Sears SWOT Analysis | SWOT Analysis of Sears

by Shamsul
SWOT Analysis of Sears
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Sears SWOT Analysis | SWOT Analysis of Sears

 

Sears is one of the biggest players in the retail market. They offer a variety of products from electronics to apparel, toys, seasonal merchandise, home services, and many more. It was founded in 1893 so they have working experience of 125 years. Since then, they effectively go strong locally and internationally. You can get inspiration or motivation with this SWOT analysis of Sears. In Sears SWOT analysis, we will talk about Sears’ strengths, weaknesses, opportunities, and threats in detail. Let’s begin:

 

Company Name:  Sears Holding, Corp

Founder:  Richard Warren Sears, Alvah Curtis Roebuck, Julius Rosenwald

Year founded:  1893 Chicago, Illinois, United States

Reincorporated: 1906 by Richard Sears and Julius Rosenwald

Headquarters:   Hoffman Estates, Illinois, United States

Industry:  Retail

Type: Subsidiary

Area Served: United States, Bermuda, Puerto Rico

Annual Revenue (2019): US$13.2 Billion

Profit | Net income (2019): US$1.7 Billion

 

Sears SWOT analysis | SWOT Analysis of Sears

Strengths of Sears:

 

  • Renowned Brand:

Sears is one of the oldest and experienced retailer companies in the market. It offers everything from appliances to apparel and daily used items. That’s why it is a highly famous and renowned brand in the world.

  • Best Quality:

Sears offers high-quality products to its users. Despite all the shortcomings, they improve their product quality. This is the reason many people prefer to make purchases from Sears. Their products are the best and provide longevity.

  • Successful Niching:

It is important for any company to focus on its core product in order to retain its customers. Sears understands this thing that’s why it niched down its business by providing consumer goods. It is one of the major strengths of Sears.

  • Effective Mergers:

The successful merger of Sears and Kmart help them to make a strong market position and competitive retailer. Due to this merger, they successfully expanded its growth and locations. In this way, they increased their product category and offerings.

  • Vast Variety:

As we mentioned earlier that Sears offers a wide variety of products from appliances to apparel, home services, sporting goods, food, and many more, so its product portfolio is very vast. You can call it a one-stop-shop due to the presence of every single necessary item.

  • Powerful Supply Chain Network:

A strong supply chain network is another biggest strength of Sears. They deliver products to customers on time without any loss or damage. This type of reliable delivery system makes Sears a big retailer player in the market.

 

Sears SWOT analysis | SWOT Analysis of Sears

Weaknesses of Sears:

 

  • Incompatible Leadership:

As the behavior and need of customers are changing due to certain reasons, instead of adding new and innovative features to their system the company adopted ineffective and invaluable strategies. The CEO of Sears running the company with ineffective strategies that result in the downfall of the company’s market value and share.

  • Unnecessary Cost-Cutting:

It is a fact that if you invest in your business then you will earn more. But Sears’ unnecessary cost-cutting on necessary things is a major weakness. They spend 91 cents on the renovation of their store per square foot while other competitors such as Best Buy invest approximately 16 dollars per square foot on upgrading its outlets.

  • Late eCommerce Implementation:

As they have experience and dominating the market for many years, but they fail to surpass online giants like Amazon in online sales. They started their online or e-commerce operations very lately.

  • Low Spending in Upgrading:

In order to maintain long-term sustainability and the company’s system, it is necessary to invest a huge amount of money. But Sears completely fail in managing its assets and real estate issues. it is also a major weakness of Sears.

  • Fast Diversification:

Diversifying products and offerings are good for any company in order to fulfill the customer’s needs. But Sears adopt fast and abnormal changes in their operations and offerings which causes the loss of profits and sales. This kind of quick diversification is the biggest weakness of Sears.

  • Partnership with Kmart:

Although the merger of Sears with Kmart was very successful as they increase their market share and growth, it also affects the company as they reduced from 3500 stores to 182 in 2020.

 

Sears SWOT analysis | SWOT Analysis of Sears

Opportunities of Sears:

 

  • Exploit Ecommerce Platforms:

As we know many companies make a huge profit from their online platforms, it is necessary for Sears to exploit its online platforms so that people can easily make purchases. This opportunity enhances its working and growth in the market.

  • Focus on Emerging Markets:

According to reports, Sears is struggling in a highly competitive market. So, they should focus on less competitive markets or emerging markets in order to increase its operations and catalyze its growth. These unsaturated markets are ideal for Sears.

  • Target Younger Age Group:

As the population mainly consists of younger people and Gen-Z, so it is important to target this type of customers by offering their types of products. In this way, Sears can improve its market growth and reach.

  • Refocus on Appliances:

It is imperative for Sears to refocus on its appliances because many retailers like J.C. Penny announced it’s pulling out from the appliance business in order to focus on apparel. So, they have the potential to increase their sales by refocusing on appliances.

 

Sears SWOT analysis | SWOT Analysis of Sears

Threats of Sears:

 

  • Economic Recession:

The current situation has devastated the operations of many companies and businesses. Sears is not prepared for such kinds of events. That’s why they face a huge decline in their sales due to not having enough and a strong online presence. These threats can damage the company’s revenue system and growth.

  • Stiff Competition:

The market is full of many big players like Home Depot, Best Buy, and many more that offer the same category of products. These companies or brands could be a huge threat to Sears’s profits and market reach.

  • Increasing Prices:

As the cost of raw material and labor is increasing day by day, this thing could be a big threat in terms of profits and sales. It is really hard for Sears to manage these things.

  • Trade Tensions:

Due to geopolitical tensions with other governments, many countries strict their tariff laws. These things affect the company’s working and also burdened their investment and lead to many other issues. These tensions threaten company supplies such as Electrolux that works from outside the United States.

  • Rising Counterfeits:

Due to the presence of counterfeits and imitations in the market that offers the same product at a lower price, it is really hard for Sears to fight with its counterfeits. These counterfeits threaten Sears’s profitability.

 

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