PESTEL analysis of Staples Inc.
Staples Inc. is an American company, based in Framingham, Massachusetts. It specializes in a wide range of business machine, business services, office supplies, office furniture and technology products. Tom Stemberg founded the company in 1986. Today, it has over 91,000 employees, making it one of the largest businesses in America in terms of labor force. With about 2281 stores scattered around the world, Staples Inc. supplies its products in 26 more countries apart from the United States. In a 2010 survey, the company had annual revenue of about $24.5 billion. This PESTEL analysis of Staples Inc. shows how political, economical, social, technological, environmental and legal factors influence the company’s performance.
Politics: PESTEL analysis of Staples Inc
The political environment continues to affect the manner in which Staples conducts its business in America and in other regions globally. It has to adjust to government policies and unprecedented changes in regulation by authorities. For instance, the rising cost of fuel in China because of politics is affecting the supply chain of the company, resulting into rising of commodity prices. This in turn affects the purchasing power of customers and profits.
In addition, price fixing amongst leading retailers in the United Kingdom may have negative effects on the industry, and especially on Staples. Its customers are also concerned with the company’s monopolistic status in office supplies. Today, students buying laptops, printers and other accessories prefer Staples than any other retailer. However, Staples may experience a drop in sales after political intrigues that are likely to reduce the number of students studying in the UK. Besides, the company is likely to save a lot of money when the UK government drops corporation tax from 30% to 28%.
Economical factors affecting Staples Inc.
This PESTEL analysis of Staples Inc. shows that recession is a major threat to the company’s performance. For example, since the retailer is one of the fastest growing chains, it can provide more jobs to more people, thus reducing unemployment rates.
In addition, recession is likely to affect Staples’ profit margins since the purchasing power of its customers would drop, resulting into cautious purchases. Many may avoid spending on luxuries, something that will affect Staples sales.
Moreover, online buying competition in different segments of the sector has led to Staples giving out a range of incentives. This has affected profits since the company has to adjust its prices downwards to meet the competition
Social Factors in PESTEL analysis of Staples Inc.
Staples Inc. remains committed to meeting the needs of its customers and improving their living standards. In particular, if offers products and services, with an aim of preserving natural resources and lower its environmental impact. PESTEL analysis of Staples Inc. reveals that the company embraces recycling initiatives, where it purchases and promotes products that offer post-consumer recycled materials.
Besides recycling initiatives, the company also gives back to the society by sponsoring different programs in education. This program largely focuses on charities and schools that used recyclable cartridges with the aim of saving the environment. Staples Inc. also participates in humanitarian activities, having donated huge sums of money to Haiti victims.
How Technology drives Staples Inc. Business
Staples Inc. has put in place mechanisms to ensure that it is at par with other player in the industry regarding technological advancements. For example in USA, the company has introduced self-checkpoint machines, which helps in eradicating queues.
Additionally, Staples Inc. uses Radio Frequency Identification Device (RFID), which offers a wide range of advantage to the chain. In particular, it promotes excellent inventory handling.
Environmental Factors – This PESTEL analysis of Staples Inc. further brings to light the fact that the company is committed to cutting down carbon dioxide emissions and increasing energy efficiency. In 2004, Staples launched Earth Force to equip teachers with skills for multi-disciplinary curriculum that addresses environmental issues for students in middle schools.
Legal factors – Staples adheres to legal requirements especially in protecting the environment and creating environmental conservation awareness among its consumers. It also considers the age of customers when selling products such as glues, knives, and scissors.
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References:
http://www.managementparadise.com/forums/principles-management-p-o-m/208592-swot-analysis-staples-inc.html
http://www.staples.com/