Making Sense of Sears’ Strategy
Communication is not Sears Holdings’ strong suit, according
to William Dreher, an analyst at Deutsche Bank AG. The problem with Sears’
secrecy is that no one — not customers, analysts nor other stakeholders —
seems to have a clue how it intends to reverse the annual sales slide that
has been dragging down the business.
"Their strategy is not traditional,” Mr.
Dreher told Medill
Reports. “They make little to no effort to communicate
what that strategy is."
According to Medill, Sears saw
sales decline 3.1 percent in 2006, 4.5 percent in 2007 and 11 percent last
year. At the same time, the company has seen its margins remain in a holding
pattern between 23.36 and 28.66 percent. These margin percentages are below
comparable chains in the department store sector.
While Sears is trying some
new things, there are signs that Mr. Dreher and others find worrying. He pointed
to a lack of new designer lines in Sears’ locations and online, a failure to
invest in the business and the long empty CEO position at the company.
Not having new lines
coming into the store has lead Mr. Dreher to conclude that “brands don’t
want to do business with Sears." He also believes the company is
"all focused around assets and not around operations."
Not all subscribe to
the theory that Sears is not differentiating in the market. Ayat Shukairy,
managing partner of Invesp Consulting, told Medill, "They
are trying to position themselves as a retailer that is the one-stop shop for
all the family needs. Although Target and Wal-Mart still provide the grocery
element, Sears has also carved the niche of providing large appliances in addition
to toys, clothing, electronics, etc. That’s a big distinction that sets the
Discussion Questions: What, do you think, is Sears’ strategy? Is it
enough to differentiate itself from competitors and grow its business at the