I picked this topic and my topic is income inequality. My argument is that income inequality causes high rates of morbidity.

September 7th , 2016

Table of Contents

I. Abstract …………………………………………………………………………………5

II. Introduction ……………………………………………………………………………. 6

A. Overview of the company ……………………………………………………... 6

B. History and Management of the company …………………………………….. 6

C. Mergers and Acquisitions of the company ……………………………………. 6

D. Current company status ……………………………………………………….. 7

III. Problem Statement …………………………………………………………………….. 8

IV. Vision ………………………………………………………………………………….. 8

V. Analysis ………………………………………………………………………………... 8

A. Why SWOT and PESTEL analysis is used? …………………………………... 8

B. PESTEL analysis ……………………………………………………………... 9

i. Political ……………………………………………………………….. 9

ii. Economical …………………………………………………………… 9

iii. Social …………………………………………………………………. 10

iv. Technological ………………………………………………………… 10

v. Environmental ………………………………………………………… 11

vi. Legal ………………………………………………………………….. 11

C. SWOT analysis ……………………………………………………………….. 11

i. Strength ………………………………………………………………. 11

ii. Weakness …………………………………………………………….. 12

iii. Opportunity …………………………………………………………... 12

iv. Threat ………………………………………………………………… 13

VI. Recommendations and Implementations ……………………………………………. 13

A. Lack of proper knowledge on better investment plans …………………… 14

i. Develop an understanding over the existing

Performance of the company for a better investing plan. …………. 14

ii. There are many reasons for merger failures

But ergonomics plays a vital role in it.

Establishing healthy cooperative approach,

Understanding both sides perceptions,

Avoiding hostile behaviors and

Making early agreements plans

Lay grounds for a successful merger. ………………………………..14

iii. Save a room for regular expenses so

They do not go out of control. ……………………………………….15

B. Insufficient experienced work team on retailing

And unsystematic departments. ……………………………………………..15

i. Assess your existing team and talent for

The requirements for cutting costs on unnecessary man power. ……15

ii. Hiring experienced work team for

Boosting crucial divisions is

Important also maintaining articulated

Departments make work easy and effective. ……………………… 16

iii. Assigning supportive teams for department

Head is a beneficial backup to any organization

At any point of time. …………………………………………….... 16

C. Poor strategic communication among employees ……………………….. 16

i. Having a proper preparation over selling

Strategy by the employees is important for better sales. ………... 17

ii. Motivating the staff and making them analyze

The trends will help bring back the lost

Commitment also sharing ideas from

The ground level workers at times help

In upliftment of the company. ………………………………….... 17

iii. Appreciation, recognition and credit

Reward serve in maintain a healthy

Employee-employee and owner-employee relations. ………….... 18

VII. Importance of the project to the company ……………………………………………. 18

VIII. Projections and Benefits ……………………………………………………………… 18

IX. Conclusion …………………………………………………………………………… 19

X. References ……………………………………………………………………………. 20

Abstract

Sears Company is a world renowned retail giant. First, the paper discusses about the overall economic impact on the company due to poor investment plans, lack of proper internal communications and weak employer-to-employee relationships. Later, a detailed SWOT and PESTEL analysis has been performed, and further paper presents recommendations for the individual problems. The paper concludes with the benefits ensured with the level of economic security granted for the company based on the recommendations. These recommended suggestions will give a deeper insight into individual departments for a better functioning and development.

Introduction

A. Overview of the Company

Sears officially known as Sears, Roebuck & Co. is a giant in retailing industry. It is an American based holding a chain of department stores. It mainly deals with hardware, appliances and clothing. The company was co-founded by Richard Warren Sears and Alva Curtis Roebuck in 1886. Its headquarters is located in Hoffman towers in Illinois. In terms of domestic revenue, Sears was the largest retailer in United States until October 1989 when it was overcome by its greatest competitors Walmart and Target.

