RSM100H1 Lecture Notes - Lecture 7: Competitive Advantage
RSM100H1 verified notes
7/13View all
RSM100 CASE
Sears case study
• What happened? bankruptcy, closing thousands of stores
• Used to be a super strong company
• Retails stores (especially those in the mall) are having a bad time due to e-commerce. Meanwhile, many retail stores
opened. Only-med priced retail stores are doing worse
•
• What was likely the cause of their financial difficulties:
• They were in the middle class, higher than Walmart, lower than LV. Middle class is shirking.
• They didn’t adapt online-shopping (not the main reason)
• They were running out of cash, they choose have debt, BUT MOST IMPORTANTLY! They sold craftsman. they sold
their best long-term revenue generating department
Who are the key stakeholders and how do they stand to benefit or risk being harmed?
• Employees, lost their job
• Competitors, positive news for them
• Customers, harmed because they lost a place to buy things
• Landlords, Good news. They are paying little rents because they signed the contract many decades ago.
•
Do you think Sears will recover?
• Yes:
• No: We don’t know where they are (not low/high end), sold their money generating department, people don’t like
shopping in a closed store
What do they have to do
What challenges will they likely face
Their branding needs to change, they want to do high-end things, they used to be middle. That’s how people used to recognize
them and hard to change
Target:
• Hard to compete with Walmart, they have the same product
• You might feel Target store are cleaner and more upscale, but after all it’s low-end store and Walmart is cheaper
Competitive advantage
— operating with an attribute or set of attributes
that allows an organization to outperform its rivals.
Sustainable competitive advantage
— one that is difficult for competitors to
imitate.
(A competitive advantage that is
valuable and rare)
Document Summary
Sears case study: what happened? bankruptcy, closing thousands of stores, used to be a super strong company, retails stores (especially those in the mall) are having a bad time due to e-commerce. Only-med priced retail stores are doing worse: what was likely the cause of their financial difficulties, they were in the middle class, higher than walmart, lower than lv. Middle class is shirking: they didn"t adapt online-shopping (not the main reason, they were running out of cash, they choose have debt, but most importantly! They sold craftsman. they sold their best long-term revenue generating department. Employees, lost their job: competitors, positive news for them, customers, harmed because they lost a place to buy things. They are paying little rents because they signed the contract many decades ago. Do you think sears will recover: yes, no: we don"t know where they are (not low/high end), sold their money generating department, people don"t like shopping in a closed store.