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Sears Holding

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by

Michael Schmall

on 10 December 2013

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Transcript of Sears Holding

Sears should implement a Geographic Departmental Matrix Structure
Due to the retail industry's highly competitive nature, Sears needs to innovate in order to keep up with changing trends.


Sears is lacking in:
- Up to date Sears' business level strategy (Cannot do this because of the organizational structure)
- Modern in-store experience
- Substandard e-commerce focus (which is only 3% of revenue)


Driving Revenues Through Employee Satisfaction
Sears should motivate employees through a Theory Y approach (appealing to their personality/desires)

Sears should take care of its employees financial and self-actualization needs:
- More full-time employees
- Improved Benefits

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Organizational Structure
Brian Schroeder
Jesse Idun
Christina Hurley
Vadym Budilovskyy
Michael Schmall

Sears: The Fall of an Empire
Thesis
Sears’
problematic organizational structure
creates two significant issues for the firm:
poor corporate culture
leads to dissatisfied employees
prevents
the implementation of an
innovative
and
adaptive business strategy
that allows the company to thrive in a competitive, changing retail industry.
If Sears decides to stay within retail, we believe Sears should
restructure
in order to mitigate these issues.
Lampert Believes in Using Free Market Competition to Allocate Resources.
Sears’ Employees are dissatisfied with Work Conditions

Finance background – strong believer in laissez-faire economics
Improving Employee
Satisfaction
Customers have a negative experience at Sears.
Vitalizing the Forefront of
E-Commerce Operations
•An increase in overall online retail revenue should pursuade Sears to dedicate a larger portion of their resources to this sector

•Customer experience in stores drives customers to buy online as well
•Model after Amazon’s design in handling e-commerce, but execution and customer support need to be dealt with better

•Dedicate larger portion of annual budget towards marketing their online presence to compete with names like Amazon and EBay
Sears should encourage Job Crafting for Employees
Sears can improve employee satisfaction through implementing a process called job crafting. Here are some examples of job crafting that could be implemented by Sears:
1. Changing Tasks
- Creating training programs for different store areas to allow employees to switch coverage areas
- Employee workshops on fashion to spark interest
2. Changing Relationships
- Constructing a mentorship program that pairs employees with career mentors
3. Changing Perceptions
- Changing the title from “employees” to something more appealing. For example, Starbucks calls their employees “partners”


Lampert's divisional organizational structure is holding Sears back.
Employee and
Customer Dissatisfaction
Fighting managers create a host of problems
Managers solely focused on division profit
No inter-division collaboration
Bureaucratic red tape
No cohesive brand image
Employee Dissatisfaction
Theory X
Incentive Plan
Work Orientation
High-percentage
of Part-time
Workers
Geographic: needs of customers differ by region
Matrix structure: allows Sears to use functional managers more effectively across departments
Eliminates tension between departments - raises employee satisfaction
Cuts costs
Allows for inter-department innovation

Poor
Customer
Service
Disgruntled
Employees
Customer
Dissatisfaction

Sears Needs a Definitive Business-Level Strategy
Companies, such as Target and Wal-Mart have clear differentiation strategies. In particular:
Wal-Mart: Overall Cost Leadership
Target: New, Fresh and Low Cost

Sears lacks a specific target market and thus has no clear differentiation strategy to compete within the retail market
http:/www.sauditodayonline.com/wp-content/uploads/2013/04/red-tape.gif
http://www.consumeraffairs.com/retail/sears_cust.html
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Sears Needs Innovation
Innovation Through Online Retail
Model After Other Successful Retailers
References
http://www.forbes.com/sites/adamhartung/2013/07/18/learn-from-lamperts-bias-so-you-do-better-than-sears/
http://www.telegraph.co.uk/finance/2916456/Pay-packet-worth-1bn-makes-US-hedge-fund-manager-king-of-the-castle.html
http://www.businessweek.com/articles/2013-07-11/at-sears-eddie-lamperts-warring-divisions-model-adds-to-the-troubles
http://www.forbes.com/sites/stevedenning/2013/07/16/do-internal-markets-nourish-innovation-the-case-of-sears/
http://www.booz.com/media/file/BoozCo_2013-Global-Innovation-1000-Study-Navigating-the-Digital-Future.pdf
http://www.searsholdings.com/invest/
http://www.articlesbase.com/human-resources-articles/employee-retention-strategies-drive-revenue-growth-at-sears-115115.html
http://www.searsincentives.ca/incentive-solutions/employee-rewards/
http://www.foreseeresults.com/news-events/press-releases/us-holiday-eretail-2012-foresee.shtml
http://www.fool.com/investing/general/2012/12/12/where-are-the-commercials-for-sears-and-kmart.aspx
http://www.forbes.com/sites/onmarketing/2013/12/02/why-the-human-brand-is-critical-for-ecommerce-loyalty/
Halpin, Carro. "Will Viral Videos Save Kmart? | Compete Pulse." Compete Pulse. N.p., 27 June 2013. Web. 01 Dec. 2013. <https://blog.compete.com/2013/06/27/will-viral-videos-save-kmart/>.
http://www.theacsi.org/index.php?option=com_content&view=article&id=149&catid=&Itemid=214&c=Sears
Full transcript