Case Study 2.1

Running Head: CAN TECHNOLOGY SAVE SEARS? 1

CAN TECHNOLOGY SAVE SEARS? 6

Can technology save Sears?

Prof. Svetlana Mitereva

Abstract

Every business operates in its own way to sustain its position in the marketplace. Although companies undertake rehauling strategies or adopt information systems, sometimes these might not translate into competitive advantage. This case study portrays the reasons why a largest retailer in United States, Sears Holding Company, has eventually lost its ground to discounters such as Walmart and Target even after it has invested heavily on Information Technology.

In the business world, some things happen each day and shape the future of the existing companies as well as that of incoming companies. This case study is about the American retailer known as Sears, which has ever existed as the largest retailer across the nation. At some point, the company had some command on the gross national product for the nation. However, due to some constraints across the economic and technological changes, the company’s leadership in the industry has become an issue. It has been dwindling over the recent past, thus losing ground to other stores such as Target and Walmart. The two are discount stores who have gained command the United States retail store industries. Besides, other specialty retailers such as Home Depot as well as Lowe’s are now gaining popularity at the expense of some of these oldest companies such as Sears.

Sears noted that there were things that were a miss. In this, it means that the company was moving in the wrong direction in terms of growth and commanding the competitive lead in the industry. Such a development is a trigger to a range of investment, especially on technology that the company has recorded over some years back. The company has seen some investment in information technology as it seeks to mend the situation. The technology is a way of ensuring that the company salvages the sales and has created a better outlook across the range of areas. In essence, the technology invested here matched that of Boeing Corporation or cross to those of computer firms. It is with this technology that other retailers would acquire the knowledge of doing business. As it invested in technology, the other organizations in the same industry would always get through the same means with a straightforward and direct strategy that was not even costly as per se. They would prove to be much competition in terms of implementation, as they would do it at a very much lower cost. In such cases, therefore, competitors across the United States would ride over the company, thus becoming more competitive than Sears. They would lower the prices of their goods and hence command a good lead in terms of customer bases.

Though the focus of Sears is the acquisition of technology, the strategy seems not to work out in terms of gaining a competitive advantage. The company has not been able to reduce their cost structures despite being unbeaten in technological development and using it to drive the customer to a particularly new way of buying. Their upgraded systems have helped reduce the paperwork and even make it very simple to work out in the point of sales terminals. It has created robust ordering systems and managed to have strong warehouse systems. They brought in the online order systems as well as home delivery, thus growing strength that most of the retailers have taken time to implement. However, the operating costs have been skyrocketing over the years, thus allowing the competitors to command the market in a significant way. There are issues on the management as well as the organization forecast. The technology is not as important as minding the customers in the best way possible.

There are some good indicators that something is not as expected or as per the forecast in the organization. At first, the company hoped that by developing the new technology, it would be possible to attract more customers and increase their sales. However, despite the investment in massive modern technologies, there were no significant changes in sales. Instead, other companies in the industry seemed to overtake the organization in terms of sales and their appeal to consumers across different areas of society (RAJAGOPAL, 2018). . The fading of the brand as the psychical storefronts and the e-commerce platforms continue to record fewer sales is a clear indicator that something is not happening as per the expectations. Polls are showing that there is more preference of other companies in general and specialty retail stores across the country. The other companies are becoming technology bases, and it has become evident that the retailer is declining at a very high rate to the point that it is becoming the lowest company in terms of sales.

Information systems are a crucial tool in enhancing business processes (Laudon and Laudon, 2016). The primary purpose of applying the information system would be to improve organization performance. The purpose of any strategy taken by the company would be first to have an understanding of social and behavioral theories of the consumers — the way people behave and socially interact will define how they support the economy. The deployment of technology in the company is not an accurate indicator that the people will shift their focus and buy more from the company. It is not a reliable indicator that they will change their behavior in terms of buying habits. However, the company will have good command in the investment but on the other hand, without weight, the necessary theories it will become an issue to tease the existence of the company in the long run.

With the theories in mind, some areas need some improvement to help the company get back to the feet after a devastating competitive period. The company manufactures the business without consideration of the image with any much involvement of the brand and not has a real mirroring of the stores as well as their marketing. The focus on any improvement would be to change the behaviors and the habit of buyers. This should be a wholesome action rather than focusing on just a single area such as the use of technology. As the management, the first thing that comes to mind would be to appeal to people and especially the baby boomers and the millennial. However, they have continued to decrease in numbers despite technological advancement. Any solution, therefore, must be appealing to society and must have an actual command on their behaviors and the way of living. It would be necessary, therefore, to use the behavior model to change the way people react to changes within the organization.

Sears has, for some time, struggled to go beyond the competitions from other companies. With the increase in the entrants and the substitutes as well as the command of other big competitors, it is hard to keep an eye in the competition; however, the company is struggling against most of the other industry players. The restructuring of the supplier system in purchasing and less focus on technology would be a great solution to the company. Such reorganization would have gone hand to hand with technological advancement. It was supposed to increase the customers shopping experience and thus change their habits. It would be a simple way to reduce costs and make it much useful (Blitz, 2016). However, this was ineffective for Sears since they never appealed to the mind due to choosing the wrong method or failure to apply the right theories. It was early to have such significant investment without performing the necessary due diligence regarding the company market.

It would be necessary, therefore, to study the market and the probable customer bases. With the study, it would be required to understand the essential things about the market and even try to put it as a priority. Involving consumers in giving feedback on any investment would be necessary before performing any investment. It would be required to have several options from the consumer replies and comments. With this, the organization can weigh in several options and select the most promising in terms of reducing the cost of operations as well as sales prices. The consumers can assess such selection through the resulting profits as well as acceptance. It would be necessary to acquire time to time feedback from the vast of consumers and ensuring that the information given becomes a recipe for any new development of changes. Documenting the assessment information would go a long way in changing the organization.

In conclusion, technology alone will not be enough to save the Sears Company. They need to appeal to the public and constitute of customers not only through the technology but also through a vast of other areas. The technology would only be as a backup to the marketing as well as cost reduction. The company needs not to ignore the theories as well as consumer feedbacks as they will help design the best strategy. With the necessary procedure, it becomes of much importance to grow the company to great heights.

References

Blitz, A. (2016). Beset by the digital revolution successful retailers embrace technology that enhances customer value. Strategy & Leadership, 44(6), 16-24.

Laudon, K. C., & Laudon, J. P. (2016). Management information system. Pearson Education India.

Laudon, K. C., & Laudon, J. P. (2015). Management Information Systems, Global Edition. Pearson Education UK.

RAJAGOPAL., (2018). CONSUMER BEHAVIOUR THEORIES: Convergence of divergent perspectives with applications to. Place of publication not identified: BUSINESS EXPERT Press.