Sears Inventory

687 Words2 Pages
bulb-icon

Recommended: Case study on factors affecting inventory management

Sears Inventory
Sears is a large retailer with approximately 1320 stores spread across the United States and Canada and it sells merchandise ranging from home goods to automotive products (Sears, 2014). At some point during the last few years Sears made changes to its inventory policy and actually alienated its longtime customers by failing to keep adequate stock levels of popular items on hand. One of the biggest problems with Sears is that it does not appear to be investing in its stores or maybe it’s not financially capable to do so (Perlman, 2011). It is possible that the inadequate stock levels at Sears is just a financial problem as a result of sluggish sales, but every good business should know that it is necessary to spend money in order to make money.
Inventory Levels
Sears took a beating during the 2013 holiday season with sales plummeting by roughly 9.2% in terms of comparable sales (Cheng, 2014). I believe the drop in sales can be directly tied to the inability of Sears to maintain adequate inventory levels. It is common sense that when an item is out of stock or unavailable that consumers will take their business to stores with items that are in stock. Sears used to have the largest market share of home appliances in the United States, but has steadily been losing ground and becoming more and more irrelevant (Cheng, 2014).
This was experienced first hand by my family approximately six months ago when our refrigerator failed suddenly and with out warning. My wife and I ventured to a Sears store to look at new refrigerators and found several models that we liked only to learn that every single refrigerator that we liked was either out of stock or on backorder and would not be available for several weeks. Wi...

... middle of paper ...

...

References:
Cheng, A. (2014). MSN Money. Sears plunges on ugly holiday surprise. Retrieved from. http://money.msn.com/top-stocks/post--sears-plunges-on-ugly-holiday-surprise Farzad, R. (2014). Bloomberg Business Week. A guerrilla stock analyst plays mystery shopper at sears. Retrieved from. http://www.businessweek.com/articles/2014-01-30/a-guerrilla- stock-analyst-plays-mystery-shopper-at-sears Harbour, S. (2014). Chron. The advantages & disadvantages of economic economic order quantity. Retrieved from. http://smallbusiness.chron.com/advantages-disadvantages- economic-order-quantity-eoq-35025.html Perlman. S. (2011). NBC. Sears holdings struggles to hold on. Retrieved from. http:// business.nbcnews.com/_news/2011/12/27/9740808-sears-holdings-struggles-to-hold-on Sears. (2014). Sears holding corporation. Retrieved from. http://www.searsholdings.com/
about/sears/

Show More
Related

  • Opossumtown Case Analysis

    732 Words  | 2 Pages

    By lowering selling prices across the board, Opossumtown, Inc. reduced its inventory turnover ratio, cutting the number of days to sell inventory from 174 days to 104 days; that is a 40% improvement. Opossumtown, Inc. also cut the number of days it takes to collect its credit accounts from 68 to 44 days, again that is 35% better than the previous year. The company is able to do this while cutting its debt ratio by 10% and increasing its current ratio by 25%, making it appear more favorable in terms of liquidity. As promising as this may look, this is not the whole picture. Opossumtown, Inc. shows an 11% decline in gross profit as well as operating income ratios, and a 3% decrease on the profit margin ratio. The decline of these ratios is a result of the company’s new strategy of decreasing the selling price and increasing its marketing and selling expenses. Opossumtown, Inc. made some noteworthy advancements with the implementation of its new plan for 2014. However, based on the assessment of the balance sheet, income statement and the ratios, the corporation did not achieve its goal to increase operating income by 6% and net income by 4%. Opossumtown, Inc. was only able to grow its operating income by a little more than half of one percent and net income by

    Read More

  • Business Case Study: Sears Vs. Sears Watch Company

    935 Words  | 2 Pages

    Nearly four decades past its peak, Sears strives to maintain steady profits against its competitors (Howard 2017; Meyer 2017).

    Read More

  • Sears And K-Mart: An Overview Of The Sears Financial Crisis

    743 Words  | 2 Pages

    “Sears is the leading retailer in home appliance, tools, lawn and garden, electronics, and automotive repair and maintenance. They are also the largest home service provider and answers over 11 million service c...

    Read More

  • Target Supply Chain Analysis

    1662 Words  | 4 Pages

    The purpose of this paper is to analyze and discuss the effectiveness of the Target Stores supply chain. Target was founded in 1902 by George Draper Dayton who after partnering with the owner of Goodfellow Dry Goods Company for a year decided he wanted to have more involvement, so he purchased Goodfellows renaming it Dayton Dry Goods Company. After purchasing the store Mr. Dayton remained in management until the time of his death in 1938. By this time the store had seen many changes including a name change in 1911 changing from Dayton Dry Goods Company to The Dayton Company, as well as an addition of the Dayton Foundation in 1918. After Mr. Dayton’s death the family continued managing the business until 1983 in which the last two managing Dayton’s retired, ending 80 years of the Dayton’s family management (Target Corporation, 2014).