B. History and Management of the company Sears

There were times in American retail history when people had no idea about Walmart or online sales in amazon.com, be it clothing or hardware or groceries or just about anything people turned to just one store, Sears. Sears was reputed retail mart running successfully since 1886. It had very successful history which made few of the renowned companies merge their ways in building growth. Its stock traded more than $100 which attracted many tenants’ from trendy and vibrant malls. Having started selling goods in malls for the first time in 1893 founded by Roebuck. In 1896 it started featuring a wide variety of items from apparel to automobile. The increasing importance of the company invited many brand launches through the years like Kenmore appliances in1913 and Craftsman tool brand in 1927. Adding a feather in its cap, it launched its first retail store in a Chicago mail-order plant. Later in the coming years, sears had a flourishing history with Allstate insurance offices inside sears store and by 1945 it has seen a tremendous rise in its annual sales. In 1973 it opened the world’s tallest building Sears’s tower holding 110 floors. (Lochner, 2016)

C. Mergers and Acquisitions of the Company

In an $11 billion dollar deal merging Kmart which will give rise to the third largest retailer in America, Sears’s holdings. Chairman of Kmart also sears holdings Edward Lampert is going to run both the retail houses, under his watch over the two companies gave competition to each other reaching for the best. He was successful in reaching his target in achieving better efficiency, marginal scale and distribution, as the merger of the companies were expected to bring around $500 billion annually. Kmart made a tragic decision to cut costs close to Walmart’s famous “everyday low price”, but by doing so, took on huge losses and sold items well below cost. This resulted in a lack of liquidity and the ending resulting in bankruptcy. Hedge funds started studying the value of Kmart’s distressed assets, but none had the capital nor the confidence to amass bonds. Lampert saw synergistic opportunities with the M&A of Sears and Kmart. By so doing, Sears would reach its target audience, while Kmart would be expanding their business through Sears and attain a more favorable cost structure. (Sandra, 2002)

D. Current Company Status

Recent reports made says that, acting head of sears automotive Joe Finney is all set to make changes in the section, trying to restructure the company to bring back its lost image and glory.

Over the last 5 years, Holdings’ net income has generally declined due to falling gross margins and inability to reduce selling, general, and administrative as quickly as revenues have fallen. Gross margin has generally trended downward, falling from 27.7% in 2007 to 25.5% in 2011, adjusted to exclude onetime charges and non-operating income, has also trended downward from 4.8% in 2007 to 0.7% in 2011. Accounting to previous marginal scales and administration, considering what suits best for customers and applying strategies in developing with the customer needs is going to be the missions’ statement to start the race. (Zielasko, 2012)

Problem Statement

The inefficiency of the organization in handling the issues like, lack of proper knowledge on better investment plans, insufficient experienced work team on retailing and unsystematic departments and poor strategic communication among employees brought about a significant financial burden on the company. The analysis followed by the recommendations are a hope to bring about a positive impact on the economic standards of the company.

Vision

The vision of the company is to overcome the drawbacks noted and regain the lost recognition in retailing, as the nation’s fourth largest American chain of departmental stores in providing quality products and services with a blend of technology and experience.

Analysis

The term analysis is defined as the process of breaking up a concept, proposition, linguistic complex, or fact into its simple or ultimate constituents (Robert Audi).

Philosophical analysis is a method of inquiry in which one seeks to assess complex systems of thought by ‘analyzing’ them into simpler elements whose relationships are thereby brought into focus (Thomas Baldwin).

This paper is a report on SWOT and PESTEL analysis of SEARS Company.

A. Why SWOT and PESTEL analysis is used?

SWOT analysis is important for knowing a company’s internal strengths and weaknesses which help understand the internal strategic framework, also it analyses the external factors like opportunities and threats it has from the outside market.

PESTEL analysis is another important tool to analyze and monitor the external market environment and categorize the threats and opportunities that will have an impact on the company’s performance. PESTEL analysis lays a groundwork for assessing SWOT analysis.

B. PESTEL Analysis

Understanding the environment of a business requires knowledge over key factors and trends in the current society. This analysis gives classified information of Political, Economic, Social, Technological, Environmental and Legal environments of a country effecting a company. The PESTEL analysis of Sears Company is as follows:

Political:

In 2010, the United States Supreme Court announced several long outstanding decisions restricting the political spending activities. The Court’s decision made on Tillman Act of 1907 that first limited political spending in corporate section. Establishment of the new rule where companies are allowed to spend unlimited funds on individual expenditure to support or not a candidate.

