http://www.cbc.ca/news/business/staples-closes-15-canadian-stores-1.2783780
Staples is experiencing intense competition as e-commerce sales increase on Amazon.com and Best Buy.
According to Porter’s Five Forces, the threat of rivalry (e-commerce), who benefit from low costs of production and thus low prices, is preventing Staples from reaching its previous profit levels. Hence, Staples is trying to differentiate its service by offering more efficient customer service in order to compete against e-commerce. Since a major downfall of making purchases online is the time lag between buying and receiving the product, Staples should continue to entice customers with time efficient purchasing processes to remain competitive.
There is a low switching cost for consumers who choose to buy online instead of from a Staples store. Moreover, there is low levels of product differentiation for Staples, who may also be able to resist the resulting increase in competition by strengthening its brand name. As a result, I analyze that Staples is making a good decision in attempting to create points of difference in their service in order to sustain brand loyalty. It is also recommendable for Staples to innovate new products to attract customers as they cannot benefit from charging low prices as online businesses do.