Assignment 1 Case Study: Sears Roebuck and Co.

Submitted to Ireen Akhter Course Instructor, Human Resource Planning (H604)

Submitted by Damil Alam Prakash ZR-37, MBA-47D

Institute of Business Administration, University of Dhaka September 29, 2013

During their lifetime, Sears has changed their business strategies according to their understanding and the requirements placed upon them by the external environment. In this case, some of the major changes are identified. On this paper, I will try to illustrate how each of their strategic changes match with the generic strategy types. Event Startup Richard Warren Sears and Alvah C. Roebuck started Sears, Roebuck & Co. 1888 Sears published Catalogs to market their product Impact This helped Sears grow by splitting the managerial pressures between the two directors. Incremental Growth Their catalog business set them (Corporate Growth Strategy) apart from the competition and thus propelled them forward. This resulted in market dominance for almost all of the 20th century. Incremental Growth Their retail stores consolidated (Corporate Growth Strategy) their market dominance as a corporate retailer and helped in complementing their catalog promotion and sales as a distribution hub. Broad Diversification Strategy Sears increased their portfolio (Business Strategy) and thus their business which helped them boom during the mid 20th century. Acquisition This was done to feather the (Corporate Growth Strategy) troubles that Sears was facing in its retail business. Joint Venture They did this diversification in (Corporate Growth Strategy) order to feather the troubles faced in their retail business. In the long run, it did not help them much. Incremental Growth In addition to their acquisition (Corporate Growth Strategy) and joint venture, they did this to further support their troubled retail business. Divestiture This helped them minimize loss (Corporate Restructure from retail sales as well as focus Strategy) their marketing effort. Acquisition Sears acquired this in order to (Corporate Growth Strategy) support their gradually falling retail business. But, this venture did not prove to be successful. Generic Strategy Type Joint Venture (Michael Porters Generic Strategies)

1925 Sears started opening retail store.

1930- Sears diversified into insurance

1981 Sears Acquired Dean Witter Stock brokerage, 1984 Sears formed a joint venture with IBM to start Prodigy

1985 Sears diversified into Credit card business

1993 Sears stopped producing catalogs. 1996 Sears acquired hardware chain Orchard Supply Hardware

1997 Sears started their home improvement store the great outdoors

Incremental Growth (Corporate Growth Strategy)

2000s - Sears applied Shop Your way reward program on their retail stores.

Broad Diversification Strategy (Business Strategy)

2003 Sears sold their retail credit card business to CITIBANK 2003 Sears opened Sears Grand stores

Divestiture (Corporate Restructure Strategy) Incremental Growth (Corporate Growth Strategy)

This was done to support their retail chain with diversified products but it did not succeed to the level that sears planned for. Like other diversification strategies, this could increase their marketing effectiveness provided that they had ample managerial capacity to apply the program. This minimized their liability and focused their business efforts. Sears broaden their horizon for retailing which helped them compete against competition like Walmart. As Sears management was not capable of surviving, Kmart purchased it and turned it around into a profitable venture.

2004 Sears was acquired by Kmart

Divestiture (Corporate Restructure Strategy)

Common Business Definitions

Difference in companies doing international business
International business can be differentiated into four different categories. They are: International Company: These types of companies are importers and exporters. They have no investment outside their home country. Bangladeshi local garments companies such as Bextex Ltd, Viyellatex ltd. can be considered as prime example of international company. Multinational Company: These companies have investment in other countries, but they do not have coordinated product offerings in each country. They are more focused on adapting their products and service to each individual local market. Their marketing efforts are often tailor made based to fit the host country culture. Global Company: Global companies have invested in and are present in many countries. They market their products through the use of the same coordinated image/brand in all markets. Generally one corporate office that is responsible for global strategy. They emphasize more on volume, cost management and efficiency. Their marketing activity takes a global view that goes beyond national boundaries. Transnational Company: Transnational companies invest in foreign operations, have a central corporate facility but give decisionmaking, R&D and marketing powers to each individual foreign market.

Difference between international business and international markets:

International business refers to the overall activity of carrying business beyond national borders. These activities normally include the transactions of economic resources such as goods, capital and services comprising of technology, skilled labor, transportation etc. They also include international production. The production may embrace either production of physical goods or provision of services. International marketing is an important aspect of international business. This includes business activities designed to plan, price, promote and direct the flow of a company's goods and services to consumers.

Difference between Optimization and Satisficing

Satisficing Satisfycing is the practice of meeting the minimum acceptable performance standard. Optimization: Optimization refers to the practice of finding the best possible solution to any given problem situation. Difference: The core difference between these two practices is in the approach towards a particular problem. The optimizers will try to maximize the efficiency and effectiveness in utilizing resources to meet objectives. On the other hand, satisficers will try to surpass the set minimal performance standards within their allocated resources. Thus, they will not target any alternate route to improve their current solution if their current solution meets minimal standards. Definitions and interrelations between product class, product line and product item. Product Line: Product line refers to a group of products that are closely related, either because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges. Product class: Product class refers to a group of product that may be substitutable between one another for the same purpose of use. Product Item: Product items are individual products that have its own distinct attributes. These attributes are different from other product within the company in at least one aspect.

Modes of Entry into international Markets

Based on the level of risk associated with them, the parent companies can follow 6 different modes of entry into international markets. They are: Indirect Export: The market-entry technique that offers the lowest level of risk and the least market control is indirect export, in which products are carried abroad by others. The firm is not engaging in international marketing and no special activity is carried on within the firm; the sale is handled like domestic sales. Direct Export: In direct exporting, the firm becomes directly involved in marketing its products in foreign markets, because the firm itself performs the export task (rather than delegating it to others).

Assembling:

Assembling is a compromise between exporting and foreign manufacturing. The firm produces domestically all or most of the components or ingredients of its product and ships them to foreign markets to be put together as a finished product. Licensing: Under licensing strategy, the parent company gives the foreign company the right to market their product under their brand name for certain period of time. The foreign subsidiary produces the product according to specification of the mother concern. Licensing agreements are usually non-exclusive for a given market. Franchising: Franchising is a type of license that a party (franchisee) acquires to allow them to have access to a business's (the franchisor) proprietary knowledge, processes and trademarks in order to allow the party to sell a product or provide a service under the business's name. In exchange for gaining the franchise, the franchisee usually pays the franchisor initial start-up and annual licensing fees. Franchising agreements are usually exclusive for a given market. Joint Venture: Joint venture is a form of foreign investment where parent company has a equity position in the foreign entity which wishes to produce and market product in any foreign country. Foreign Direct Investment: In this arrangement, the international firm makes a direct investment in a production unit in a foreign market. It is the greatest commitment since there is a 100% ownership.

Mission Statements:
MRC-Mode Limited Research Industry MRCM renders a comprehensive package of research service to various organizations which range from designing and implementing the study, analyzing collected data, to producing quality results that facilitate the client organizations to take significant decisions/actions. IDLC Non-banking financial institution We will focus on quality growth, superior customer experience and sustainable business practice PRAN Fast Moving Consumer Goods We strive to generate employment and earn dignity & self respect for our compatriots through profitable enterprise. Square Pharmaceuticals Pharmaceuticals Our mission is to produce and provide quality & innovative healthcare relief for people, maintain stringent ethical standard in busi8ness operation also ensuring benefit to the shareholders, stakeholders and the society at large. Mercantile Bank Bank We will become the most caring, focused for equitable growth based on diversified deployment of resources, and nevertheless would remain healthy and gainfully profitable bank.