Sears Corporation’s spending policy on politics, allows the company to support in political campaigns to help a candidate get elected, also, The Company makes contribution to state level candidates as well as state retailing communities. Sears has contributed nearly $900,000 at state level and $237,000 to 527 associations since 2002 election cycle.

Economic:

Sears company has been and will have an effect by the worldwide economic conditions; economic crisis leading to failure of the economy, sustaining the market for recovery, decline in consumer-economy levels and other prevailing market conditions, including inflation, can lead to loss in revenues and gross margins.  Other external economic factors include consumer and commercial credit availability, consumer spending levels, inflation, employment, consumer debt, fluctuating fuel costs and many more economical conditions. These economic conditions have a huge negative affect on the income levels, credit availability to customers, which leads to decrease in demand for merchandise.

Social:

Sears Company employs majority population in United States after its competitor Wal-Mart. According to survey in 2011, Sears hold around 280,000 employees n United States and in related territories. The company received a 100 percent rating by Human Rights Campaign for maintain Corporate Equality Index, in the year 2009 for the fourth time in a row, adding to the success, it renounced for one of the Best Places to Work for LGBT Equality, that was published by the Human Rights Campaign, in 2009.

Technological:

Significant advancement in technology is a necessity in today’s market, Nevertheless, to sustain the markets profitability and competition keeping ahead with the technology is important in this competitive environment. Sears Holdings in the beginning of the e-commerce era failed to mark its brand due to lack of online market strategy and poor website designing. New interactive web sites provide driving tools giving customers a voice to share ideas, interests and personal experiences in making smarter purchasing decisions (Reuters, 2009). It has started technology leadership development program (TLDP) for the professionals. Corporation should focus on hiring the best and brightest talent, and rapidly developing the staff for future business leaders.

Environmental:

Sears Corporation has always been an active member in environmental saving to reduce its impact on the society by limiting the resources like the usage of water, recycling wastes through recyclable products and bags, consuming solar energy to reduce its usage on traditional energy sources. Company won the United States Environmental Protection Agency (EPA) National Building Competition in 2010 (EPA, 2010). The Sears Full-line store located in Maryland is placed second in the U.S. Environmental Protection Agency (EPA).

Legal:

Keeping track on the legal aspect of the external factors will allow Sears and Kmart to focus on its company strategy without unnecessary deviations. In the past records the company dealt with jurisdiction liabilities with the acquisition companies. Sears has to take better steps in extending their term goals and clear acquisition records.

C. SWOT Analysis

It is a widely used technique, especially by managers to sort the strengths and weaknesses persisting in a company, strength and weakness of a company are calculated as internal factors, while the threats and opportunities prevailing from the outside market are considered external constraints. SWOT analysis for the SEARS Company is as follows:

Strength:

Sears hold a strong retail market in the industry and made a mark on its brand. It is the leading market in departmental stores. Sears Corporation is the leading home appliance retailer along with a huge share in tools, lawn and garden equipment, consumer-demand electronics and automotive repair and maintenance all over United States. The company’s key brands include Kenmore, Craftsman and DieHard, also a broad apparel share, extending its brands such as well- Lands' End, Jaclyn Smith and Joe Boxer, also the Apostrophe and Covington brands. It stands ninth in retailing in United States, enjoying highest annual revenue leaving behind its greatest competitors trailing Wal-Mart, The Home Depot, Costco, Target, CVS Caremark, Walgreens, Kroger, and Lowe's. It is listed number 48 in the Fortune 1000 companies list. It extends its business network in United States and Canada.

Weakness:

Lack of knowledge in investment plans has set a great drawback for the duo after the merger of Kmart and the Sears, Roebuck and Co. The Corporation has faced consistent declines in its revenues. The year after its merger, the income plunged to 84% from $858 million (Daniels, 2011). The cost cutting structure in order to save the extra penny brought about a huge variation that resulted for a net loss of $170 million at the end of the April quarter. The haphazard department distribution and the less skilled staff in retailing add to the drawback.

