Good Case Study About Office Depot Analysis
Office Depot is an organization that operates in over 59 countries worldwide and is located in Florida, United States. The company’s industry is mostly specialty retail, dealing with office supplies and other related products. According to the company’s audit reports, the company has annual sales of over 11.2 billion dollars, employing over 66,000 employees, well known as associates (David 2007). ODP has a set of factors that yield to consistent growth and profit maximization. Such factors include the organization’s mission statement. The company has a strong statement, aimed at delivering winning keys that motivate work life. It refers to the organization’s need and thirst for ensuring timely delivery of their services and products to their consumers. The aspect of “winning” is based on the level of confidence possessed by the company, and the inspiration acts as the source of motivation for the organization. The company aims at creating a much fulfilling lifestyle for all the involved stakeholders. The company shares the desire of maximizing human potential for achieving personally set objectives and life goals.
Office Depot also focuses on other corporate values to steer all the workers efforts towards objective achievement. Integrity is among the major values, and aims at bettering its relation with the stakeholders and the counterparts of the organization. These include the suppliers, employees and the customers. The company is obliged to remain faithful, dependable, and trustful in all its endeavors. Another factor is innovation. The company has steadfast trust and belief in innovation and creativity. It is through these factors that the company is able to indulge in profitable risk-taking and delivering best quality products to all the consumers. ODP also believes in accountability (David 2007). The company is responsible for all its unprecedented results that create extraordinary value to the organization’s shareholders. For this reason, the organization indulges in shared leadership, collaboration, and personal commitment to objective achievement. Customer focus and inclusion are additional corporate values of the organization.
Porter’s Five Forces Analysis
Bargaining power of suppliers
The supplier has less bargaining power, since the amount supplied is numerous, therefore putting Office Depot on the bargaining seat. The company thus determines the decisions of the suppliers through its actions and will.
Intensity of existing rivalry
The large industry size results to an increase in the intensity of rivalry of the organization. Office Depot faces stiff competition from the rival organizations and thus must better its services and products to match the competition.
Bargaining power of customers
The large size of the industry and existence of many consumers results to the increase in the bargaining power of consumers. The customers have a wide range of products from different organizations to choose from in the industry (David 2007). For this reason, the company must ensure that it maintains ties with the consumers to maximize profitability.
Threat of substitutes
The introduction and improvement of the technological levels in the industry is resulting to threat of substitution. Many companies have entered the industry and are now surpassing the market. The company is thus at a threat of losing its steady demand.
Threat of competitors
There exists a great threat of competition, since the customers have a low switching cost. The company also requires a strong distribution network to ensure that it surpasses the competition. The advancement in technology is demanded to ensure that the company competes favorably with the rival companies.
The corporate environment created by Office Depot aims at bettering the working spirit and maximizing the productivity of the company in the highly competitive industry. It includes bettering employee relations, both with fellow workers and with the management too. It betters their overall productivity and their efforts of bettering customer ties and stakeholder trust on the company.
Office Depot has been involved in a recent merger with Office Max to widen its market capitalization and overall productivity (David 2007). The merger resulted to improvement in sales, profit levels, and customer-organization ties. Recently, the company reported of the merger, which yielded maximum organizational profitability. The company’s merger amounted to a change of the market capitalization, in that it increased its asset value and overall turnover. The merger has bettered the state of the company and through it, there are expected increases in the amount collected inform of profits.
Office Depot is highly profitable, and it can be named among the best performers in the industry. It has a large market for its products, and the level of demand maximizes its profitability levels. However, stiff competition and possibility for substitution hinder its growth and expansion. Elimination of these will automatically amount to success of the company in the specialty industry.
David, F. R. (2007). Strategic management: Concepts and cases. Pearson Prentice Hall.