Causes of Sears’ Downfall and Suggestions for Amazon
Amazon is one of the most innovative ideas to come to light in our century. It has become one of the biggest retailers of our time and continues to grow each year. Who was there before Amazon though? Who was the go-to retailer for when families needed to buy something? That retailer was Sears. Unfortunately, Sears had a downfall it could not get back up from and now Amazon is being told to use caution and make sure they do not make the same mistakes the once successful retailer did before it crashed.
This is the Case Study I will be writing about throughout this paper. The downfall of Sears a once great retailer and how Amazon our modern day Sears can learn from their mistakes and continue to be one of the biggest growing retailers in this century. Throughout my readings I have learned of many perspectives to relate my Case Study to but there is one that sticks out the most to me and that would be Classical Management Perspective. I will be using the Machine Metaphor to relate my Case Study to certain concepts.
The background of Sears and how they grew so fast and became so successful is quite interesting and is the focus of this next section. So, how did Sears start off and become the success they were before the crash? Well, Sears was founded and known for only selling one product and shipping to people’s homes (just like amazon). After a few years they started operating physical stores throughout the U.S and was said to be “light-years ahead of its peers in both technology and strategy, with a devotion to low prices, unrivaled choice, and customer service (Thompson, 2017)”. Sears had a great take-off but had a few hiccups along the ride that helped change how they operated. The first issue arose after WWI when the recession hit and they were graciously saved by a man named Robert Wood. Wood was “a retired military general who studied the U.S. Census and Statistical Abstract of the United States (Thompson, 2017)”.
Robert Wood influenced the move of Sears into the South and West of the United States. This ultimately ended up sprouting 300 stores within 4 years (from 1925 – 1929). After doing extremely well they had to face another issue in the 70’s and 80’s when there was a decline in manufacturing jobs. The next decisions that were made for Sears is what ultimately caused their downfall. They didn’t think they needed to grow or alter their vision as the century was changing, they thought they just needed more business. So they decided to buy a real estate company. So here was Sears, selling car parts, clothing, appliances, and now stocks!
There downfall then came not because they were not successful at stocks but because they turned their attention to that instead of really taking action and worrying about a huge ongoing issue with the stores. Then the rise of Walmart came and their new innovative idea of selling customers what they want for cheaper prices. If Amazon could learn anything from the downfall of Sears it would be that they have to always be open to changing their processes and efficiencies for customers. Without this, they too will come to a halt and sadly end up the same way Sears did. Being innovative and serving their customers is the only way Amazon will stay on top and continue to thrive!
The Organizational Communication Perspective I chose is the Classical Management Perspective. Classical Management Perspective “focuses on the efficiency, productivity, and output of employees as well as of the organization as a whole (lumenlearning.com, 2018).” The Machine Metaphor is the perfect idea when it comes to the relevant concepts that relate to my Case Study. The point of a metaphor in organizational theorizing “proposes that we can learn something about organizations by considering a different object that an organization can resemble (Miller, pg 18, 2017).”
The Machine metaphor has four aspects I will highlight and they are specialization, standardization, replace-ability, and predictable. Specialization which is also referred to as division of labor, is about a machine being looked at like having a car engine and how every part like a car engine has a specific role it plays and this then allows everything else to function and work. The second aspect Standardization which includes the third aspect Replace-ability is about the parts of one machine being the same in another and with this means they can be easily replaced. The fourth aspect has to do with machines being predictable. This aspect covers how there are rules that are made for machines and how they operate and are built. If something goes wrong or does not work anymore, if one thinks logically they should be able to diagnose and fix the machine. It states this to show this is the same for an organization or business. If an organization of business is not functioning correctly it can be fixed by rational with the rules that are applied correctly or incorrectly.