Opportunities:

Sears Corporation has its outlets spread over US, Canada and Puerto Rico. There is a huge development in the yet to be developed countries like China, Japan and India, where there are numerous advantages in investing he business. These markets show a great potential in the market growth and render success to the companies operating at their places. Sears always had an extending hand in improving its market, so business operations carried at these markets, is likely to bring success to the company. Present American market is booming in health care related brands, Sears can think of extending the business in health sector too, which will increase the company’s market share. Sears almost have its share in all brands and labels, the fact that, reorganizing the present assets and assess them for a better monitoring and maintenance.

Threats:

In this fast growing technology, new companies are burgeoning every now and there making the market flood with brands. For obvious reasons globalization of the companies is bringing competition in the markets. Local companies take a great deal in setting their brand yet there are always threats from international companies to take them over. The biggest threat faced by Sears Corporation is the competition among the local, national and international retail companies. Moreover, the mergers and acquisitions are an internal threat to a company at any given situation. Recession faced by the economy is another threat to the market. Having a better understanding over the company and the market strategy, will help sustain the threats.

Recommendations and Implementations

The recommendations suggested for the organization has been identified after an effective research over the departments that are being dragged down due to few problems in the respective areas. Referring to the study on its downfall this paper lists out the problems and recommended implementations for better functioning of the store. The paper came up with three sustaining problems that are list below, the recommended problems are:

A. Lack of proper knowledge on better investment plans

B. Insufficient experienced work team on retailing and unsystematic departments

C. Poor strategic communication among employees

The problems have three suggested implementations each for every problem. Following these implementations will bring about a positive change in the development of the organization.

Implementations for the Recommended Problems

A. Lack of proper knowledge on better investment plans: Develop an understanding over the existing performance of the company for a better investing plan. (Sandra, 2002)

i. Having Lack of industry knowledge and poor market strategy stand important in making your future investments. First, one has to know their own business standards as to where they stand in the market, know your administration and marketing value. It is very difficult for a single person to handle all the departments, so list out the departments one can work better and identify the sections in which help is needed , so that can assist help in the respected areas. Second, maintaining your financial record is important so that a person will have a better knowledge as to how much one can invest and what should be the return benefits for successful running of a company. Third, investing all your money in a single place is trouble. Fourth, Try reducing costs, invest in funds with low costs. Tiny investments with a proper knowledge will make a big difference overall. Finally, knowing your competitors adds to your research on investment, gaining edge over them by knowing your market value as a whole and with fragmented sections is important. (Noreen, 2012)

ii. Along with knowledge of the present status of the organization it is equally important to know the ergonomics of the organization too. Ergonomics play a vital role in any organization, besides that, due to the number of mergers and acquisitions, ergonomics had its impact due to unstable management. Establishing healthy cooperative approach, understanding both sides’ perceptions, avoiding hostile behaviors and making early agreements plans lay grounds for a successful merger. (Kester, 2016)

iii. Above all, saving a room for regular expenses should be monitored so they do not go out of control, eventually, having a proper knowledge of the current status and better management of the departments will give rise to accurate management in savings department. Proper records over each and every department, further, appointing heads to the individual departments will make work more accessible and easy for reviewing. This way, the faults in a department are known at the very beginning stage of the product cycle which will reduce cost in designing the whole product again. Also, the staff movement within the departments and different stores (due to mergers) give rise to unnecessary charges. (Beals, 2006)

B. Insufficient experienced work team on retailing and unsystematic departments: Without knowing where the company stands in the race for market place, there is little scope that the organization hire employees with the required standards needed. (Wallace, 2013)

i. Therefore, assessing the existing team and talent for the requirements for cutting costs on unnecessary man power. The already present staff will have a benefit over the ones that get recruited, as they know the company better, it takes days to know a work place, and so that waste of time can be calculated along with the expenditure on hiring man force. Therefore, assessing the present staff as to where they stand and getting to know their needs so that they can serve better towards the company. Appointing a head to each department and making him know his staff’s problems or any technical skills that they want to incorporate will have a better result. This way it makes employees to know about his peer’s problem and will plan for themselves in sorting the issue. Cutting costs on new employment will reduce with minor expenditures like training the present staff, replacing default machines and staff meetings. (Ledimo, 2013)

ii. Now that the existing staff has been scrutinized, it makes it easy to identify which department is lagging, so hiring experienced work team for boosting crucial divisions is easier, also maintaining articulated departments make work easy and effective. Recruiting just the needed will reduce unnecessary costs too. The overall staff management can now give a better scope to the newly employed, in a way that they can assist with little waste of time and can identify the faults quickly giving way for better development in a better and faster way. (Young, 1964)

