Sears Holdings Corp. (SHLD) SWOT Analysis, Porter's Five Forces Analysis and Recommendations

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Our recommendation is to take Sears Holdings Corp. (SHLD) private through a private equity buyout. After doing so, we recommend implementing a centralized management structure and recruiting retail-savvy executives for the upper management team. We then recommend focusing on increasing value by capitalizing on SHLD’s real estate holdings through leasing agreements and increasing partnerships with complementary enterprises. Also, we recommend improving employee retention rates and retaining exclusive rights to private brands. Finally, we recommend focusing on a long-term strategy to continue to maximize SHLD’s ecommerce platforms. We believe these recommendations will lead to long-term stability through increases in customer base and…show more content…
Additionally, Sears’ inventory turnover is equal to 148 days, which is more than 2x the industry average of 65 days. Finally, Sears Holdings’ quick ratio is .20, which indicates potential for a liquidity crunch because its liquid assets cannot pay off its current liabilities in a crisis. Opportunities One of the opportunities for SHDL to explore is to expand in to other nations, particularly emerging markets. Another opportunity is to expand is to accelerate the growth of SHLD’s ecommerce programs, which only represents 3% of its revenues, especially as the industry is slowly shifting from brick and mortar to brick and click format. Lastly, SHLD has an opportunity to lease floor space out to companies who can increase traffic into the store. Threats One threat to SHLD is its competition with many retailers because it is not very differentiated from its competitors and lacks brand loyalty, thus nothing is stopping the customer from overlooking Sears and visiting a rival retailer. Another threat is a downturn in the economy which could wreck havoc on SHLD’s financial position. Porter’s Five Forces Analysis Threat of new entrants is relatively low. There are high barriers to entry in the discount retail market, including high capital costs, limited access to investors, and a largely crowded-out market place. Threat of substitutions

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