Factors that to contributed to sear

Factors that to contributed to sear`s decline over the past twenty years.

Introduction

Sears was once the largest retailer in the world hosting 3500 stores in the united states. Sears had the tallest building in the united states. In the year 2004, the company vacated its namesake as a strategy of gaining a competitive advantage. Sears has reported bankruptcy and closing of stores. Thousands of employees were laid off during this closure. Sear`s failure brings out the aspect of the challenges facing the retailers. Its predicament shows the importance of meeting the expectations of consumers. The main problem that sear has faced over the years is lack of innovation. It has not been able to gain a competitive advantage that will make it stay ahead of competition (Hornell et al., 2018). The competitive threats are the ones that have beguile the sear`s performance. Sear failed at so many fronts which has made it difficult for the company to get back at its feet.

Environmental factor that led to failure sears

The main factor that led to failure of sears is its inability to keep up with the stiff competition in the market. Sear was unable to stay ahead of the competitive threats that are in the retail market. The sear`s fall contribute to the rise of Amazon which is it’s the most formidable competitor. Walmart is also the largest retailer in the world thus gives a very competitive factor in the retail market. In the year 1990 sears was the same as Walmart since it was generating revenue of about $ 31.9 billion. Walmart is one of the retailer company that saw an opportunity of overtaking sears thus chipping away over time at consumers and shopping sears (Harris et al., 2019).

Sear is struggling not only because of poor assortments but also due to consumer economics. The consumer economics entails the buyer’s ability to pay for their basic needs such as housing, food and transportation among others. consumer`s income determines the state and performance of such retailers. According to the united states PayScale the wage rise is approximated at 16% but the inflation rate of about 9% makes it difficult for the consumers to buy as much as they used to(Hornell et al., 2018). Currently, a typical worker buys less than they did in the year 2006 thus adding to more reason for failures of retailers such as Sears.

Sear`s lack of focus to establish a competitive advantage in the market has also led to its decline. Years back Sear became so unwieldy that it became difficult to manage its business effectively thus the poor management aided to its failure. Sear was unable to manage its customer experience. They were unable to offer all the consumer goods effectively. A good example is its easier to display all the items being sold in a store than displaying such items in an internet. The softer side of Sears is was a product launched by sears to target women and did a vigorous campaign of this product (Tokosh, 2019). However due to poor management, Sear`s campaign had started to move in a wrong direction. It only focused on selling more clothes instead of soft goods as started in its campaign. Sear had a vision of lowering the cost of living by working together with other retailers. In the effort of achieving its vision it expanded its category and product mix in a short span without establishing a proper management of this categories thus made it is for Sear to lose focus. In order for sear to get back to its fit it decided of buying another retailer that is not doing well then combine assets and work as a joint venture. This was also another bad decision that led to more failure. Sear had bought Kmart which was a poor performing retailer (Cavan, 2016). The retailer was not performing well at the time thus instead of getting itself out of trouble, Sear added more trouble to its operation.

Sear also continued to fail because it lacked continual and sustained investment. Inorder for any retailer to be successive, they have to establish continual and sustained investment into their business. The retail stores are capital extensive thus they need proper management so as to grow and develop their ecommerce platforms. Lack of focus and proper management made sear look tired since it stopped investing in its stores for a very long business period. In the 2017, Sears spent almost 90% of its square foot to upgrade its ecommerce site and its stores. When the sears store fell into disrepair the management was unable to generate enough finances to upgrade these stores thus leading to a negative investment cycle of generating less revenue and making less sales. This cycle made it even more difficult for Sears to keep up with the stiff competition in the retail industry (Kendra, 2019).

The company was also unable to keep up with stiff competition because it had missed too many opportunities. In the year 1980s sear was losing about one million dollars in a day because its initial assets were weighing it down. Aspects such as high deliver cost that is characterized with the distributing catalogue. The catalogue could include as many as 2000 pages which were a bit expensive for Sears since it had a low margin item. However, in the next year sear closed its catalogue business and established an online business which had more synergies. This was a good step but they failed to foresee the next phase which was to figure how to move the catalogue into ecommerce. Sear is unable to overcome the threats paused by amazon in the retail sector which is distract other retailers from focusing on their core businesses. Therefore, due poor management and lack of focus Sears has kept failing over the years.

Conclusion

In conclusion, Sears was once the largest retailer company but due to its inability to sustain the stiff competition in the retail industry it has kept failing over the years. The main reasons why Sears can’t keep up with the competition is first, it has failed to keep innovating and lost focus of its core business. The company`s inability to stay ahead of competitive threats and sustain continual investments have also aided to its failure over the years.

References

Cavan, D. R. (2016). Analyzing Retail Store Closures. Appraisal Journal, 84(4).

Harris, M. D., Anitsal, I., & Anitsal, M. M. (2019). The Fall of Sears from within: How Customer Sentiments Refuted Retail Capital and Authority.

Hornell-Kennedy, B., Murphy, P., Stelmack, S., & Conrad, C. (2018). Retail apocalypse: The case of Sears Canada Inc.

Kendra, D., Fyke, M., Kelley, A., Woetzel, K., Harmer, C., & Goeltz, D. (2015). Losing the grip on Sears Holdings. Journal of Business Cases and Applications, 14, 1.

Tokosh, J. (2019). Is the Macy's in my mall going to close? Uncovering the factors associated with the closures of Macy's, Sears, and JC Penney stores. Growth and Change, 50(1), 403-423.

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