The ruling came to fruition and the merger between Staples and Office Depot has failed. The court upheld the fight of the FTC and did not approve the merger causing breakup costs, decline in sales, and an overall concerning impact on the market.
What does this mean for Staples and Office Depot?
First of all Staples and Office Depot still rule the roost. Although Staples had to pay millions of dollars to Office Depot and Office Depot numbers took an initial dip, they are both at the top of their game. Both companies continue to strive in innovation and look to expand their offering in many categories other than office supplies. As I mentioned in previous posts, the companies are working with customers on a one-stop-shop approach for copy center solutions, water and coffee services, technology, and other office service needs. They will both continue to grow as leaders in their market place.
Now the competition begins again. Office Depot is already trying to take the title contending for summer sales and back to school pricing…yes summer has just begun and back to school sales are already on the way. Maybe in the future they will become best friends with Staples again and look to merge, but for now they have to focus on themselves and grow their business.
Where does this leave the originally concerned customer? It puts them in the best light to leverage the playing field. With that said, here is a reminder of some best practices for going to market and sourcing the various services discussed above.
Once you have determined the categories you are looking to source; Office supplies and other related products, try to standardize the spend information. This will allow you to identify the suppliers involved, products and services being purchased, and overall spend for these purchases. Looking at the data in a holistic view makes it easier to see any overlap between suppliers and products/services being procured resulting in opportunities for vendor consolidation and purchase optimization. For example, your corporate location may be purchasing with Staples but subsidiaries and remote sites may be using Office Depot., including all spend will provide leverage when looking at the competitive landscape.
At this point you should know who the supply base is and the products/services they are capable of providing. As I have talked about Staples and Office Depot being the big wigs, don’t forget to consider the smaller or more regional players who can still meet your demands and product or service requirements for a potentially greater savings opportunity. Even if a change is not viable, LEVERAGE LEVERAGE LEVERAGE. While Staples and Office Depot were so focused on the merger, other companies were focused on spreading their wings into new territories in order to be able to compete for the office supply business.
Moral of the story:
Always do your due diligence and keep an eye out for the most important breaking news that may impact your buying decisions. A good procurement pro already knows what is going on with Staples and Office Depot – but an experienced pro knows how to use it to their advantage.