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Case Analysis : Office Depot

In: Business and Management

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Office Depot – 2011
External Audit Opportunities 1. Gift card popularity increase of 7.3% in specialty retail during 2009. 2. Online sales increasing faster than traditional retail sales. 3. World economy is slowly on a rebound. 4. "Emerging economies" have accounted for nearly 70% of world growth in the last five years. 5. Value of the USD decreasing by .07 in long-term over the last five years against the EUR. 6. OfficeMax reported negative net income in 2008 and 2009 with marginally positive net income in 2010. 7. Staples has Debt of $2.54 billion. 8. CEA projects a 6.0% increase in electronics sales for 2010 and a 3.5% increase in 2011 (to $186.4 billion). 9. 5 yr. average ROA for OfficeMax is -4.93 compared to -2.93 for Office Depot. 10. 5 yr. average ROE for OfficeMax is -21.61 compared to -7.91 for Office Depot.
Threats

1. Staples' EasyTech support service offering. 2. 86% of companies plan to spend more on social media in 2011 for marketing and customer service. 3. Staples has, as of 2009, 954 more retail stores worldwide than Office Depot. 4. 5 yr. average ROA for Staples is 8.89 compared to -2.93 for Office Depot. 5. 5 yr. average ROE for Staples is 16.38 compared to -7.91 for Office Depot. 6. Unemployment rate continues to be just below 10%. 7. Consumer spending has been flat over the last 2 years. 8. National customer satisfaction has been flat over last 2 years. 9. Staples had sales growth of 5% in 2010. 10. Staples has around 20 standalone Copy & Print stores.

Competitive Profile Matrix

EFE Matrix

E. Internal Audit Strengths 1. Acquired Swedish office supply company Svanströms Gruppen. 2. Most North American retail stores contain a Copy & Print Depot. 3. Total general and administrative expense decreased by 17%...

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