Introduction
Office Depot is a company that was established in 1986 to deal with the industry of specialty retails. Company’s headquarter is based in Boca, Florida United States, and is headed by the company’s president and CEO Neil Austrian. The main operation of the company is to provide services that entail office supplies.
This paper aims to provide an insight of the measures that should be taken in order to increase the profitability of the Office Depot Company. To do this, it requires reviewing the SWOT analysis, Marketing Strategies, and Ansoff matrix to come up with the appropriate approach to change the ineffective strategies.
SWOT analysis
Strength
- The Office Depot is well established and has strong strategies concerning marketing and advertising through different channels.
- The company has robust, developed and expanded portfolio regarding the supplies in various offices.
- The company has also developed an effective and easy to access website that provides the services fast and efficiently.
- The company has an effective and efficient management team that ensures that their duties and that of the subordinate team are appropriately performed.
- The Office Depot is in the frontline of the companies that have a well-built financial position.
Weaknesses
- Some of the promotional strategies such as ads via online services adversely affects the sales of the company’s services since, thus have undesirable impact on the company.
- The company focus to the international market is significantly low, hence affecting the sales of the Office Depot Inc.
- Office Depot Inc. has a very limited cash flow which has a deteriorating position in the market concerning the liquidity flow.
- The company is not well developed in the diversification of the business and this places the company into a position that it cannot effectively develop.
Opportunities
- The company is in a position to focus and improve the trading of products and services through online services with an aim to improve the promotional strategy of the company.
- The Office Depot should also diversify the business by inventing new and improved products and also enhance the prevailing condition.
- The company has a capability to expand its business operations through merging the small firms or acquiring local and international markets.
- The company should also engage itself in different initiatives that can enable it to attain the long term objectives of the company through implementation of its strategies and plans.
- The Office Depot Inc. should acquire high quality raw materials to enable it to produce high quality and favorable products and services.
Threats
- The company is faced by the major threats that experienced in United States such as less economic growth and fluctuation of the currency.
- The company is faced by the problem of minimizing cost since the labor cost is high enough to increase the profitability ratio since decline in growth.
- The market is invaded by the increasing discounter retails and the hypermarkets that adversely affect the sales of the company.
- The production of the company is affected by the cheaper and poorly developed technology that is used within the company.
- The prices and costs that are stated by the company’s main competitors such as Staples are significantly low, hence making the company’s products and services less affordable to the consumers.
Marketing strategy
Product development
The company has not been left behind in finding the possible innovative solutions to the customer needs or the customer problem. The company has shown its environmental commitment by developing the environmental strategies that makes their product environmental friendly. For instance, Office Depot has emphasized on replacing of the heavy cardboard boxes with the lighter boxes to make it simple to deliver supplies to their institutional clients. This approach was seen as hitting two birds with one stones since the company reduced the packaging cost and also attracted their potential customers (McDonald, Malcolm, & Meldrum, p. 10). In addition to the product development, the company has developed a variety of office products that effectively meets the consumers’ expectations (Trebilcock, p.20)
Pricing
Office Depot Inc. offers reasonable and affordable prices to meet the needs of the consumers in the office supplies industry. However, the price offered is relatively high compared to the company’s competitors such as Staples, OfficeMax and Walmart among others (McDonald, Malcolm, & Meldrum, p. 149).
Promotion
Office Depot marketing strategy is dominated by the sales promotions and partnership conveyed through FSIs, Newspapers, event and online sponsorship. Among the promoted partnerships include joint promotion with Foot Locker where consumers spending over $30 are promoted with 20 percent off at Foot locker, and consumer spending $30 was discounted $10 off at Office Depot.
Distribution channels
The Office Depot is recognized as one of the largest suppliers of the office products, and is also the leader in all of the distribution channels in the industry. The distribution channels of the company involve direct mail, stores, internet, contract delivery and business-to-business electronic commerce. In additional, the presence of the “Shop now” icon on the company’s website had made it easier and convenient for the consumers to purchase their products from all corners of the world. The company is also applying the robotic system to manage and monitor order fulfillment in all of its distribution channels and not just direct-to-consumer. This entails bulk delivery and store replenishment across to their consumers.
Ansoff’s Matrix
Conclusion
Through the above analysis, Office Depot Inc has to focus on adopting new strategies and improving the existing ones as a vehicle to achieve significant sales hence sustainable profit. The company can use apply the highlighted opportunities in the SWOT analysis to overcome their weakness. As the market strategy indicates, the company has to reduce the prices of their products below or the same as their competitors to impress their customers and effectively penetrate through the market. The Ansoff’s matrix indicates that the major driving force towards the growth of the business is the use of the internet. Therefore, the management team should effectively embrace the information and technology to achieve the growth of the company.
Works Cited
McDonald, Malcolm, and Mike Meldrum. Marketing in a Nutshell: Key Concepts for Non-Specialists. Oxford: Butterworth-Heinemann, 2007. Print.
Office Depot, Inc. Swot Analysis. Cleveland: Datamonitor Plc, n.d.. Print.
Paley, Norton. The Manager's Guide to Competitive Marketing Strategies. London: Thorogood, 2005. Print.
Solomon, Michael R. Conquering Consumerspace: Marketing Strategies for a Branded World. New York: AMACOM, 2003. Print.
Trebilcock, Bob. "Modern Material Handling." Office Depot's Flexible Automation (2010): 20-25. Web. 7 Jan. 2014. <http://www.kivasystems.com/media/53701/mmh1008_flexible_automation.pdf>.
