Staples Business Depot announced on Tuesday that it must close more stores. They are undertaking new cost-cutting measures as they try to grow as a company in a struggling economy. The problem is that stores like Wal-mart and online distributors like Amazon can sell the very similar products for a much cheaper price. There are no longer points of difference between Staples and discount stores such as Wal-mart, except for the fact that Staples is more expensive. Wal-mart is using its strength as a giant department store to cut prices and put companies like Staples out of business. Another problem is people today are reducing their discretionary spending. People are better informed of what to buy, and will attempt to save money at all costs.
These new measures that Staples is taking reportedly will save the company $250 million by 2015.
What do you think?
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Do you think without any positive points of difference due to this change in the market, Staples will go in the same direction Blockbuster did, down?
That is where this whole market seems to be going as their are just too many points of parity between big corporations like Wal-mart and smaller, more specialized firms like Staples. I don’t believe that it is the same situation as Blockbuser/Roger’s Video vs. Netflix, but I do believe that Staples and Office Depot are headed in the same direction as video rental companies did. They just can’t keep up with the low prices that larger stores can afford to sell their products at.