Office Depot Swot Analysis

T.O.W.S. (Threats, Opportunities, Weaknesses & Strengths.) Analysis

Threats

i. Things may get even tougher for all of the office suppliers as the housing decline continues to spread.

ii. Inventory on hand has gone up to 54 days from 52 in 2006, but receivable stayed flat which was caused by the timing of tax payments which also caused its decline in sales.

iii. OfficeMax and Staples can potentially enter the pacific market which Office Depot left open.

iv. Wal-mart continues to be competitive price wise and reaches to direct consumers of office supplies other than business owners.

Opportunities

i. More cost effective branding in its own name like the Costco’s Kirkland private brand.

ii. Most North American retail outlets have copy centers that provide designing and printing services to consumers and businesses. The overall copy center market is estimated at about $20 billion annually, and the industry is broken up among several key constituents: Small local and regional companies accounting for approximately 75% of the market by revenue The major office supply retailers (Staples, Office Depot and OfficeMax) comprise about 11% of the market combined FedEx (FDX) subsidiary Kinko's owns the leading share of the market at 14% of revenues In this highly divided market, there is room for Office Depot to take away market share not only from its main competitors, Staples and OfficeMax, but the copy center leader, FedEx Kinko's. In addition to copy centers based in retail stores, Office Depot has 12 regional production facilities that provide the same services for large-scale orders. Current estimates for the operating margin of Office Depot's design, print and ship services are approximately 17%, ranking it as one of Office Depot's most profitable offerings. Office Depot has leveraged this profit center by renovating retail stores to make copy centers more visible to customers near the front of the store. In addition, the company was moving...