BA 3103 Critical Analysis Paper Pier 1
Kristin Colgan
Dr. Andy Hornett
BA 3103 MWF 9am
October 30, 2014
Critical Analysis Paper on Pier 1 Imports
Pier 1 Imports has earned a place as one of the leading competitors in the home furnishing industry with a focus on their brick-and-mortar storefronts. Alex Smith, CEO, believes that shopping for home furnishings is a visual impulse buy and has concentrated on creating an in-store experience for customers with bold, colored textiles and tableware.
Pier 1 excels in its strategy as a niche differentiator with the right product selection in the specialty segment of home furnishings. So, why did Pier 1 Imports decide to maintain its brick-and mortar strategy in the height of the e-commerce era? This paper will help us better understand this decision by employing four analytical frameworks. We begin with the PEST analysis which helps us identify and understand global trends.
Figure 1: PEST Analysis of Global Trends: 2010-2015
Political
Increased global communication and relationships
Economic
Inflation increasing globally
Increasing oil costs
Increasing commodity pricing
Social
Social Media
Decline in population
Demographics/Mobility
Technological
E-commerce
Mobile Applications/Shopping
Figure 1 presents a global trend analysis for the period 2010-2015 in four areas: political, economic, social, and technological. Both social and technological trends are key components. Technological advances have led to an e-commerce boom making shopping only a click away with online shopping and at consumer’s fingertips with mobile applications. The social trend of Facebook, Twitter, YouTube, etc. present a platform for free advertising and word of mouth.
Figure 2: Porter’s Six Forces Analysis of the Home Furnishing Industry
Supplier Power - High
Necessity in life
Multiple rooms
Threat of Substitution-Low
None
Threat of Entry -Medium
Saturated industry
Fairly inexpensive to enter the online-only area of the industry
Expensive to enter with brick-and-mortar strategy
Dr. Andy Hornett
BA 3103 MWF 9am
October 30, 2014
Critical Analysis Paper on Pier 1 Imports
Pier 1 Imports has earned a place as one of the leading competitors in the home furnishing industry with a focus on their brick-and-mortar storefronts. Alex Smith, CEO, believes that shopping for home furnishings is a visual impulse buy and has concentrated on creating an in-store experience for customers with bold, colored textiles and tableware.
Pier 1 excels in its strategy as a niche differentiator with the right product selection in the specialty segment of home furnishings. So, why did Pier 1 Imports decide to maintain its brick-and mortar strategy in the height of the e-commerce era? This paper will help us better understand this decision by employing four analytical frameworks. We begin with the PEST analysis which helps us identify and understand global trends.
Figure 1: PEST Analysis of Global Trends: 2010-2015
Political
Increased global communication and relationships
Economic
Inflation increasing globally
Increasing oil costs
Increasing commodity pricing
Social
Social Media
Decline in population
Demographics/Mobility
Technological
E-commerce
Mobile Applications/Shopping
Figure 1 presents a global trend analysis for the period 2010-2015 in four areas: political, economic, social, and technological. Both social and technological trends are key components. Technological advances have led to an e-commerce boom making shopping only a click away with online shopping and at consumer’s fingertips with mobile applications. The social trend of Facebook, Twitter, YouTube, etc. present a platform for free advertising and word of mouth.
Figure 2: Porter’s Six Forces Analysis of the Home Furnishing Industry
Supplier Power - High
Necessity in life
Multiple rooms
Threat of Substitution-Low
None
Threat of Entry -Medium
Saturated industry
Fairly inexpensive to enter the online-only area of the industry
Expensive to enter with brick-and-mortar strategy
References: Dishman, Lydia. “Why Pier 1 Is Choosing Bricks Over Clicks-And Winning.” Forbes, Forbes Magazine, 12 Oct. 2012 Web 22 Sept. 2014 http://www.forbes.com/sites/lydiadishman/2012/10/18/why-pier-1-is-choosing-bricks- over-clicks-and-winning/