Office Depot is one of the largest suppliers of office products and services in the world. Office supplies is in fact a niche in the retail industry and Office Depot is one of the two dominant players in this sector, with Staples being the other. The Company retails office supplies, commercial machines, computers, computer software and office furniture, in addition to copy, duplication, replica, mailing and delivery services to small office or home office, medium and large companies in the United States and more than seventeen other nations across the world. Office Depot is a market leader in each of its commercial channels globally. The Company retails office products, services and commercial solutions from end to end multiple distribution channels, comprising office supply stores, direct mail by means of Office Depot and Viking, worldwide websites, B-2-B e-commerce and sales workforces that appeal to medium and large companies (Hoovers, 2015).
Tangible and Intangible Office Depot Resources
In essence, the resources of a company refer to the assets of the organization. Both tangible and intangible resources are valuable to the company as they facilitate the organization to generate a vast and resilient demand for its products as well as decreasing the costs incurred. Tangible resources refer to the physical units, for instance, land, equipment, inventory, manufacturing plants, buildings and inventory. On the other hand, intangible resources are the nonphysical things that are generated by managers and other personnel, for instance, brand names, the knowledge attained by the personnel through experience gained, intellectual property, and reputation of the company (Hill et al., 2013).
In terms of tangible resources, Office Depot operates over two thousand retail stores in the United States and over 20 retail stores globally. Even though the company owns a small number of its retail store locations, a great deal of its facilities are leased or subleased. Towards the end of 2013, Office Depot had over 80 supply chain facilities, 36 of them being located in the United States, while the rest are located internationally (Office Depot Annual Report, 2013). In addition, the company has call centers through which it retails its products. The other tangible resources of the company include: cash, inventories, and equipment. Some of the equipment and inventories that bring about revenue to Office Depot include: paper, paper clips, and general office supplies, such as hardware, furniture, art, school supplies, printers and copiers. On the other hand, the company does indeed have intangible assets. To start with, Office Depot over the years has built a brand name and a reputation, and has become one of the household names in the retail industry. In addition, the company has a goodwill that has been appreciating in the past number of years. For instance, the company’s goodwill increased from $64 million in 2012 to $398 million in 2013 (Office Depot Annual Report, 2013). In addition, the company’s intangible resources include: software sold, and the website of the company where it undertakes its retail sales.
Capabilities can be defined as the resource-managing skills and resource use of a company. In particular, these skills dwell in a company’s guidelines, practices, and system. In other words, this is the style or manner through which a company makes its decisions and manages its internal processes. This is purposed to accomplish organizational structure, processes, and systems of control and employment strategies. Capabilities lay down how and where decisions are made within a company, the sort of behaviors the company recompenses and the company’s cultural standards and principles (Hill et al., 2013).
One aspect that is central to office Depot’s philosophy is hiring employees that are top-notch. The company perceives its success as directly interconnected to the quality of its personnel and their capability to meet and surpass the expectation of the consumers. Its personnel are rightfully essential to the company’s capability to establish and sustain string, loyal consumer relationships across manifold business channels. This is reason as to why the company is deeply dedicated to making its environment a more compelling place for work and operation. As a replication of the value that the company sets on its team of professionals, it offers a compensation package that is not only extensive, but also flexible and that which rightly sets a standard in its industry of operation (Office Depot Annual Report, 2013).
Another aspect that can be perceived is the value that the company places on its consumers. Irrespective of which channel the consumers opt when purchasing their office supplies and services, the company is dedicated to ensuring that Office Depot is a more appealing place to shop. In undertaking this, the company constantly seeks to enhance its selection of products, unveil business solutions that are valuable and also enhance the general level of consumer experience at every level. To attain this objective, the company has undertaken a forceful plan to make customer service its topmost priority and to improve service delivery in all of its business channels (Office Depot Annual Report, 2013). The company is keen on ensuring its customer service is the best in the industry and more so plans on increasing its reputation. For instance, the company has fast-tracked attractive new services in its supply chain, such as UPS shipping centers, where consumers are able to wrap, pack and ship their packages. In addition, the company is constantly placing better emphasis on supplying the products that the customers use most frequently (Office Depot Annual Report, 2013).
In addition, with more and more consumers shifting in the direction of online transactions, the online business has come to be a fast growing profitable aspect of Office Depot’s operations. In order to satisfy the demand of the consumers and also optimize this channel, the company has redesigned its website to include Office Max as well portray fresh value-added products and services. The company is also keen on forming strategic alliances and partnerships with online companies so as to gain access to new consumer bases and also offer products and services that are of great value to its prevailing consumers (Office Depot Annual Report, 2013).
The extent to which an organization attains competitive advantage is centered on its distinctive competencies. These are organization-specific strong suits that permit a company to have a differentiation of its products in relation to those being offered by rival firms. Distinctive competencies also allow a firm to attain significantly lower costs in comparison to its rivals (Hill et al., 2013). Office Depot has a competency in copy and print services. The company has made considerable determinations to improve and increase its profitability by offering copy and print services. In particular, these services have come to be a distinctive competency of the company as they generate margins, which are twice as high compared to the company’s other offerings. Office Depot has incorporated copy and print services into its retail and commercial business operations, to the extent that the company has comprehensively renovated and transformed its retail stores with copy centers conspicuously featured in the front. More so, the company has constructed a network of twelve regional centers for huge commercial clients (Hitt et al., 2008).
One other distinctive competency of Office Depot lies in private brands. Being one of the largest retailers in the industry, Office Depot has successfully been able to place its own brand on the goods and merchandises that it markets and retails. The company has effectively employed this aspect as a way of reaching and attaining additional market segments. More so, unchanging and steady with its corporate objective and goal to purchase and retail green products, Office Depot has recently launched Office Depot Green. This is a private label line of products, which are environmentally sound and caring. This private label product line consists of recycled paper and paper products, compact fluorescent light bulbs, recycled paper and paper products and other items that generate negligible impact on the environment (Boone and Lutz, 2015).
Strategies, Competitive Advantage, and Profitability
The distinctive competencies shape the strategies taken by a company, which bring about competitive advantage and greater profitability. Nonetheless, it is also very significant to come to the realization that the strategies adopted by a company can generate new resources and capacities, or strengthen the prevailing resources and proficiencies of the company, which in turn enhances the distinctive competencies of the company. Competitive advantage results in greater profitability. In essence, the profitability of a company is reliant on three particular factors, which include: the value placed by consumers on the company’s products, the price charged by the company for its products, and the costs of generating such products (Hill et al., 2013).
The online strategy of Office Depot is targeted at consumers with a service and a requirement for customer service. The company has the belief that these consumers are not as delicate compared to the Every Day Low Prices (EDLP) that are set by its main online rival companies, such as Walmart, Target and Amazon. The strategy of Office Depot is to compete with these other large retail…