iii. Furthermore, assigning supportive teams for department head is a beneficial backup to any organization at any point of time. It makes the organization to reflect on the issues as fast as possible, also, looking at an issue in different perspectives is important in picking the right decision. Head of the department must carry the qualities like assigning positions to relevant staff, make the staff work towards a goal, reaching the goal within the specified time constraint and most importantly, have a good interaction with coworkers so they will not fall back and motivating them to attain new enthusiasm towards work area. (Danielsen, Valle & Stene, 2014)

C. Poor strategic communication among employees: Once the required staff is elected and assigning heads to every department, equally important is establishing friendly atmosphere for the employees, and to attain this communication strategies among employees have to be established. (ANDERSON, 2013)

i. Motivating the staff and making them analyze the trends will help bring back the lost commitment also sharing ideas from the ground level workers at times help in upliftment of the company. As described earlier, the head of the department has to conduct group meeting where employees get to know each other and share their experiences. Learning new advancements will increase the enthusiasm, therefore, educating the employee towards the latest trends in the economy which helps the organization will bolster them in making work easy, as well as, increase enthusiasm toward new technology. (Temminck, Mearns & Fruhen, 2015)

ii. Work Groups and Teams in Organizations: It identifies key issues needed among the work groups. A better understanding towards team composition can serve as an effective tool in selecting and forming effective teams. Procedures could be designed to produce the optimal blend of employee characteristics including hiring new staff or firing older ones, training current workers. Although past work data provides us with valuable information as to managing team composition and working approach, a better solution can be adopted like, the most skilled employee should be selected for the team. Focusing on different levels is important in identifying combined team responses that represent a broad range of disparate and complex patterns of individual action, and are not simply the sum of the responses of team members. Similarly, it is important to determine when the responses of individuals are part of combined team response, and when they are simply individual responses. Finally, a key issue concerns how to represent interactions of individual team members over time for higher levels of analysis. (Zalesny et al., 1995)

iii. Furthermore, appreciation, recognition and credit reward serve in maintaining a healthy employee-employee and owner-employee relations. At the end of the day, any employee works towards any of the three reasons, and these three are the driving forces for an employee. Appreciation over good work and rewarding them for their hard work is important in an employee life cycle. (Hart, 2012)

Importance of the project to the company

This project gives an understanding over the issues and the possible solutions recommended helps find faults in the respective departments and articulates the need for improvisations in their respective working structure. For example, to overcome the problem in work force organization, suggestions are given on communication between the decision maker and all stages of the company. The recommendations are significantly essential to an organization in today’s rapidly changing, extremely competitive and global environment. The managers in the organization should be in the front line in implementing the recommendations so as it ensure their success in the company

Projections and Benefits

i. Provide improved productivity and efficiency in the delivery of services in the company.

ii. Effective communication allows for well-informed decision making as well as employee motivation as they can air their issues with the managers.

iii. Training of personnel increases their capability to handle issues in the business as well as enhances their productivity and efficiency.

Conclusion

The project gives a brief explanation of the problems faced by the organization in different departments. The project also offers recommendations and implementations steps through the discussion. This study will also be helpful in understanding the drawbacks in their company such as, where they are lagging behind and how they can rectify thus scaling themselves for a better performance position. Among the things discussed are also analysis over the decision making factors which have an influence on the success of the company, the strengths, weaknesses, opportunities, and threats through the SWOT analysis and other global impacts through PESTEL analysis.

The paper also explains the challenges which helps with the recommendations made and how they need to be implemented. Eventually, companies could encourage improvement in variation thus becoming more proficiency and profitable.

Based on the research, the future benefits of will be based on the recommendations made. However, the recommendations should be followed by implementations and use of the right steps to implement. They are expected to bring enhancements of its operational. This will create a good will in the long run and employees will also feel motivated to work for the company. By enhancing operational and technical services at the company, the employees will feel motivated thus contributing to the growth of the company. By following the above recommendations and implementations, the company's management efficiency will be strengthened, and revenue will increase up to 2 million dollars, which is 30% within a span of 25 months.

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