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I’m not defending Sears, but Procter and Gamble sets up its brands in internal competition.

• cepth 8y ago
  If you reference the article in that comment thread above: "Large technology companies and industrial conglomerates such as General Electric also take a decentralized approach. But retailers tend to favor an integrated model. That way, different divisions can be compelled to make sacrifices, such as discounting goods, to attract shoppers to stores." Competition sounds great in theory. At Sears, Lampert divided the company into 30 units, each with its own profit and loss statement. Space in the weekly circular was farmed out to the unit bidding the most, resulting in: -Toys for boys being advertised on Mother's day, because that department bid the most for space in the circular -Lingerie being featured next to tools. --- Because each unit had its own P&L, and its managers were compensated accordingly: -One Sears tool brand choosing to use an external battery supplier, because it didn't want to pay royalties to a Sears division that made lithium-ion batteries -Sears stores not opening early for Black Friday in 2011, despite all its peers doing so, because to do so required agreement among the 30 business unit heads --- It is perfectly reasonable for retail buyers to consider what mix of products to use, and whether to devote shelf space to external or house brands. It is not reasonable for the instructive structure to be constructed in a way where the company loses customers and sales because each individual unit's decision makers have a financial incentive to do so. No other major retailer operates/operated this way, and I'd wager that no one will try doing so in the future.