Running Head: Capstone Page 1

John V Blake

Strayer University

Assignment 5: Capstone
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A company’s mission and vision statement is vital to the success of the company because

it almost gives it a goal to reach by saying this is our vision for our company now we have to

formulate a strategy to reach that vision and a mission is continuous the whole time the company

is in business. Let’s start with a vision statement, a vision statement articulates the ideal

description of an organization and gives shape to its intended future. In other words, a vision

statement points the firm in the right direction of where it would be in the years to come

(Michael Hitt, 2013). This is very important because as it states it points the company in the right

direction because the vision statement is come up with when the company is opening up so this

gives a good template and something the company can reach in their future. Now when it comes

to Sears their vision statement is as follows “Sears holdings is committed to improving the lives

of our customers to providing quality services, products and solutions that earn their trust and

builds lifetime relationships” (Investor information, 2005). Sears has done that over the past

years by coming up with a new rewards program called shop your way rewards it allows

customers to gain points by shopping in the store or online so that shopping is convenient for the

customer. Also by recent customer surveys Sears is getting new kinds of products in as far as

clothes, perfume and shoes so that Sears can expand its customer base, for the longest time Sears

was known for automotive and hardware appliances but now Sears has expanded to a full store

with a variety of options and by listening to customers they have gotten the products the

customers have desired. Also the customer service that Sears provides a warm friendly

atmosphere for customers to want to come back and create that lifetime relationship that the

vision says. A mission specifies the business or business in which the firm intends to compete

and the customers that it intends to serve (Michael Hitt, 2013), this is going to be a little more
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concrete and in depth than the vision statement. Sears mission to sum it up focuses on having the

best products and services that the customer wants, basically the mission talks about having the

customer shop their way. Stakeholders are the individuals, groups, and organizations who can

affect the firm’s mission and vision, are affected by the outcomes achieved, and have enforceable

claims on the firm’s performance (Michael Hitt, 2013). There are three kinds of Stakeholders

capital market, product market, and organization stakeholders and to sum it up goes from major

suppliers of capital (banks) to the workers in the establishment. All of these tie into each other

because without good workers, high level managers, good relationships with suppliers and the

banks it is hard to carry out the vision and mission statements because what is a good plan

without a great team to work the plan out.

The above is an example of the five forces of competition which is something that is very

important for any company to follow because competition is very fierce no matter the industry.
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Threat of new Entrants is basically saying that the possibility is always there for a new kind of

company to open up and take over, when it comes to Sears the chance that a store can just come

up out of nowhere is slim to none but a store can come up and slowly take revenue away causing

in a slow decline in revenue. The rivalry amongst competing firms is basically who your

competition is and with Sears the fiercest competition is Wal-Mart and Target, so there will

always be that rivalry to see who can do better which makes for good competition which is what

business is about. Bargaining power of suppliers is when you have a supplier you are buying

from and they raise their price on you it is up to you if you want to spend that price or not. For

Sears the appliances they are known for if the supplier was to raise the price and Sears was to say

no we will go with another product it could drastically reduce profit because brand names are

what customers go for, so the supplier has an upper hand and if you want good products you

have to abide by their prices.

A SWOT analysis is something every company must have because it gives you a

synopsis of what is around you externally and internally which gives you a starting point and

what to work on, the acronym SWOT stands for strengths, weaknesses, opportunities and threats.

A good SWOT analysis for Sears would first for strengths great rewards program, customer

loyalty, and great appliances and automotive that is the strengths. For the weaknesses poor

locations being that most Sears are still located in shopping malls where they are operated on the

malls time compared to Wal-Mart is owned and operated at its own time, Sears need to be more

innovative with it sales and marketing approaches and try to be more aware of the competition

slowly rising below them. The opportunities would be the chance to capitalize on a lot of new

openings as far as businesses shutting down and trying to put a Sears in more locations where
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customers can get too, take advantage of the failing economy and the fall of some businesses and

focus on the rise of Sears, lastly take advantage of the online community by putting an emphasis

on online shopping so customers can be comfortable the workers at Sears can order the supplies

for that physically at the location. As far as threats go you always the competition around Sears

as far as Wal-Mart and Target they are always improving and getting better which means that

Sears has to work twice as hard to keep up risking the chance of letting a new competitor get

closer to them as far as revenue goes because you are focused on what is ahead of you and not

what is behind you. With all the being said this is what a SWOT analysis can really do for you, it

helps you carve a sustainable niche in your market. Used in a personal context it helps you

develop you career in a way that best takes advantage of your talents, abilities, and opportunities

(James Manktelow, 2011).

