Staples Case Analysis Critique
1. What is Staple’s competitive advantage in the online marketplace? The critique team agrees that Staples.com’s competitive advantage in the online marketplace is Staples’ brand name. The analysis team correctly points out that 75% of the market is being served by generic retailers, so that Staples.com can use Staples’ brand name to better reach into that portion of the market. Staples has an established customer network under its brand name from which Staples.com can gain wallet share. Staples.com also has Staples’ customer demand information and consumer feedback databases. The critique team would add that the “click and mortar” can use Staples’ established distribution and customer service systems
The critique team disagrees with the analysis team’s assessment that Staples.com should not enter the Small Office Home Business (SOHO) services market. This market has the potential to increase Staples.com’s revenue stream. After all, the SOHO market was a target market according to President and CEO Jeanne Lewis. Also, the U.S. online office supplies industry was $1.3 billion in 1999 and was projected to be $65 billion by 2003. The services market could increase Staples’ revenue.
The critique team agrees with the analysis team on Staples.com’s implementation of services. Staples should indeed focus on its core competencies and allow external service providers to manage their own services. Staples should enter into contracts with these external service providers and receive a percentage of sales when a customer uses the online site to obtain the service. The analysis team is correct that Staples.com would be reducing its risk by partnering with an external service provider. The critique team would add that the service providers should share the marketing costs on services to keep them vested and to offset Staples.com’s cost risks.
4. What should Staples.com’s pricing strategy be relative to the competition? What should their pricing strategy be relative to Staples’ catalog and Staples’ retail stores?
The analysis team is right about Staples.com’s pricing strategy relative to competitors. The items most often bought should be discounted