Essay About Office Depot Locations And Different Business Segments

Office Depot
Office Depot
As the sales continued to drop and mystery shopping scores continued to rise, CEO Kevin Peters was a bit confused. He contemplated many options before deciding on taking a road trip to 70 Office Depot locations nationwide. He never told the stores he was coming, but rather dressed in jeans and a t-shirt. “He would sit for a while in the parking lots, walk the isles, and chat with customers” (‘American Banker Magazine’ 11). While on the road trip, Peters discovered that customers were leaving without shopping bags in an industry where people come with the intent to buy. After talking with several customers, Peters realized that people had a hard time finding what they were looking for. As for the rising mystery shopping scores, they were just making sure the floors were clean and the shelves were stocked instead of asking the customers if they needed help finding anything.

The company’s revenues were $11, 633.09 million during 2010, which was a decrease of 4.21% from 2009. The net loss, however, was $44.62 million for 2010 compared to a net loss of $596.47 million for 2009. Although 2010 was a much better year, Office Depot still lost almost 45 million and has some work to do in order to see positive profits. According to MSN Money, the P/E for Office Depot is -4.98. The price of the stock is $2.17 and the earnings per share is $-0.46. So for every $1 you invest in Office Depot, you’re going to lose $4.98. In order for Office Depot to make their P/E better, they must first raise their net profit, and the price of the stock should take care of itself.

Office Depot has three different business segments, which include North American Retail, North American Business Solutions, and International. In the North American retail section, Office depot sells office supplies and other business related products. They also have a design and copy center for consumers and small businesses. This division is their largest division and accounts for 5.1 billion in sales or 42% of their total sales. The North American Business Solutions division provides office supplies directly to medium and large businesses using sales agents and their website; this accounts for 3.48 billion in sales or 29% of their total sales. The International division operates retail stores and sells directly to internal businesses. This division accounts for 3.5 billion in sales or 29% of their total sales. They have various ways of operating internationally including company owned stores, joint ventures, and franchises. This is one reason why acquisitions are so important to them. When they want to expand their business internationally they acquire or partner within a company who has a good position in the market they’re entering (MSN Money).

Office Depot’s Supply Chain is one of their core competencies. They pride themselves on getting supplies to businesses