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Isabella Ying Zhou Section 02

Isabella Ying Zhou Section 02. [ 1 ]. Specialty Retail. IMC. Specialty Retail. The Specialty Retail industry consists of companies engaged in the operation of stores and dealerships concentrated on a single product .

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Isabella Ying Zhou Section 02

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  1. Isabella Ying Zhou Section 02

  2. [1] Specialty Retail IMC

  3. Specialty Retail • The Specialty Retail industry consists of companies engaged in the operation of stores and dealerships concentrated on a single product. • The specialty industry includes car and truck dealerships, auto parts, home improvement, office supplies, books, kitchen wares, house wares, garden centers, toys, sporting equipment and other focused retail operations. • The Retail - Specialty industry excludes stores specializing in computers and other technology products, classified in Retail - Computers & Electronics; and stores specializing in jewelry, luggage, men, women, and children's clothing, classified in Retail - Apparel & Accessories.

  4. Specialty Retail Porter’s Five Forces • Industry competition • Specialty Retail industry in US is highly competitive. There are numerous competitors entering the market rapidly. • The exit barriers are low. Therefore weak firms are more likely to leave the market which in turn, increases profits for remaining firms

  5. Buyer Power • The bargaining power of buyers is moderate. There are different levels of price sensitivity for this industry customers. Firms focus on differentiation. • Supplier Power • The bargaining power of Suppliers is relatively low. There is a high competition between suppliers which means that their ability to raise prices or reduce quantity is very low. • Larger retailers have power over their suppliers because they can threaten suppliers to change to a different suppliers which would significantly hurt the suppliers because of their great market share. 

  6. Product Substitute • The product substitute is moderate. Firms rely on brand recognition, which can only be found in select locations. They have to focus on customer loyalty. • Customers expect to purchase quality products with reasonable price, so the firms have pressure to produce products of good quality to keep customers happy. • Threat of Entry • In specialty retail industry the threat of entry is relatively low because this industry is made up of many large, established firms with high competition. It’s really hard for a new brand that is not recognized to enter.

  7. [2] United Stationers IMC

  8. United Stationers General Facts • United Stationers Inc. is a leading national wholesale distributor of business products, with consolidated net sales of $5.1 billion. • United stocks abroad and deep line of over 130,000 products, including technology products, traditional office products, office furniture, janitorial and break room supplies, and industrial supplies. • With the acquisition of O.K.I. Supply Co. in November 2012, the Company now has operations in Canada and Dubai, United Arab Emirates. • The Company’s network of 72 distribution centers allows it to ship products to approximately 25,000 reseller customers, enabling the Company to ship most products overnight to more than 90% of the U.S. and next day delivery to major cities in Mexico and Canada.

  9. United Stationers SWOT

  10. Strength • Wide range of products: United Stationers offers 130,000 products and services portfolio to its existing 25,000 reseller customers. The company offers Technology products, Janitorial and Breakroom Supplies, Industrial Supplies and Office Furniture. • Increasing profitability: United Stationers has reported consistent increase in its profitability since 2008. The company’s net profit has increased from $98,411 in 2008 to $111,830 in 2012.   • Leading position in various segments: United Stationers is a market leader in wholesale distributor business. Through its technology products business line, it supplies 15,000 items and is a leading wholesale distributor of computer supplies and peripherals in North America. In its office furniture business line, the company provides over 5,000 products, and is one of the largest office furniture wholesaler’s distributors in North America.

  11. Weaknesses • High debt: The company has raised high debt in the last few years. The company had a debt of approximately $441,800 in fiscal year 2009, compared to a debt of $524,376 in 2012. • Low revenue per employee: According to some analysis, United Stationers’ employee efficiency, measured as total revenue generated per employee, is lower than its peers. The company recorded low revenue per for the period 2008-2012, considerably lower than its competitor.

  12. Opportunities • Growth in office services and supplies  • Rise of restaurant industry in the US: Consumer food expenditure on away-from-home dining is on a rise in the US. Changes in increased hours spent working, and an increase in commuting time are driving more consumers into the restaurant. The company's janitorial/sanitation products and foodservice consumables business line provides foodservice consumables to the restaurant industry in the US. The company is well positioned to benefit from growing foodservice sector. • Positive outlook for US office equipment market: A positive outlook for the US office equipment industry provides the company with an opportunity to improve its market share further.

  13. Threats • Increasing competition: United Stationers operates in a highly-competitive office supplies market. The company not only faces competition form large public companies such as Staples, Office Depot, and OfficeMax, but also from private players such as Lyreco and a number of local players. The two most significant competitive factors in the office products industry are service and price. While large organizations provide price differentiation, niche players have a service advantage. The company also faces competition in the software segment from various players such as Software Spectrum, CDW, and • Growing popularity of the paperless office: The increasing usage of computers and email has reduced paper generation in offices. Majority of the companies are encouraging electronic transactions for both internal and external requirements. This has led to a fall in the need for office equipment where paper plays the central role.

  14. Reference • United Stationers 2013 10-K • “Specialty retailers seeing continued recovery, but growth likely to be modest”, http://www.netadvantage.standardandpoors.com.proxy.library.nd.edu/NASApp/NetAdvantage/showIndustrySurvey.do?code=res • “Specialty Retailing Industry Outlook”, http://www.twst.com/interview/3299 • “United Stationers Inc.”, Datamonitor,2013 • “United Stationers”, Yahoo Finnace, http://finance.yahoo.com/q?s=USTR&fr=uh3_finance_vert_gs&type=2button&uhb=uhb2

  15. Thanks!

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