Twentysomethings sip gourmet coffee in comfy booths as a chill soundtrack plays. There’s funky art, as well as skylights and an artificial putting green, and on some nights, there’s even a happy hour with beer and wine. A W Hotel? A tech startup? No, it’s a Staples office-supply store—that longtime favorite of cubicle jockeys and back-to-school shoppers. Staples Inc. offers this co-working space—where millennials on laptops set up their instant offices—inside its store in Boston’s Brighton neighborhood, the 30-year-old chain’s original outlet. This reimagining of its oldest store is emblematic of how the company is trying to become one of the first big-box retailers to achieve further growth by serving Internet Age businesses. To accomplish this makeover, Staples is targeting a now trendy market segment that it still considers neglected: small-business owners, including independent contractors who patronize co-working spaces and entrepreneurs on Main Street and in Silicon Valley. The company’s new chief executive officer, Shira Goodman, a former consultant at Bain & Co., wants to transform a revamped Staples into a small-business consultant of sorts—an “indispensable” partner to companies, as she describes it. Goodman likes to haul out a PowerPoint slide that shows the company’s sales from online orders surpassing 80 percent by 2020, up from 60 percent today. “If you want to get our strategy on one page, this would be it,” she says of the online forecast. “If you go to most people on the street and ask about Staples, they’d go, “Oh yeah, the office-products superstore.’ But the reality is that’s very far from where we are today and even farther from where we want to be.” Goodman wants to dominate the $80 billion-a-year business of selling goods and services to U.S. midmarket companies (those employing fewer than 200) with plenty of one on-one advice on all things needed to keep operations humming. To better focus on boosting its market share of less than 5 percent with that group, Staples has sold off its overseas divisions and is shutting down unprofitable U.S. outlets. In March it said it will close 70 of its more than 1,500 stores after shuttering more than 300 over the past three years.

Questions for Discussion 

1. What planning steps has Staples’ management taken to diversify the company’s business? 

2. Do you think Staples’ decision to partner with a co-working company is a solid business plan? Why or why not? 

3. Describe some of the advantages and disadvantages of Staples focusing many of its resources on small-business customers.