Every SWOT analysis has to have an outline for trying to capitalize on it because without

that it would be hard to execute the SWOT analysis. For the SWOT analysis that was listed

above the outline for executing the analysis would go as follows, for the strengths think of the

kind of market in the area so you can see what you customers would like more. Think of your

best products (appliances, automotive) and focus on your strengths and look at marketing

towards those because when the customers are in the store they will see everything else but focus

on what you have best. Sell you loyalty program the shop your way program because it will

attract the market in because with a program named shop your way it lets the customer know that

they are in control of their shopping and the customer likes that. Now weaknesses as mentioned

store locations Sears are located inside too many mall locations attracting the wrong kind of

customers so maybe a more centralized location where they are the main focus so the market
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sees Sears and not a mall where everyone goes to hang out and window shop. Another one would

be training having employees be more knowledgeable and that starts from the top by having

better upper management a lot of Sears have been declining because of poor management which

reflects on the employees which in turn leads to poor sales. As far as opportunities go take

advantage of the failing economy as weird as that sounds companies are folding which leaves

open land which means that this particular piece of land can be a Sears or even a Sears

automotive center, the more stores you have in prime locations the better possibility of good

revenue coming your way. Take advantage of the online shopping scene by having customers

shop from home and order online it is a big hit and customers sometimes do not like the wait and

hassle of the physical location so shopping online is a great option for them, even if they go to

the store the service reps at the store can order something online if the store does not have it or if

someone does not know how to order online. Lastly threats they are everywhere because every

company below you is trying to get where you are at and the competition above you is of course

a big threat. When it comes to Sears if you focus on Wal-Mart and Target your 2 main stores

ahead of you it is a chance you lose sight of what is behind you and those stores move up in sales

while you might decline. This was mentioned before but a potential threat can be still bad

management because even though it was a weakness that can be fixed if it is not fixed than there

is a great chance that this becomes a threat.

Business level strategies are an integrated and coordinated set of commitments and

actions the firm uses to gain a competitive advantage by exploiting core competencies in specific

market products (Michael Hitt, 2013). Examples of business level strategies are Cost Leadership,

Differentiation, Focused Cost Leadership, Focused Differentiation, and Integrated Cost

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leadership/Differentiation. A great strategy for Sears is the cost leadership strategy it focuses

more what the customer wants at a price that is affordable to them and you the company can

almost choose which products you want affordable based on marketing. For example let’s say

Sears has a location in a suburban or country setting and you know that home appliances like

lawn mowers, things for the yard and other home appliances would be big hits than you focus

your marketing on that have it at a good price so you know that the customer will come to you

because it is accessible and affordable which means that they will not go out of their to get it

from your nearest competitor. Doing this kind of strategy requires a ton of knowledge in upper

management because you have to do your research when it comes to this kind of marketing plan

because not every customer shops the same and this strategy which was mentioned above will

more than likely not work in an inner city setting because most are not looking for lawn mowers

they would rather have a great television or something more flashy. This cost leadership strategy

mentioned above could also be incorporated with a focus strategy because this focuses on a

particular segment, mentioned earlier when talking about opening a Sears automotive in a

location this is a great example of that focus strategy. Let’s say that because the economy as

store had to close down and Sears was interested in taking over where that company failed, you

do your research and you see no automotive places in the area this focus strategy would place

what the customers want right in their particular area. This example was given because that area

may not be needing a full Sears store maybe just the automotive center because there are none in

the area and there might be Target right in the vicinity, so that would bring something that the

area needs rather than driving way out their comfort zone the automotive center is right in the

area.
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A good communication plan to make these strategies known is by holding a formal

meeting with all stakeholders in the area. Trying to send messages via email and reaching

someone at the office can be very hard and troubling at times so by sending one mass message to

everyone saying that a formal meeting will be held possibly at big hotel with a meeting area

would be a great idea. In this meeting you have a presentation slotted out where you explain that

this is the new strategies that we are trying to employ and let them know why you chose these

strategies because a strategy without an explanation would leave a stakeholder weary of the

strategy. One thing that you want to do at this meeting is get the opinion of all the stakeholders

and see if they have any thoughts or anything to be added or taking away from the plan, these

people are vital to your success so their opinion is much needed and has to be taking into

consideration. If you do not want to do the one mass meeting than breaking it down into groups

can be an idea get all their inputs and then hold the one mass meeting and let everyone know that

with their input this is our strategy so you can let them know that they are a part of this and it

makes them want to continue with your company.

