Strategic Analysis of Functional Areas: Skype and Sears Case Study

This case study analyzes the functional areas of Skype and Sears, two companies facing significant challenges in their respective markets. Skype, a pioneer in VoIP technology, confronts increasing competition and the need for innovation in marketing and operations to maintain its market share. The analysis emphasizes the importance of adapting to market changes, improving the freemium model, and conducting customer research for effective product development and pricing. Sears, on the other hand, undergoes a turnaround strategy, focusing on strategic planning within HR to gain a competitive advantage, enhance marketing efforts, and improve organizational culture. The study underscores the need for both organizations to adopt future-oriented strategic planning across marketing, HR, operations, and finance to ensure long-term sustainability and success. The case study also provides an overview of the companies' financial performances, highlighting the need for strategic adjustments to improve profitability and market relevance.

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Introduction
There is the need for Sears and Skype as organizations to make improvements in
the functional areas. To ensure they remain relevant in the business environment, they are
required to monitor the marketing, HR, operations, and finance of their organizations.
The functional areas need strategic reasoning which means that they should be future
oriented.
Functional Areas in Skype and Sears
Skype is faced with competition from rival organizations. Other companies have
emerged that similar offer products and somewhat improved as compared to Skype. The
organizations in emergence are a current threat to Skype. With the current market
saturation where VoIP has become diffused within the market, there is a need for the
organization to look for more viable options.
Marketing: Skype and Microsoft have to look at developing their products and
services. Innovation will enable Skype’s survival as their customers have accused the
organization of failing to innovate. Innovation will help Skype to survive the intense
competition. Modernization will allow the organization to adapt to changes in the future.
For marketing to be successful, it will require that Microsoft and Skype focus on
creativity and innovation. Innovation will create a competitive upper hand of the
organization (Laudon and Laudon 2016,p.4).
Operations management; The freemium model should be updated and improved
to suit the current needs of the customers.

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Finance; Skype and Microsoft need to conduct market research on the needs of
their customers. The study will enable them to determine the suitable models of the
product. The cost and sales price of the established and innovated outcomes will have a
decision on making profits about the value as well as the rate of the products and services
(Hill, Jones, and Schilling, 2014,p.6).
Sears Holdings Corporation had a turnaround strategy hence the merger. They
faced stiff competition in the market by other similar organizations. Operating profits
declined dramatically. The returns on equity shares as well as returns on assets decreased
rapidly in value. The company experienced a poor financial performance ( Laudon and
Laudon, 2016). For Sears Holding Corporation to gain a sustainable competitive
advantage, they have to implement strategic planning in the HR department. They should
look at the organization’s demand for human resources with specific expertise. The HR is
responsible for teaching its workers in the corporation on how to operate sufficiently to
satisfy the customers (Hill et al., 2014,p.4).
Marketing: Sears should consider improving on organization's creativity as well
as innovation to have a competitive advantage over other giant organizations in the field.
Sears are required to engage in customer orientation, desegregated marketing attempts
that leads to profits. When Sears focuses on innovation, they will provide the market with
advanced products and services and secure more chances of boosting profits and ensure
proper performance (Laudon and Laudon, 2016,p.6).
Organizational culture: the behavior is an essential factor in the organization.
The cultures in the organization help the managers to oversee the companies in such as a

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manner as to ensure success in the organization. To achieve the objectives at Sears
Holdings Corporation, they should be future oriented. Sears must have a plan and plan
effectively by putting the required resources in place to ensure that they achieve the long-
term goals (Hill et al., 2014,p.4).
Conclusion
To achieve the final goal of Skype and Sears, the four functional areas of the
organizations require consideration. The organizations should focus on the future through
strategic planning. Planning for the future is essential for development as well as the
preservation of the organizations.

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Reference:
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: 11th ed.
Boston: Cengage Learning Publishers.
Laudon, K. C., & Laudon, J. P. (2016). Management information system: 9th ed. Upper Saddle
River: Pearson Education Publishers.