Sears, roebuck & co

1. Sears, Roebuck & Co.
ABDALRAHIM ABUDAYYA

2. Outlines
 History Of Sears
 Fast Facts
 Vision, mission, and core value
 Board of Directors, and Senior Management Team
 Business and Industry Analysis
 Sears Mistakes
 Current Situation
 Corporate governance, executive compensation, and agency conflicts at Sears
 SWOT analysis

3. History Of Sears
1886: Richard Sears – sells watches
1893: Sears officially forms; corporate
name is Sears, Roebuck, and Co.
1896: First general catalog
1925: First Sears retail store opens in Chicago
1945: Sales exceed $1 billion
1953: Sears opens in Canada
2009: Sears purchased the social search engine Delver. Sears Tower

4. Fast Facts:
 Headquarters: Hoffman Estates, Illinois
 Employees: Approximately 250,000
 Full-line Store Locations: Nearly 900
 Sears' 2004 Fortune 500 Ranking: No. 32
 Areas of Operations: United States, Puerto Rico and
Canada
 Employs: Approximately 201,000 associates in the U.S.
and 48,000 in Canada
 Serves: More than 48 million active Sears customer

5. The Foundation of Sears
 Sears' Mission
To grow our business by providing quality products and services at great value when and
where our customers want them, and by building positive, lasting relationships with our
customers.
 Sears' Vision
To be the preferred and most trusted resource for the products and services that
enhance home and family life.
 Sears' Core Values
We must
· earn our customers' trust and business every day;
· act with integrity in everything we do;
· treat everyone fairly and value diversity;
· be accountable for our actions; and
· win as a team.

6. Board of Directors
 Edward S. Lampert
 Cesar L. Alvarez
 Paul G. DePodesta
 Kunal S. Kamlani
 William C. Kunkler III
 Steven T. Mnuchin
 Ann N. Reese
 Thomas J. Tisch

7. Senior Management Team
 Edward S. Lampert, Chairman of the Board, Chief Executive Officer
 Jeffrey A. Balagna, Executive Vice President, Chief Information Officer
 Robert A. Schriesheim, Executive Vice President and Chief Financial Officer
 Arun D. Arora, Senior Vice President and President, Home Appliances and
Home Services
 Kristin M. Coleman, Senior Vice President, General Counsel and Corporate
Secretary
 Alasdair James, President and Chief Member Officer, Kmart
 Leena Munjal, Senior Vice President, Customer Experience and Integrated
Retail
 Robert A. Riecker, Vice President, Controller and Chief Accounting Officer

8. Business and Industry Analysis
Business Analysis
 Sears Roebuck & Co., founded by R. W. Sears in 1886
 In 2003, the company was divided into three domestic segments: Retail and
Related Services, Credit and Financial Products, and Corporate and Other. In
addition the company has one international segment, Sears Canada. The
Retail and Related Services segment focuses principally on merchandise sales
and supporting activities, such as: service contracts, product installation, and
product repair. The Credit and Financial Products segment manages the
domestic portfolio of MasterCard and Sears Card receivables. This segment
was sold in November of 2003. The Corporate and Other Segment includes the
operations of Sears Home Improvement Services

9. Industry Analysis
Health & Beauty,
8.90%
Electricals, 5.30%
Clothing &
Footwear, 54.60%
Homewares, 11.70%
Furniture, 10.00%
Other (including
food), 9.50%
Global Department Stores Market Segmentation: 2008

10. Industry Analysis

11. Sears Mistakes
 In the 1990s the company began divesting itself of many non-retail entities, which
were detrimental to the company's bottom line.
 The merger of Sears with K-Mart, two Companies in trouble don’t make one good
company.
 In 2004, Kmart announced its intentions to purchase Sears. As a part of the
purchase, the Kmart Holdings Corporation would change its name to Sears Holdings
Corporation. The new corporation announced that it would continue to operate
stores under both the Sears and Kmart brands. (Two Losers).
 The fact of Sears having had 42 brands in their lineup, and have given most of
them away.
 Sears Brand Central was an electronics store. The appliances departments in Sears
are now known and referred to internally as Brand Central, although they are not
marketed to consumers as such, except for a few locations in Puerto Rico (What
for?).
 In March 2009, Sears purchased the social search engine Delver. (completely off
strategy).

12. Current Situation
 Sears’ stock has dropped from $193 a share in 2007 to about $37 today.
 Sears Chairman Edward S. Lampert has come under increasing scrutiny for
raising prices, cutting costs, mismanaging merger with Kmart, and alienating
customers.
 Critics: Sears is dumping high end products in older Kmart stores that
haven’t been modernized.
 Marketing budgets have been cut.
 Continuous drop in same store sales since 2008.
 Sears Grand, a strategy to compete with smaller strip malls, has
failed.

13. Corporate governance, executive
compensation, and agency conflicts at Sears
 the analysis of Sears' governance structure and executive
compensation portrays a firm lacking management accountability.
Management insiders chaired keyboard committees, and managerial
compensation bore little relation to the firm's operating performance.
This contention is further supported by the board's 1988 adoption of a
comprehensive set of anti takeover amendments in response to
rumors that Sears was a possible takeover target. These findings
suggest that Sears' governance structure and compensation plans did
not encourage its management to act expeditiously in response to the
firm's deteriorating performance.

14. SWOT analysis
Strengths
 117 years of experience in the market place.
 Number of stores across the market place is high.
 Brand loyalty built over the years.
 Strong market share in home appliances.
 Being a “follower” in implementing an effective Supply Chain
strategy will allow Sear’s a higher chance of implementing the
strategy correctly because they will have access to better
technology and access to “what not to do” when implementing
the strategy.

15. Weaknesses
 Previous attempts to penetrate market share have failed.
 Previous attempts to increase sales in their clothing line have
failed.
 Store floor plans are out of date and consumers have a
negative perception of shopping because they feel lost and
cramped while shopping.
 Mall based stores becoming a thing of the past
 Competing for Low Prices

16. Opportunities
 The acquisition of Land’s End shows hopes for increase sales
volume in Sear’s clothing line.
 Trends in the growth of the home furnishing market suggest
that Sear’s brand name loyalty with Craftsman can potentially
increase sales

17. Threats
 Lack of growth in all product lines, including their number one
brand name product, Craftsman. This trend must be a top
concern for Sear’s executives
 Lack of recognition in the market place in regards to their
clothing line.
 Sear’s is behind in the industry strategy of Supply Chain
Management.
 Consumer’s negative perceptions of hassles with shopping at
malls.

18. Recommendations
 Sears must refocus their business around their expertise and their clients. So many
years have gone by, that it is a difficult change proposal. People by now do not
know what Sears is all about.
 Sears has to dispose all unnecessary business and stores, collect cash, reduce their
size of business and launch a new model coherent with their brand equity and
capabilities, which is different to competition and attractive to consumers.
 We are going to propose Sears Mega Stores only, using Sears Grand stores and
developing a business setup around Home, Car and Outdoor Life.
 Retain Traditional Reputation
 Pick a slogan and stick with it