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ASSIGNMENT ONE
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Sears, Roebuck, and Company, also known as sears, was created in 1892 to sell watches. Five years later, the Company grew into a significant retailer shop in the USA. The Company subsequently changed ownership to Kmart and was run by Edward Lampert ( Kinicki et al .,2011). However, Lampert has had no retail experience at the time.
What is the underlying problem in this case from Edward Lampert’s perspective?
Sears suffered a great deal under the management of Lampert. First, Lampert had no experience running such a business. The man believed that the lack of technology was bringing the Company down. According to Lampert, Sears was competing against Amazon, an online retail shop. This prompted him to engage in wrong strategies, like creating online shops to compete with rivals. To take care of the issue, Lampert made an online loyalty program by name shop your way. Also, he believed that selling wholesome was not profitable enough, so he separated Sears into thirty different business units. This, he thought, would improve the profit margins and long life of the Company and stabilize the Company.
What are the critical causes of Sears’ decline?
First, poor management will always bring down a big company, and sears could not be spared. The fact that Lampert engaged in the wrong strategies to help the Company played a vital role in the decline of the Company. Secondly, they followed a structural model commonly used in financial fields, whereby rival companies fight for scarce resources. Equally, segmenting the products into small units contributed to sears’ fall because this meant more staff to pay ( Kinicki et al .,2011). The division also led to rivalry, division, and sabotage within the same Company. Incentives brought more damage because they were only linked to successful individuals, leading to the rest of the employees’ demoralization. Thirdly, Lampert opted for online business against stores. This made him get into business with rival companies by starting programs that allowed customers to purchase, win, and redeem points at sears and rival companies such as Uber and Amazon. Despite the falling of the Company, Lampert still believed that Sears the Company can rise. He was once quoted saying, “while there is still work to do, we are determined to do what is necessary to remain a comparative retailer in a challenging environment.”
To what extent did sears use a total Quality Management perspective in running the business?
As time went by, sears grew along with its customers’ demands. For instance when the clients moved rural to urban areas, sears opened so many stand alone stores to cater for its clients’ needs to shop in beautiful stores. Equally, sears were among the first retail stores to offer credit cards in the early eighties. The Company also introduced discover- cards that rewarded the customers after every purchase. This idea kept the Company running at a profit for many years. However, the Company was bureaucratic with fixed prices. The clients moved to more flexible companies, which affected the sales for sears significantly. Secondly, sears managed to accommodate all its consumer needs for shopping in malls by anchoring its stores in different malls countrywide.
References
Kinicki, A., Williams, B. K., Scott-Ladd, B. D., & Perry, M. (2011). Management: A practical introduction. McGraw-Hill Irwin.