Edward Lampert took over as CEO of Sears in the 2000s with no retail experience and instituted changes that deeply damaged the company, such as instituting absentee leadership, creating internal competition between divisions, cutting advertising, and failing to understand Sears' customer base. While Lampert correctly saw that Amazon's model was the future, his stubborn management style and treating of employees as replaceable parts led to plummeting sales and the demise of the iconic retailer. The document proposes strategic plans for Sears to reestablish itself by focusing on competitive low prices, strong supplier relationships, employee appreciation, and revamping its brand identity.

1. INTRODUCTION
SEARS: A CASE
STUDY IN HOW NOT
TO RUN A RETAILER

2. DOMINANT
IMAGE OF
CHANGE
MANAGER
• The dominant image of the change
manager comes across as that of a
directing type of change manager
exercising a controlling type of
management to achieve an
intended outcome.
• Edward Lampert had a background
in investments but no retail
experience at that time.

3. PROBLEMS IN LAMPERT'S MANAGEMENT
The first problem concerns the way Lampert treated his
employees. He, for example, institutionalized absentee
leadership. In addition, Lampert was widely criticized for
“shredding” employees during management meetings, and
he burned through 3 CEOs in eight years before installing
himself as CEO. He split the business into a large number of
competing divisions, believing that competition between
them would increase profits. The result was massive internal
rivalry and falling sales. Lampert’s management style was
deeply problematic because it created internal divisions,
rivalries, and mistrust.
The second problem concerns the fact that Lampert knew
very little about Sears’s core business. Lampert cut back on
TV and newspaper advertising and started email marketing,
which was cheaper—but Sears’s customers were much less
likely to read the email marketing and business declined
accordingly. Lampert then cut back on purchasing goods for
his stores in order to avoid marking down items at season’s
end; as a result, many departments had empty shelves
causing customers to conclude that Sears was going out of
business. He refused to invest in the maintenance of his
stores, allowing them to become dingy and shoddy. Rather
than offering discounts, he raised prices. In addition,
Lampert didn’t understand Sears’s customer base.

4. PROBLEMS IN LAMPERT'S
MANAGEMENT
The third problem concerns Lampert’s
judgment. He was correct in his view that the
Amazon model was the future of retailing. But
a vision is nothing without implementation
and the way to transform a huge bargain-
priced retail operation into a just-in-time
logistics company is not obvious. Lampert
appears to be quite stubborn and incapable
of admitting he has made a mistake.
For Lampert, Sears was a pure financial play,
an investment designed to make him even
wealthier. The result: working for Lampert
would be like working for Louis XIV—the only
reward would be the fact that one has a job,
and having a job is better than not having a
job. This of course creates an alienated work
force accompanied by high absenteeism, high
turnover, low productivity, and poor customer
service ratings.

5. INTERNAL
PRESSURES
FOR
CHANGE
Decentralized focus in services and offerings.
Tense upper management environment.
High employee turnover & insufficient employee training.
Bloated brand portfolio.
Attempts to compete in non-similar markets.
Inability to capture younger demographic.
Weak and inadequate R & D.
Low inventory turnover.

6. EXTERNAL PRESSURES FOR CHANGE
Intense competition in
retail industry from
established old
competitors like
Walmart.
Disruptive impact
of online
ecommerce retailer like
Amazon on retail
industry.
Lower barriers to entry
Dynamic laws and
regulations
Vulnerability and
sensitivity to macro-
economic trends
Razor thin margins and
capital intensive
operations
Complexities involved in
global supply chain and
logistics
Keeping up with
constantly changing
consumer behavior,
trends and preferences
Rapid advancements in
technological
innovations

10. PROPOSED
STRATEGIC
PLANS
Current Mission Statement
"We are committed to improving the lives of our customers by providing quality
services, products and solutions that earn their trust and build lifetime relationships"
Sears were successful because of their ability to implement strategies that aligned
with its mission statement
Purpose Statement
The purpose of this strategic plan is to reestablish Sears as one of the leading retail/
department stores globally as it was in the 1900s. This strategic plan will outline
various opportunities that will result in increased revenue profit and investor returns.
One of the main focuses is to establish the identity of Sears so that customer
satisfaction is improved

11. PROPOSED STRATEGIC
PLANS
Business Strategy
• Sears will develop a pricing strategy so that they remain
competitive in the department store/ retail industry
• Maintaining low prices so that they appeal to more customers
• Since the prices will be low the company will rely on high
volume of sales in order to maximize its profits
• In order to succeed at maintaining low prices it will have to
bargain and form stronger relationships with its suppliers and
manufacturers
Industry Strategy
Based on its Business Strategy they will be competing directly
with Walmart as they too will be offing at low prices

12. PROPOSED
STRATEGIC
PLANS
Financial Strategy
Though Sears is currently facing financial issues but they have a
good reputation of paying back obligations. Thus, they were able
to accrue more debt in order to establish its Business Strategy
HRM Strategy
• Employee appreciation
• The hiring process will involve both online applications and
instore interviews
• The new hires will be eligible for an increase in pay post the
1st 6 months
• For leadership roles, they will mostly promote people working
within the company but they will also consider outside
professionals and consultants

13. PROPOSED
STRATEGIC PLANS
Marketing Strategy
• Revamped slogan
• Commercials
• Social media
• Community involvement
(sponsorships)
Operations Strategy
• Retail and online

14. PROPOSED
STRATEGIC PLANS
Laws and Regulations Strategy
• Advertising laws
• Customer protection laws
• Misleading pricing laws