Staples Case Study Essay

653 Words3 Pages
Staples Case Study Questions 1-6

1. In 1985, the office supplies industry was highly fragmented with many companies manufacturing unique products rather than a broader based catalog. Larger wholesalers were few, so consumers had to order supplies from several companies rather than from one immediate location. New technologies were also finding their place into businesses such as personal computers, fax machines and copiers. This created a demand for a wider variety of office supplies. Economically, the country was turning itself out of a recession and many small businesses were born from major layoffs in the early eighties. These companies needed a quick and reliable way of purchasing supplies.
2. The general retailing industry was
…show more content…
5. Upon its launch Staples faced a few problems from both a managerial and organizational aspect. First, it was difficult for Staples to locate prime real estate at an affordable price in the markets it desired. It was their business focus to open large superstores in large markets such as Boston, New York City, Philadelphia, etc; they would however find out that those areas were very expensive to rent. Staples had decided to, against the will of a few of the venture capitalists, to open a distribution center in Connecticut to support its stores. This allowed them to open smaller stores and supply store inventory for its distribution center. This saved on rent and also labor. Another challenge the company faced was establishing funds to open its first stores. Stemberg had marketed his business idea to various venture capitalists however they were valuing his company at $6M and thus wanted a 67% stake in the company for a $4M investment. He was able to persuade Bain Investment Group in the offset and the others followed. He was able to compromise and the VC’s received a 54% stake in the company.

6. Although the competition became fierce within a few years of startup, Staples was able to emerge as the industry leader. One innovative idea that allowed them to do

More about Staples Case Study Essay

Get Access