Office Depot is a household name with regard to being a supplier of office and business products to both the domestic and international markets. Yet, the success story of the company is limited with regard to the domestic share of the more than 300 billion dollar office supply market. Office depot in fact only demonstrated slightly over 10 billion of sales in the domestic share. Though this is as a result of twenty years of steady growth, with the company marking its 20th anniversary in 2006, the organization needs to garner more of this domestic market share to meet the expectations of shareholders and continue to develop its overall business, while simultaneously creating cost cutting practices that will serve for slower expansion but better overall sales in existing stores. In the past few years the company has spent a great deal of its time and energy securing an international presence, under two brand names and through direct international sales from brick and mortar stores and through distribution of internet sales. The organization has likely not shown the kind of growth ist could have, as a result of fierce U.S. domestic competition in this business niche. The U.S. has a strong infrastructural specialty market that ranges in depth from old Mom and Pop retail office supply stores to department store marketing of such products. Office depot has also seen the simultaneous growth of other one stop office supply stores in the 20 years it has been operating. Additionally, as a result of the expansion to the international market the domestic market may have been limited, in the way of resources for marketing and development. This work will attempt to outline ways in which the domestic market share can be improved over the foreseeable future.
As the fierce existing and new competition in the office supply industry continues to make inroads into sales of new office products, and especially large contract sales to businesses there needs to be a clear direction for the development of the Office Depot brand in the U.S., beyond the limited domestic growth that has been seen over the last few years. The overall market has been challenged in that specialized products, beyond those items that an individual can purchase in a department store, such as ink and toner supplies have been sold aggressively by direct marketers, and many department stores have expanded sales to large ticket office items such as office furniture as well as computers, printers, digital cameras and other items that have largely been held captive by office supply specialty stores for decades. The market has had significant changes in the manner in which it sells to customers, as the growing home office and small business boom has created a systems where smaller customers dominate the market and large all inclusive box stores (such as Office Depot), after having successfully wrestled large corporate contract accounts from the traditional office supply stores now must seek to heavily expand in small scale sales to individual small business owners. To do so they must continue to expand into the convenience market, locating stores close to other retail resources, especially in strip malls and areas where consumers can continue to do multi-faceted shopping, to compete with department (discount) store markets, which are frequently in the same locations. Office supply sales are driven largely by convenience, as the purchasing of such supplies is often done, especially in small businesses on an as needed basis, and the need arises frequently, mid task, creating a need for prompt delivery of services and supplies, rather than on a price comparison model, such as what might happen when supplies are purchased in bulk. (Brillion Market Analysis “Office Supply Stores” at (http://www.ci.brillion.wi.us/comdev/MA_Sec6_officesup.pdf) the office supply store must be located conveniently and be distributed internally in such a manner that buyers can rapidly find needed merchandise, even when the customer is not familiar with the store. The customer must leave the store feeling as if he or she has always been able to find and purchase, goods at a fair price, or they will not return to such a store, especially if they are able to find office supply items in other locations, just as easily and also for a fair price. Office supply stores, such as Office Depot are poised to take advantage of the demographic changes that have occurred in business, as more and more small businesses dominate the market, as well as continue to grow business contract sales and as in the case of Office Depot market internationally, from a growing international infrastructure, of global market shares. The online market is also substantial, and will continue to grow as more and more individuals become comfortable with the purchase of such goods online.
Office Depot has a significant online presence that will aide in growth and cost cutting, as many services and products are available online at over 50 online locations that serve both international and domestic markets. ODs current financial condition is considered strong, though more emphasis must be placed upon domestic sales, as the infrastructure is now in place for international sales and can now easily be maintained. The 2007 early look gives the stakeholder a better idea of the overall market condition of ODP and can clearly explain the current market trend as well as the future market needs that ODP must essentially be a huge part of if domestic sales becomes the new, needed focus of the company.
Price/Cash Flow 9.7
Dividend Yield %
S&P 500 data through 08-15-07 (Morningstar “ODP” Stock Report at (http://quicktake.morningstar.com/stocknet/Snapshot.aspx?Country=USA&Symbol=ODP)
Total sales for the first quarter increased 7.3% over the year-ago period, driven by a strong performance in the International division. International sales grew 21% (11% in local currency) from the same year-ago quarter, while the North American Retail and Business Solutions divisions increased 3.2% and 2.9%, respectively. Retail sales growth was fueled by 16 new store openings in the quarter, as comparable-store sales, or comps (sales from stores open at least a year) fell 3% over the same year-ago period. Weak comp growth for the quarter was attributable to the delayed release of Microsoft’s
MSFT Vista operating system (consumers postponed high-ticket computer purchases until the Vista release) as well as disruptions stemming from store remodeling. The company plans to open 150 and 200 stores in 2007 and 2008, respectively. While aggressive store openings may help fuel top-line growth, we are concerned about potential market saturation considering the store growth from rivals Staples
SPLS and OfficeMax
The firm’s operating margin (excluding one-time charges) increased to 5.8% in the quarter from 5.5% in the same year-ago period. The company’s new store format (80 stores were remodeled during the quarter) has proved to be more efficient and helped trim costs at the retail level. Increased private label penetration (now approximately 20% of retail sales) has also helped boost profitability. In the North American Business Solutions division, which accounts for about a quarter of total revenue, the operating margin sank, primarily due to problems related to the integration of its Allied Office Products acquisition. We don’t expect to see much operating margin expansion in the North American Business Solutions division over the next few quarters. We think the firm will likely struggle to leverage its operating costs given the weak sales growth we are predicting from the softening in business spending and decline in furniture demand. In the International division, the firm’s operating margin was roughly flat over the same quarter last year, which is impressive considering the investments the company is making overseas to position itself for future growth. We expect slight overall margin expansion over the next couple of years as the company continues to trim costs in its Retail division, and gains efficiencies from its recent investments overseas. (Morningstar “Is Office Depot a Buy, Sell or Hold?” At (http://quicktake.morningstar.com/stocknet/DynamicStock.aspx?Symbol=ODP&Country=USA&referid=A1951&pgid=SU3&vurl=http%3a%2f%2fquicktake.morningstar.com%2fstocknet%2fMorningstarAnalysis.aspx%3fSymbol%3dODP%26Country%3dUSA)
The current scene demonstrates that ODP must be aggressive in cost cutting and must also pay close attention to expansion models, especially with the expansion models of other similar retail outlets, as such outlets could saturate the market and create situations, such as those seen in the last few years with ODP having flat sales, or declining sales at locations that have been open for over a year.
