The Office Depot case study is designed to measure the skills of success of the well known office supply chain. This study analyzes key strategic issues that are important for Office Depot’s sustained growth and success. Office Depot maintains its success as the result of their relentless focus on a simple formula:
To offer the broadest selection of high-quality office products, services and information that their customers need at everyday low prices. Office Depot’s mission statement is to be the most successful office products company in the world. Office Depot’s simple formula and mission statement has created an industry leader.
Since Office Depot was founded in 1986, they have revolutionized the way office products were sold through warehouse retailing. Warehouse retailing involves buying directly from manufacturers in high volumes, this has been successful due to its low overhead costs and savings to customers. Low overhead trickles down to the consumer, who is able to purchase its every conceivable office needed product at up to 60% off of list prices.
Office Depot had opened 10 stores within its first year, following the immediate success of its first store in Florida. With direction from Office Depot’s Chairman and CEO, David I. Fuente, Office Depot opened 16 additional stores in 1987. By 1989, Office Depot had a total of 67 stores. In April, 1991, Office Depot merged with another growing office supply chain, Office Club. This merge put Office Depot on top as the largest office products retailer in North America.
In 1992, Office Depot went international. Office Depot entered the international arena when it acquired the Great Canadian Office Supplies Warehouse chain in Canada. After successful conversion of five Canadian Office Supplies Warehouses to Office Depots in Canada, Office Depot opened additional stores throughout the country. Office Depot continued its expansion when it entered the market in Colombia and Israel in 1993. By 1997, Office Depot had opened locations in Poland, France, Hungary, Japan and Thailand. The company ended 1999 with 825 stores in the U.S. and Canada alone. This expansion is one of the strategies used by Office Depot to lend to its successful growth and plans to continue its expansion in the future.
In the highly competitive market of office supplies, Office Depot has proved itself to be at the top of its game, holding a strong second place over their biggest competitor, Staples. Competitors, such as Staples, have shown only a 6% increase in sales over the past year while, Office Depot reported sales of $10.3 billion, a 14% increase over the $9.0 billion reported for 1999. They have reached this level of sales and success by achieving major goals and objectives set by the company. Office Depot has developed excellent standards for customer service, successful advertising campaigns and expanded into global markets. Each of these accomplishments have aided Office Depot in gaining a strong foothold in the office supply market and brought them one step closer to becoming number one.
In spite of Office Depot’s growth and success, its greatest challenge may be yet to come. In order to surpass Staples and become number one in the industry, Office Depot must carefully and successfully plan and execute two key strategic plans. The first is a continued level of excellent customer service and increased convenience for their customers. Office Depot needs to maintain a knowledgeable and helpful staff, comprised of quality people that can provide an atmosphere in the stores that makes customers feel welcome. A welcome atmosphere with a knowledgeable staff is necessary in order to continue to build a larger customer base for the company.
In a world of technology, customers are constantly looking for ways to receive their merchandise quicker. To maintain its current success, Office Depot must remain on top of the changing technology and expand its already established Internet ordering system. Customers, at the present time, can look through an online catalog, place an order and have it shipped directly to their home or office. Several companies, like the telecommunication company, GTE, have contracted with Office Depot in order to offer discounts of up to forty percent to their employees when they place their orders online. With this service comes the