Two key applications that I would do when it comes to Amazon learning from Sears’s mistake would be, to focus on selling what consumers are wanting and stay focused on new innovative ways to evolve as the world and people do. When it comes to selling what consumers want you have to stay educated and involved with all of the new products that come out that cause consumers to go into frenzy if you will. Staying educated on every aspect of this is important. Amazon should stay updated on technology, toys, appliances, clothing, jewelry, etc. Covering all areas across the broad will make them unique and stand out against other retailers. The Machine is a great tool to use on how to stay educated. For example, every business has a specific role or ideals they follow. It is what the company has been founded for. So, for Amazon their role should be to continuously be looking to sell things to bring consumers to their website. They as a company cannot function without consumers so this is essential. Secondly, without doing this they are just like any other business selling things online. This aspect shows them they can be easily replaced just like Sears was so staying educated is important for their survival as a thriving company. Finally, if a hiccup happens and they are not selling what consumers are after, they can just like any other organization or business think rationally and become more involved on what consumers want and/or need and change it. Yes a hiccup can happen but if they are moldable they will always keep their heads above water.
The second application I would like to talk about is innovative ways to evolve as the world and people do. The Machine is also a great tool for this as well. First, when it comes to our world and people evolving, this is something that has been going on for centuries so it is not something new. Businesses have always had to think innovatively to pull in consumers on the next big thing so this application should always be something they practice. If they always practice this they will never have to wonder of other parts of the business isn’t working. They will always have consumers buying from them. Secondly, just like mentioned before Amazon can be replaced just like Sears was but if the business is there and they continue to grow and evolve they won’t have to worry about competitors. Finally, if a hiccup happens thinking rationally and smart is what is going to save them. One of Sear’s biggest mistakes was focusing on their stocks instead of listening to others and trying to fix the store itself. They thought they just needed more stores instead of revenue and ultimately lead to their downfall. If Amazon stays focused and innovative and smart they should do well for a long time.
My one recommendation for this case would be ultimately to listen to their consumers. A lot of downfalls with big companies are because they don’t cater to all consumers and are not willing to evolve with its consumers. Organizations or businesses do not take risks sometimes and it ends up slowly but surely tearing them down. Even though Sears’s downfall was unfortunate I believe Amazon will continue to rise and be successful. They as a company thus far are always trying to have more products and bring those products to their customers as soon as possible.
Sear’s started off just like Amazon did by bringing products directly to their door. They had a few hiccups along the way and one of them helped jumpstart them into a massive business that grew around 300 stores in just 4 years. The next hiccup really hit them bad and instead of recognizing this hiccup as a huge issue and trying to fix it they focused on another project with stocks and this is ultimately what caused their downfall. Amazon is already a very big successful company but my two applications I would have for them would be to focus on selling what consumers are wanting and stay focused on new innovative ways to evolve as the world and people do. This is so important when it comes to businesses thriving on our world and I think Amazon will stay successful by practicing these applications. My one recommendation would be to listen to their consumers. As we all know, you want to please your consumers and keep them coming to your store or website. Happy customers let’s businesses know they are selling great products and doing well in what they specialize in. I believe Amazon will be around for a long time and I cannot wait to see where they will be in just the next five years! As Lily Tomlin said “the road to success is always under construction (lamountaincoaching.com, 2018)”.
- Thompson, D. (2017, October 04). Sears Was the Amazon of Its Time-Until It Made Preventable Mistakes. Retrieved November 10, 2018, from https://www.theatlantic.com/business/archive/2017/10/amazon-sears-mistakes/541926/.
- Roseyenriquez. (2014, December 05). Understanding the Machine Metaphor. Retrieved November 11, 2018, from https://roseenriquez.wordpress.com/2014/10/07/machine-metaphor/.
- Boundless. (n.d.). Boundless Management. Retrieved November 11, 2018, from https://courses.lumenlearning.com/boundless-management/chapter/classical-perspectives/.
- Miller, K. (2015). Organizational Communication Approaches and Processes (7th ed.). Cengage Learning.
- LaMountain, D., & LaMountain, D. L. (2018, February 04). The Road to Success is Always under Construction. Retrieved from https://lamountaincoaching.com/success/the-road-to-success-is-always-under-construction-lily-tomlin/.