Staples Case Critique

1484 Words Apr 26th, 2015 6 Pages
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
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The critique team would add that there is likely to be cannibalization of the catalogue business because the models are so closely-related. Staples should commission a study to find estimated rates of cannibalization so that an orderly response can be implemented.
The analysis team is also correct that Staples.com should focus on market share over wallet share. The market is very large and growing fast. The critique team would add that by capturing online market share ahead of competitors, Staples.com can reduce the cost of overcoming competitor customer loyalty in the online market. The switching cost will still be absent for many customers that are new to the internet office supplies market.
The critique team would add that Staples’ catalogue business increased wallet share by a factor of three. This is the very business that will likely be cannibalized in the ordinary course of business by opening the online store. Staples should not spend too much money on trying to increase wallet share when it will likely be transitioning between business units. However, Staples should still take the opportunity to market services as a way to expand customer wallet. All marketing expenditures on promoting new services market share will spill over into wallet share. Any wallet share campaign on services should be lower priority than market share marketing.
3. Do you think that Staples.com