Refocusing on the market share of the domestic small business must occur over the next five years, possibly in the form of restructuring the existing business to better meet the needs of the domestic small business. As part of cost cutting, which is the current market suggestion for the ODP reevaluating store locations and seeking suppliers with lower cost on bulk items, and specialty direct sale items must be the overall concern (Morningstar Financial “Office Depot” at (http://quicktake.morningstar.com/stocknet/Snapshot.aspx?Country=USA&Symbol=ODP) Taking the existing focus off international expansion, and offering competitive small business contracts and discounts for bulk purchases may be one key, but most importantly the OD must continue to expand its retail market to convenient locations, possibly closing some locations that are not located in competitive areas, such as close to discount department stores and one stop shopping centers. (Morningstar “Office Depot” at (http://quicktake.morningstar.com/stocknet/Snapshot.aspx?Country=USA&Symbol=ODP)
One option could be for office depot to streamline sales to just a few online locations, linking market seekers to a few key websites that offer a very large product base for sale. Yet, to continue domestic market growth and potentially increase domestic sales OD must focus on impulse shoppers seeking to purchase small quantities for small business, and offer items for individual sales, in very simple formats. The inventory of a large one stop brick and mortar store must be expanded, without the loss of key, potentially outdated supplies, while still offering competitive prices on staple supplies. OD must continue to aggressively market the convenience and ease of their stores, with highly effective and informed sales associates that can easily step away from their post to rapidly find the items the customer is seeking. It is crucial to the domestic market that OD offer prices and locations that effectively compete with the expansion of office supply sales into large discount department stores and much better prices on bulk staple supplies, such as paper, pens, and printer supplies, that larger discount department stores offer, to keep the customer buying such supplies in the OD store, rather than in other locations. It must be clear to the customer that support is offered in the store that is not offered in discount department stores and variety that is not offered in old school office supply stores, as they hold on to the last of their large contract sales. To expand further, OD must aggressively address their direct competitors by offering services that others do not, keeping inventories high and support for outdated products available, when small businesses are unwilling to upgrade. Essentially, in order to garner the aggressively sought after market share in the domestic market, ODP must continue to market aggressively while limiting expansion and ensuring cost savings over the long and short run. The industry standard has been to keep expanding on a rapid franchise model, such as is seen in other impulse market systems, like small scale restaurant and beverage industry leaders. The problem in the market is that the recent potential for market saturation, is intense and ODP must respond to this potential by cutting costs and limiting expansion to areas where replacement of non-earning stores can be done, such as in the case where moving an existing location to one that can generate greater sales through exposure.
Brillion Market Analysis “Office Supply Stores” at http://www.ci.brillion.wi.us/comdev/MA_Sec6_officesup.pdf
Morningstar Financial “Office Depot” at http://quicktake.morningstar.com/stocknet/Snapshot.aspx?Country=USA&Symbol=ODP
Morningstar “Is Office Depot a Buy, Sell or Hold?” At http://quicktake.morningstar.com/stocknet/DynamicStock.aspx?Symbol=ODP&Country=USA&referid=A1951&pgid=SU3&vurl=http%3a%2f%2fquicktake.morningstar.com%2fstocknet%2fMorningstarAnalysis.aspx%3fSymbol%3dODP%26Country%3dUSA
Get Professional Assignment Help Cheaply
Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?
Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.
Why Choose Our Academic Writing Service?
- Plagiarism free papers
- Timely delivery
- Any deadline
- Skilled, Experienced Native English Writers
- Subject-relevant academic writer
- Adherence to paper instructions
- Ability to tackle bulk assignments
- Reasonable prices
- 24/7 Customer Support
- Get superb grades consistently
Online Academic Help With Different Subjects
Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.
Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.
While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.
Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.
In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.
Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.
We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!
We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.
Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.
What discipline/subjects do you deal in?
We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.
Are your writers competent enough to handle my paper?
Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.
What if I don’t like the paper?
There is a very low likelihood that you won’t like the paper.
- When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
- We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.
In the event that you don’t like your paper:
- The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
- We will have a different writer write the paper from scratch.
- Last resort, if the above does not work, we will refund your money.
Will the professor find out I didn’t write the paper myself?
Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.
What if the paper is plagiarized?
We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.
When will I get my paper?
You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.
Will anyone find out that I used your services?
We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.
How our Assignment Help Service Works
1. Place an order
You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.
2. Pay for the order
Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.
3. Track the progress
You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.
4. Download the paper
The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!