    Read More

  • Kmarts Past Struggle

    1524 Words  | 4 Pages

    Youdath illustrates some of Kmart’s management changes, Charles Conway wanted to turn Kmart into an “Everyday low price destination,” making Wal-Mart Stores a direct competitor. Conaway cut back on advertising and the results were not profitable. After an unprofitable holiday season in 2001 the company filed bankruptcy. In 2002, James Adamson hoped to improve customer service and restock the shelves within the Kmart Stores. While Kmart was taking time to recover from filing Chapter 11, its rivals like Wal-Mart and Target were stealing its customers. When Kmart was focusing on random in-store discounts, Wal-Mart and Target were pitching low prices, broad inventories, hip products, and a pleasant shopping experience (2002).

    Read More

  • Wal Mart Company Overview

    1639 Words  | 4 Pages

    Wal-Mart's history is one of innovation, leadership and success. It started with a single store in Rogers, Arkansas in 1962 and has grown to what is now the world's largest - and arguably, the most emulated - retailer. Some researchers refer to Wal-Mart as the industry trendsetter. Today, this retailing pioneer has annual revenues of over $100 billion, 3,000 stores and more than 750,000 employees worldwide. Wal-Mart operates each store, from the products it stocks, to the front-end equipment that helps speed checkout, with the same philosophy: provide everyday low prices and superior customer service. Lower prices also eliminate the expense of frequent sales promotions and sales are more predictable. Wal-Mart has invested heavily in its unique cross-docking inventory system. Cross docking has enabled Wal-Mart to achieve economies of scale which reduce its costs of sales. With this system, goods are continuously delivered to stores within 48 hours and often without having to inventory them. This allows Wal-Mart to replenish the shelves 4 times faster than its competition. Wal-Mart’s ability to replenish theirs shelves four times faster than its competition is just another advantage they have over competition. Wal-Mart leverages its buying power through purchasing in bulks and distributing the goods on it’s own. Wal-Mart guarantees everyday low prices and considers them the one stop shop.

    Read More

  • Kmart's Bankruptcy

    1649 Words  | 4 Pages

    On January 22, 2002, Kmart filed for Chapter 11 bankruptcy protection becoming the largest retailer ever to do so in U.S. history. Most industry analysts attributed the immediate cause of the company's bankruptcy filing to a dull holiday season and stiff competition from WalMart and Target as the chain's more fundamental problem. But competition wasn't the root cause of Kmart's consistently poor performance. The real reason for Kmart's poor performance is that Kmart never had a marketing strategy. Kmart completely misunderstood its market and was positioning itself in the wrong direction. Also, on the strategic side, there are issues of where stores were located. On the whole, Kmart stores did not seem to be sited as well as the stores of the competition. Then there was the issue of technology. While Wal-Mart was becoming the relentless efficiency engine that we know today by investing in technology and streamlining the supply chain, Kmart held back. As Wal-Mart developed an infrastructure that enabled it to lower prices, Kmart slipped into a price disadvantage. This paper discusses these strategic problems that led to Kmart's poor performance.

    Read More

  • Flipping A House: Real Estate Strategy

    1005 Words  | 3 Pages

    First and foremost, it’s essential that the appliances are addressed. Appliances are the “age spots” of a house. As a result of planned obsolescence, products such as refrigerators and dishwashers are meant to be replaced every ten to fifteen years. This leads to the innovation of new ideas during product manufacturing. For example, when manufacturers released stainless steel refrigerators, the once-popular white models with the convenient ice distributer quickly became outdated. This illustrates a simple rule: investing in new appliances is one of the quickest ways to make a home feel as though the builders recently made the finishing touches and packed up their tools. They instantly modernize the house. This is the reason new appliances weigh so heavily in a buyer’s decision ...

