Careers at Office Depot
Office Depot’s mission is to deliver winning solutions that inspire worklife.
Office Depot is a provider of office products and services. The firm operates three reportable business segments:
- North American Retail Division – Provides a wide variety of merchandise through office supply stores throughout the U.S., including Puerto Rico and the U.S. Virgin Islands. Products and services are offered in the following categories: supplies, technology, furniture, and other.
- North American Business Solutions Division – Provides nationally-branded and Office Depot branded products/services to customers in Canada and the U.S, including Puerto Rico and the Virgin Islands.
- International Division – Provides office products and services through direct mail catalogs, contract sales forces, Internet sites, retail stores, and to a lesser extent, through licensing, franchising, alliances, and other arrangements.
Patrick Sher was an entrepreneur who owned Home-Owner’s Warehouse, a home improvement products firm. In 1983 he sold it and gathered his colleagues Stephen Dougherty and Jack Kopkin to discuss a new venture. He wanted to launch a company where small businesses could purchase office supplies in bulk for discounted prices. His idea would address a major challenge they faced.
At the time small firms never needed enough items to purchase supplies in bulk, and thus could not obtain discounts from conventional retailers. This enabled retailers to sell products at manufacturers’ suggested retail prices, at a markup as high as 100%. Sher aimed to buy supplies directly from manufacturers instead of wholesalers so he could sell goods to small firms at 20-75% off retail prices.
He would also be able to keep prices low by keeping overhead costs down. This was facilitated by the fact that he was based in Florida, where commercial rents were lower than anywhere in the U.S. Sher also planned to keep costs down by making his stores minimalistic – giving them a warehouse format with no frills. He reasoned that office supply customers did not care about bells and whistles.
The team founded Office Depot and opened its first store in Fort Lauderdale, Florida in 1986. The same time period saw the launch of two other office discounters, Staples and Office Club, in other parts of the country. Office Depot was a success, and by the end of its first year it opened two more stores. By 1987, it opened seven stores in Florida and Georgia and sales reached $33 million.
Already dealing with two major competitors, the company decided to pursue an aggressive growth strategy in order to build up a big market share. In 1988 it added 16 new store locations, expanding into states such as Kentucky and Texas. Office depot was the only one of the three office discounters to turn a profit for four consecutive quarters. It filed an initial public offering in June of that year.
In 1991 the company merged with Office Club, becoming the largest retailer of office products in North America. In the next few years it grew by establishing an international presence with new stores outside the U.S. It also entered the contract stationer market by acquiring two leaders in that industry in 1993, Eastman Office Products and Wilson Stationary & Printing Company.
In 1998 Office Depot launched its first website, officedepot.com. It also merged with Viking Office Products, a direct mail marketer of office supplies, to become the top provider of office products and services worldwide. In 2013 it merged with OfficeMax. In 2015 it agreed to be purchased by competitor Staples. However, the U.S. government blocked the action and they dropped the matter.
Logo © by Antoine Weber (Wikimedia Commons) under CC BY-SA 4.0
Business model of Office Depot
Office Depot has a segmented business model, with customer groups that have slightly different needs. The company targets its offerings at consumers and businesses in need of office supplies.
Office Depot offers three primary value propositions: convenience, cost reduction, and brand/status.
The company offers convenience by making life simpler for customers. It acts as a single source for core office supplies, print and document services, business services, facilities products, furniture, and school essentials. It also enables customers to pick up products in-store within an hour when they order online.
The company reduces costs by buying most items directly from manufacturers instead of wholesalers and keeping overhead low. It also offers free delivery on qualifying orders totaling $35 or more.
The company has established a powerful brand due to its success. It generates annual revenues of $14 billion, employs 49,000 workers, and serves customers in 59 countries with over 1,800 retail stores. It maintains several prominent brands, including Office Depot, OfficeMax, Grand & Toy, and Viking, TUL, Foray, Brenton Studio, Ativa, WorkPro, Realspace, and HighMark.
Office Depot’s main channels are its office supply stores, websites, contract sales force, an outbound telephone account management sales force, and direct marketing catalogs. The company promotes its offerings through its social media pages, online/TV/radio/newspaper advertising, e-mail marketing, and loyalty programs.
Office Depot’s customer relationship is primarily of a self-service nature. Customers utilize its products and services while having limited interaction with employees. Its website provides answers to frequently asked questions. That said, there is a personal assistance component in the form of phone, e-mail, and 24/7 live chat support, as well as customer support from in-store associates.
Office Depot’s business model entails distributing products and delivering related services to customers.
Office Depot’s key partners are the manufacturers, industry wholesalers, and other primary suppliers that provide the merchandise it sells in its stores. It also partners with cooperative organizations to provide value to public sector agencies and schools through options such as everyday low pricing and aggressive rebate structures.
These include National IPA and NASPO ValuePoint. Lastly, the company maintains an affiliate program through which it invites third parties to promote it through their platforms (websites, mobile apps, etc.). Referrals that lead to a purchase result in paid commisisons.
Office Depot’s main resources are its physical resources, which include its network of stores and distribution centers located throughout the U.S. It also maintains important human resources in the form of its store associates, direct sales personnel, and customer service staff members.
Office Depot has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of goods sold, a variable cost. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.
Office Depot has two revenue streams: revenues it generates from sales of its products and revenues it generates from sales of its services to customers.
info: Roland C. Smith is a graduate of the U.S. Military Academy at West Point. He previously served as President and CEO of Delhaize America, as President and CEO of The Wendy’s Company, as CEO of Triarc Companies, and as CEO of Arby's Restaurant Group.
info: Michael Allison graduated from John Carroll University and earned a law degree at Ohio State University. He previously served as EVP, Human Resources of Office Depot and Victoria’s Secret Direct, and as SVP of Human Resources of Bank One.
info: Steve Calkins previously held several leadership roles at Office Depot, including Vice President, Deputy General Counsel; Senior Vice President, North American Business Solutions; and Executive Vice President, Contract Sales.
info: Stephen Hare earned a BBA at the University of Notre Dame and an MBA at the Harvard Business School. He previously served as Senior Vice President and Chief Financial Officer at The Wendy’s Company and as Chief Financial Officer of Arby’s Restaurant Group.
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