Dynamicity of a Business Environment

Running head: STAPLES CASE
Staples Case
Name of the student:
Name of the university:
Author note:

1STAPLES CASE
Table of Contents
Response to Question 1:..................................................................................................................2
References........................................................................................................................................4

2STAPLES CASE
Response to Question 1:
Staples, founded by Stemberg began its operations around 1986. Thirty years later since
Staples came to existence it became the leading retailer in the office supplies industry. Staples
saw its ups and downs face during those thirty years. The 2008-2014 period particularly was very
challenging for Staples. Their profitability was affected by intense price war competition with
the rivals. It faced rising competition at that time from the likes of Wal-Mart, Amazon.com and
Costco. The changing dynamics of the business environment over time and intensifying
competition in the industry compelled Staples to look for a deal to merge with Office Depot, its
biggest rival (Hill, Jones & Schilling, 2014).
When Staples began its operations in the US in 1986, the ‘Upstream Value Chain’
segment of the market had the manufacturers ranging from small to large sizes. Some of the
notable names in the list of manufacturers were Boise Cascade, pencils and pens manufacturers,
office furniture makers, the Bic Corporation, 3M, Xerox, Canon, Compaq, Apple and Hewlett
Packard. It also had the wholesalers. Some of the wholesalers were highly reputed such as
United Stationers and McKesson. The wholesalers used to sell directly to businesses or through a
network of dealers. The market had both the large and small-size dealers. The industry had local
retailers in the office supplies business. Besides, it had the discounters in the general
merchandise segment like BJ’s Wholesale and Wal-Mart (Hill, Jones & Schilling, 2014).
With regards to the consumer segment, they could buy either directly from the dealers,
the wholesalers and the manufacturers. The dealers had no good measure of what customer
likes the most about this industry. Around ninety percent of the dealers considered better service
as being the reason to buy. However, close to ninety percent of the customers claimed that they
went for lower prices. Despite being very low in analytic capabilities, the retailers, dealers,

3STAPLES CASE
wholesalers and manufacturers enjoyed being a part of the 'Office Supplies’ industry (Hill, Jones
& Schilling, 2014).
Stores used to happen in a cluster form in a region. The purpose of such a setup was to
be the most reachable and dominant supplier in the market. Companies used to focus on one or
more regions and develop stores as clustered together to remain the most dominant player in the
regions. Such a clustered arrangement was supported with distribution systems located centrally
(Hill, Jones & Schilling, 2014).
The ‘Office Supplies’ of 2015 is very different from those of 1986. There is growing
demand for toner cartridges, computer and printer supplies due to the increasing integration of
businesses with the IT firms and the growing impact of industrial automation on the industry.
Suppliers had their best time one or two decades back. They had a hard time in 2015 as their
profitability declined significantly. Many retail stores disappeared from the industry. Price still
remained the decisive factor for consumer decision-making. Manufacturers one or two decades
back used to focus on one or a few regions to run stores set up in a clustered format; however,
the year 2015 saw manufacturers looking for increasing geographic coverage
(Interact.gsa.gov, 2020).
The globalization of business resulted in suppliers looking to sell ‘office supplies’.
Suppliers tend to expand their capabilities through M&A (Mergers & Acquisitions) to attract
more contracts from globally situated buyers. The market for ‘office supplies’ was very
fragmented in 2015. It had considerably a low maturity level outside North America and Europe
(Interact.gsa.gov, 2020).

4STAPLES CASE
References
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: Theory & cases: An
integrated approach. Cengage Learning.
Interact.gsa.gov. (2020). Retrieved 1 February 2020, from
https://interact.gsa.gov/sites/default/files/Attachment%206%20-%20Office%20Supply
%20Market%20Outlook.pdf