    Read More

  • Kmart/Sears Case Analysis

    1263 Words  | 3 Pages

    In 1897 Sebastian Spering Kresge opened five-dime stores in Memphis and Detroit with John McCrorey as his partner. Two years later the partnership broke up and each person kept one city. Mr. Kresge kept the Detroit store and began expanding from there onward. In 1912 the company became incorporated as S.S. Kresge and was the 2nd largest dime store chain with 85 stores and annual sales of more than $10 million. In 1918 S.S Kresge was listed on the New York Stock Exchange. Throughout the decades, Kresge rapidly expanded eventually opening the first Kmart store in 1962 in Garden City, Michigan. By 1966 there were more 160 Kmart stores in the US and Canada. In 1968 Kmart began airing TV commercials. In the 1970s, Kmart continued to expand opening 270 stores in 1976 alone. In 1977, S.S. Kresge changed its name to Kmart because 95% of its sales were coming from that branch. In the 1980s and early 90s, Kmart diversified by adding other retailers such as Walden Book Company which was the number one bookstore chain in the US. The Sports Authority in 1990, 90% stake in OfficeMax and the Borders bookstore in 1992. Also in 1990 Kmart opened its first Kmart Super Center in Medina, Ohio. Whatever was left of the Kresge locations in the US was sold to S.S. Kresge's former partner's store chain McCrory's. Between 1994 and 1995 earnings began to fall for Kmart causing them to sell off their other operations, OfficeMax, The Sports Authority, PACE, Borders and its US automotive service Centers. Also in that time period, more than 200 US stores were closed. Fast forwarding to the future, Kmart launched www.bluelight.com which is now known as www.kmart.com in 1999. In 2002 Kmart filed for Chapter 11 Bankruptcy which was the biggest retail bankruptcy i...

    Read More

  • Rondo Company

    826 Words  | 2 Pages

    Rondo's Inventory Ratio declined to 9.5 in 2005, down from a ratio of 10 in 2003 and 2004. Rondo's sales improved year-over-year and the decline in inventory turns may be the result of carrying more inventory in response to increased sales. However, Rondo is still carrying too much inventory or the company may have excess obsolete inventory. Rondo needs to utilize just-in-time methods to improve inventory turn over. (Nice catch.) Carrying fewer inventories is required to improve efficiency and reduce cost. Rondo's performance is poor in this area.

    Read More

  • Sears Case Study

    1043 Words  | 3 Pages

    Poor organizational management, failure to innovate and adapt to the environment, and an outdated brand image have all contributed to Sears massive decline. By not setting a clear organizational strategy, executives of Sears strayed away from innovation, allowing for competitors to attract Sears loyal customers to their organization. In addition, the outdated brand image of Sears has failed to meet the ever changing customers of today’s society. Overall, there are many reasons that have led to the downfall of a once powerful retail giant.

    Read More

  • The Downfall of JC Penney

    531 Words  | 2 Pages

    JCPenney is a chain of American mid-range department stores that is based out of Texas that started over 100 years ago. JCPenny has been successful for most of its time up until the last three to four years. The company is trying relentlessly to overcome the lingering effects of the makeover that former CEO, Ron Johnson, had implemented in order for the company to take a new direction in hopes of increasing sales. The new CEO, Myron Ullman, has taken a close look into the markets demographic segmentation along with the income segmentation in order to attempt to return the retailer back to its old self, which is to appeal to middle-market customers. A couple issues of major concern for the company are the dissolving of Johnson’s Boutiques, the price of their products, and overall revenue.

    Read More

  • Kmart Case Study

    722 Words  | 2 Pages

    Sears Holdings is a company built upon the heritage of Kmart and Sears stores, owner of many well-known brands, and is the provider of auto care and home remodeling. The company’s key operations are the stores in which it operates under the Kmart and Sears brands. Almost every state in the country has at least one Sears or Kmart store, and some U.S. territories also have locations. The company operates in the retail market, which is a highly lucrative industry, but has lost its ability to produce profits and to take charge as a leader in American

    Read More

  • Swot Analysis Of Sears

    1199 Words  | 3 Pages

    Sears Holdings is a struggling discount retailer and is detaching from other stores in order to boost its financial position. Almost a dozen Sears and Kmart stores have been sold over the past year and...

    Read More

  • Essay On Inventory Management

    1436 Words  | 3 Pages

    Inventory can be explained as any assets that are held for future use or sale. Inventories are held for a variety of reasons, such as customer demand for end items, smoothing production, a hedge against stock outs and price increases, and economical purchasing. It is very costly and wasteful to keep large inventory on hand. The new technology and application quantitative tools and techniques for inventory management have permitted decrease in inventory. Top management needs to understand the role that inventories have on a company’s financial performance, operational efficiency, and customer satisfaction and strike the proper balance in meeting strategic objectives. They are responsible in keeping sufficient inventories to meet demand of the customers by sustaining the lower cost as possible. Inventories are required for a business to operate efficiently and effectively. Inventory management is a very significant part of basic operations activities. Most businesses and general organizations obtain most of their revenue through the sale of inventory.

    Read More

More about Sears Inventory

Open Document