1. Synopsis Sears, the well known department store chain has experienced change more often than ever in the recent times. The company went through the change in order to strengthen its traditional business and divest other retail segments. But each and every time the change program proved to be ineffective looking at it from long term perspective. 2. Issues The major issues of the case are: • Was it a good idea to appoint someone who is not from the company itself to the post of CEO? After Martinez became the CEO he decided to target the “middle-American mom”. Was it a good strategy to only target a particular segment of the customer? • When the first strategy failed was it wise on the part of new CEO to bring up a strategy to focus more on the hard-good retail products only? • Was the company aware about the intense competition prevailing in the market? Did the company give due consideration to its competitors while formulating the strategies? 3. Facts and Analysis It is a well known fact that change is inevitable for any organization.
But saying that is as also important to know about the major causes that have brought about the need for the changes to be made. In the absence about the knowledge of the causes the change program that takes place cannot be effective enough. In this case also we can see that Sears has undergone various changes from time and again. But I think that no any effort has been made on the part of the management to find about the major reasons that has been contributing to the fact that the company has not been doing good lately.
From the case it is clear that Sears needed to implement the change program because it was losing billions of dollars due to decrease in the amount of sales. This was the trigger that initiated the change. When the new CEO was appointed he made about various changes in the organization. These changes were the focus areas. But the problem here was that the focus of the change program was concentrated only on the “middle-American mom”. The main problem of the change program not being successful lied at this point.
Because the focus area was not appropriate the consequences that followed were not on the positive side from Sears’s point of view. Being a department store chain it must have a wide variety of products. Because whenever someone thinks of a department store than the thing that comes into mind is a place where you get a wide range of products. So Sears decision to flood the store with women apparel was a decision that did not fit into the concept of a department store. This decision also meant that Sears was creating an image of a store only for women.
This affected the company as a whole because other customers besides women were not keen to shop at Sears. So that’s the reason why the success of this strategy had a short life. It would have been better if Sears had formulated a strategy that targeted the whole of American population as a whole. By doing so the company is not limiting its target customer. Hence it has a better chance to succeed in the long run. Unfortunately for the company when this strategy failed and a new CEO was appointed he too followed with the same kind of mistake.
He suggested to only focus on hard-good retail products. The long run success of this strategy certainly would raise some question marks. 4. Recommendations • The company should have employee development programs in place. It should groom its employees from within the company for higher level posts. A person who has been working in the company is more likely to come up with solutions that best tackles the problem as s/he is familiar with the mechanics of the company. • Sears should streamline the retail and services operations to focus on nly those that generate good profit and have a long term potential for growth. But this does not mean that Sears should focus on only one line of products. It should include a wide range of lines in this matter. This means that the company should do fewer things in a better way and not a single thing in a better way. • In today’s world people have become more and more busy. They don’t have time to plan for a shopping. For people like them the best alternative would be to shop online. So, Sears should get more deeply into the online business.
For the online shopping to be effective it should design new features to improve the online shopping experience of its customers. • It is difficult for a single person to look after all the line of products that the company sells. So the CEO should make certain capable person from within the organization as the head of various departments that would look after a certain range of products. For this the heads would work in accordance to the overall strategy formulated at the top level management. By doing so the company can give equal importance to a variety of product lines.