A Recent Change Within Staples Inc.

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2. SITUATION ANALYSIS – WEAKNESSES In a recent change within Staples Inc. they have begun to shut down 140 of its 330 stores located across North America under scoring the pressure that big box retailers feel from rival e-commerce and discount players. With the end of the plan resulting in 225 stores being closed down as a choice of Staples trying to reduce their square footage. Due to this change within the company Staples Inc. must take in to account what this change will do to their company’s infrastructures, price, services, and its reputation. An effect from this down size that Staples Inc. many weaknesses have arose within the company itself that should be taken into consideration before they become a major threat to the company.…show more content…
The fact that Staples has shut down some of the infrastructures has taken a direct deduction from their income. Staples reported $96 million in net income, a figure that marks a 43.5% decline over the prior-year period and resulted in earnings of 15 cents per share. These results include tax charges as well as expenses related to the closing of 16 stores during the quarter; excluding these one-time charges (McGrath, 2014). Even though technology does play an enormous role in our lives, infrastructures still are important and do appeal to all generations because it is a physical building where we can all find what we are looking for or at least have assistance in doing so. In addition, another weakness would be the pricing of the products. Now that Staples has adapted to selling their products mostly on their online stores, many customers might have the issue of paying not only tax but also shipping and handling as well. Paying tax is already one of the big factors of buying anything, especially in the province in Ontario since we are known to have one of the highest tax rates in Canada. As said by Forbes Magazine Staples decreased 10% part of that reason is from foreign exchange rates. Having shipping and handling as a new factor can cause more decrease in income annually over the years. With competitive pricing being used as an advantage it will still not be enough to drive the company’s growth (McGrath, 2014). Even
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