industry are noted to be very string. This is because most of the supplies are in the form of commoditized products that never benefit greatly from the brand loyalty. This when coupled with the low end-user switching costs as well as easy access to the suppliers and distribution channels makes it very conducive for new players to come into the market. The market is however very stagnant at the moment and this reduces its attractiveness to the potential new players.
4. Analysis of substitute products
Substitute products (Datmonitor,2007)
An analysis of threat of substitutes within this sector is moderate. This is because most of the modern companies are involved in strategies that minimize cost as well as reduce environmental impact of their operations. The strategy they mostly adopt is paperless office. The switching costs are not too much since most of the companies have already put in place appropriate information technology (IT) systems. The revenue generated from paper-based office products is threatened by this shift in operational strategies.
5. Analysis of suppliers
The firms within the office equipment supplies & services sector deal in a diverse variety of products and services and this means that they must source their materials from various suppliers. The main materials that are used in the manufacture of office supplies are plastic resins, pulp and paper and metals. The general lack of raw material differentiation leads to a detraction from the supplier power. The importance of the quality of raw materials as well as cost when coupled with the lack of a targeted and specific importance of the office services and supplies industry to the suppliers adds to the already existing supplier power. The key suppliers are paper mills. These integrate forwards for the purpose of providing paper-based office supplies. The supplier power within this industry is therefore moderate. The supplier power of technology-based solutions and equipment such as printers is also moderate.
6. Analysis of buyers
An analysis of the buyer power in the office supplies and services market segment reveals that it is moderate. This is because the office supplies and services market sector serves a very diverse number of clients in the business community. This effectively limits the buying power of individual clients. There is however low customer switching costs as well as low customer loyalty which helps in providing the customer with degree of choice that therefore enhances the buyer power. The degree of buyer power in this market segment is however dependent on the size of the customer. Most office supplies firms require tendering for contracts with large organizations and businesses that can result in high purchasing power. Smaller businesses also practice group purchasing of office supplies in order for them to realize discounts associated with bulk purchasing.
Buyer power (Datamonitor,2007).
7. Summary of industry opportunities and threats
The industry opportunities include engaging in products that are eco-friendly such as paper-less office equipment. This trend can be captured by this industry by investing in marketing strategies to support eco-friendliness. The benefits of cost reduction and efficiency associated with paper-less office must also be promoted by these companies as it is the current trend on office technologies.
The threats that the traditional office supplies and services industry faces is associated with technology. The paperless technology is both a threat and an opportunity in this market segment. This is because it posses a threat to the traditional office supplies and services industry while offering a future in the same market segment.
8. Implications for strategy development
This therefore has implications in the formulation of current and future strategies. The company must come up with ways of marketing its traditional products while offering a smooth transition towards paper-less technologies and office automation.
c. Firm
1. Objectives and constraints
Office Depot has several objectives and constraints. The company has sales and marketing objectives, training objectives as well as customer service objectives.
Sales objectives
In regards to sales, the company aims at having all of its transactions processed in a timely an orderly manner. This is important because a smooth interaction between the sales function and the finance function is crucial in all companies since a communication breakdown between the company and its customers in regard to payments would result in an unpleasant experience. The company's financial department must be asked for the customer's credit rating in order to evaluate their credit worthiness (will they pay for their products and service?).Items...
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now