What you talkin’ about Willis?

In our class we talked about different operations management strategies to help businesses be more efficient and improve overall performance. Most of the concepts seem to be simple to implement and are common sense, thats why it is hard for me to belive that some managers and/or CEO’s can make such bad management decisions that they can destroy giants such as Goldblatts, Woolworth, and now Sears. Over the course of the last decade leading up to the failure of the now Sears Holdings Corporation, there are several factors that can account for the steep decline of this once retail superpower. Next to the obvious culprit, the economic downturn, there is also Sears’ failure to adapt to changing markets and its failure to modernize its marketing strategies. Since 2009, Sears has made significant changes to its marketing strategies in an effort to make up for lost ground but it may be too little too late. The economic recession has hurt the retail industry as a whole, but the negative effects have been even more devastating for the already struggling Sears. Edward Lampert, who purchased the company in 2004, was thought to have been the answer to Sears’ woes. But according to Zac Bissonnete, “[Lampert’s] rigid focus on financial metrics, while putting aside… branding and marketing” may have perpetuated Sears failure. Lampert’s move to merge Sears and Kmart was once hailed as genius but continuing declines in both stores have proved otherwise. Lampert may need to cut his losses with Kmart and focus on rebuilding Sears. As one analyst notes, “Turning around one troubled brand is tough. Turning around two in the same category is impossible.” Edward lampert was supposed to turn things around at Sears but either he is purposely driving Sears to the ground or he is really daft. Either way he could stand to take an Operations Management class at DePaul. Sears was once a store that differentiated itself from its competition by selling brands that were exclusive to its stores. But, in an effort to be more like its competitors, Sears changed its strategy, which hindered sales. In 2008, Jack Trout notes that “people went to Sears to buy Kenmore appliances, Craftsman tools, and DieHard batteries… In recent years though there hasn’t been much in the way of brand building coming out of Sears.” Now consumers can go to Wal-Mart, Home Depot, or online and get the same products for the same price, if not cheaper.
In the Washington Times article by Andrea Billups, customers speak fondly of the inexpensive, trendy clothing they were able to purchase at Sears. The article goes on to say, though, that this is not the general opinion of Sears. They claim that other brands like Target were more successful in making buying cheap chic by partnering with popular designers. One final problem Sears has faced is with the brand itself as a product. As mentioned earlier, Sears does not make an effort to keep its stores updated and the shopping experience itself is not special. At a time when competitors like Target and Wal-Mart work to make bargain shopping an experience, Sears has dropped the ball. Its sad that all it would have taken to save Sears is attention to its operations to keep the retail giant alive but now instead we are about to witness the disappearance of another great Chicago business and look at at skyline that features the Willis Tower.

10 thoughts on “What you talkin’ about Willis?

  1. I think your article did an excellent job of explaining how Sear’s was mismanaged. I really think it comes down innovation, which you touched on. As other stores continued to respond to their consumers, Sear’s kept a similar model. This has led to them to be out of touch, and have poor product line. I wonder if losing the Sear’s tower hurt them further?

  2. I agree with what you said how it seems like many managers/CEO’s just make mind boggling decisions and destroy the company yet get over paid by millions. I did a report on Kodak last year, and that company is in such disarray due to its lack of innovation and mismanagement that it is very close to not exist anymore.

  3. I would very much agree, its becoming more and more apparent in which various managers and CEO’s are making erratic decisions, and in return taking a huge payoff. Such decisions create downward slopes for companies and don’t allow them to innovate with the times. Its becoming more and more frequent in which CEO’s are more concerned with the amount of ‘zeros’ that are behind a paycheck vs. the health of a company.

  4. I agree with the previous comments. I believe that in order for any business to survive and succeed, they need to keep up with the times and provide consumers with the innovations that they have come to expect. Strategies that were once very successful no longer translate or make sense in a business environment like today. It is essential for companies to consistently innovate and provide consumers with not only quality products, but also with the experience that they want

  5. I agree with all of the comments above. The lack of innovation at Sears was not beneficial. With a little bit of motivation and leadership, Sears could have and should have been on the right track, doing well in sales, especially for the kind of store that it is. I also agree that the CEO made bad decisions that hurt the company and didn’t really foresee how his actions would alter the company in a negative way.

  6. Everyone knows that CEO’s get paid WAY more than they are actually worth. I remember reading about an article about a business that went down because of the mistakes that its CEO made, and he was getting paid over 30 million a year! Despite when they found out they were loosing money, he was getting paid that much! Unbelieveable!

  7. Its unfortunate that Sears may be facing its possible demise but they dropped the ball. It all comes down to the leadership and their ability to keep a competitive advantage in the market. It seems as though Lambert had a very one dimensional approach to managing Sears. You did a good in referencing to how the economic downturn added to the woes that Sears was facing. As the smoke clears and the economy slowly recovers, there are retailers still standing because they decided to adapt. Sears failed to do that and they stuck with their antiquated strategy which now may be the reason why they’re facing extinction.

  8. I would agree that the retail division of the Sears empire has definately declined; however, I would lable this situation a failure for Sears at all. On the contrary, I would lable Sear’s current situation a success. After giiving the history of Sears a quick skim, it seems to me that from 1935 to 1980 the company effectively expanded its retail division, just as planned. In 1980, the company made it clear that it would begin to shift its operational focus towards the financial industry, instead of the retail industry. At the end of 1992, after at least four company acquisitions from the financial industry and at least two newly created similar subsidiaries, Sears reported fifty-nine billion dollars in revenue, just as planned. Despite this success, Sears began to sell off or transfer these investments away almost instantly. These stock sales and stock dividends began in 1993. From then on, Sears reportedly began to focus on its retail division once again. However, its desire to rid itself of its numerous physical locations still remained, as it is speculated that Sears is attempting to strengthen its online presence.

    Therefore, while I do agree that Sear’s traditional retail division has declined, I do not agree that this can be labled as a failure. From my understanding, failures are not intended. In my opinion, Sears has been intending on ridding itself of its traditional retail division for decades. In support of this viewpoint is my own personal experience with the company. While this is only speculation, as a small child in the third grade I participated in a Sears child modeling club and can remember their emphasis on the possibility of their catalog services being largely reduced and live modeling shows being strengthened.

  9. Sears has not necessarily failed; if it had, it’s threats to leave Chicago would not have been taken seriously by municipal officials as it would have met its demise without the government sacrificing millions in a tax break. Sears’ primary problem appears to be its brand management strategy: it attempts affordability and trendiness without making the necessary compromises in order to merge the two concepts. It could function similarly to Walmart, where price leadership is the main value proposition or focus more on the shopping experience, like Target. Sears, however, is doing neither of these. Its operational focus is unclear, which executives only noticed when it began to affect the bottom line; by then a quick turnaround was impossible.

  10. I agree that the Sear’s holding company operational focus in unclear. With that said I find it hard to understand the rationality behind the large tax cuts the company receives. Why should the state and city continue to cut taxes at the expense of the taxpayers when the company continues to shut down stores and has made cutbacks of employees? The city and the state have given the company an opportunity to become a Target or Walmart, I think it is time the company reevaluates it management positions.

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