Corporate governance is a relationship among stakeholders used to determine and control

the strategic direction and performance of organizations; it is concerned with making strategic

decisions more effectively and used to establish order between a firm’s owners and its top-level

managers whose interests may be in conflict (Middlemist, 2004). One corporate governance

mechanism that can be used to see how effective the company is controlling managerial actions

is ownership concentration. Ownership concentration as governance mechanism has received

considerable interest because large-block shareholders are increasingly active in their demands

that firms adopt effective governance mechanisms to control managerial decisions so that they
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will represent owners interests (Michael Hitt, 2013). This places control on upper management to

represent the owners interests and not go on their own agenda which some upper management

personnel like to do, the influence on strategies and firm performance is most of the time very

positive. Another mechanism is a board of directors which is basically a group of people who are

designated to act in the best interest of the owner and pretty much monitor top-level managers.

This is a great idea because before any big decision that may have to be made by upper

management you will have to bring it by the board of directors for them to give the OK on the

decision because it is what the owner wants. This might sound like micro managing in a way but

in the case of Sears this would be a great idea because some of the decisions upper management

have made in the past might be more useful if the company had a board of directors giving them

their blessing.

Top level leadership in Sears since the merger with Kmart has been average too poor to

say the least; this is being said because of the decline in sales in since the merger. Since the

merger in 2005 Sears and Kmart have had one message buy with layaway, buy with coupons,

buy now pay later and buy with loyalty reward points, this has proving to be a disaster. Five

years after the merge Sears Holdings is beleaguered, with sales markedly worse than its

competitors. The company’s revenue dropped more than 10 percent from 2005-2009 in the most

recent fiscal year, in the same time period Wal-Mart’s sales rose about 31 percent, Target’s more

than 24 percent, and Macy’s about 5 percent (Clifford, 201). So this drastic decline in sales over

this period of time shows that there is a problem in the upper management part of the company

whether it be poor decision making or lack of training something needs to be done. A suggestion

that can be made is just to have better training in the upper management section or even have an
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advisory team there to help out with decisions. This team can be a group of 5 executives who are

experts on decision making because not every manager is made for coming up with tough

decisions so having an advisory panel can help with those decisions the manger can bring it by

them and if the decision needs to be touched up they can help him or advise him to move in a

different direction.

Ethics are always a big part of business good ethics can have you become a store known

for ethical standards and have a great reputation, and on the other hand if bad ethics are attached

to you than it could lead to your demise. As far as Sears is concerned on the corporate level there

have been no reports of any wrong doing or bad ethics as far as lying on taxes or corporate

officials taking money or any unethical things like that. On a store level in the store closes to

home the Bowie location the two most recent GM’S (General Managers) have both been caught

stealing from the store. Not stealing money but stealing from the store abusing managerial

powers with friends using discounts and even the head of the loss prevention department was

caught stealing jewelry and other high priced products. Even though this store is still open its

sales have declined and with other Sears stores closing in the past this store if it continues on this

path or unethical management could be on that same road.

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References

Investor information. (2005, Septemeber 8). Retrieved from www.searsholdings.com:

http://www.searsholdings.com/invest/archives/sep2005.htm

Clifford, S. (201, December 21). A tough sell at Sears. Retrieved from www.nytimes.com:

http://www.nytimes.com/2010/12/22/business/22sears.html?pagewanted=all&_r=0

James Manktelow, A. C. (2011). SWOT Analysis. Retrieved from www.mindtools.com:

http://www.mindtools.com/pages/article/newTMC_05.htm

Michael Hitt, D. I. (2013). Strategic Management Concepts and Cases. Mason: Cenage.

Middlemist, R. D. (2004). Corporate governance . Retrieved from www.personal.kent.edu:

http://www.personal.kent.edu/~vberardi/44285/44285--ch10notes.pdf