Pier Import 1 Analysis

Strengths

PIR's internal strengths are financial management, technology development, and efficient operation. PIR's current ratio was 23.77% higher than WSM's current ratio. PIR's quick ratio was 37.89% higher than WSM's quick ratio (PIR, 2011; WSM, 2012). PIR was more able to pay its short term obligation from its current asset than WSM. PIR had low financial risk to pay its debts. PIR's long term debt to equity in 2010 was 0.02 which was 50% lower than WSM's long term debt to equity in 2011 (PIR, 2011; WSM, 2012). Average revenue per dollar invested in information technology in the past three year of PIR was 1.28% higher than WSM. PIR's cost per square foot in 2010 was 41.42% lower than BBBY's and 72.98 % lower than WSM's. PIR's inventory per square foot in 2010 was 46.39% lower than BBBY's and 68.76% lower than WSM's. PIR's operating margin increased from negative 0.25% in 2009 to 7.4% in 2010 (BBBY, 2011; PIR, 2011; WSM, 2012). PIR's operation is more efficiency than BBBY and WSM.

Weaknesses

The internal weaknesses of PIR are human resource management, inbound logistic, organization structure, and marketing and sale. WSM' revenue per employee in 2011 was 68.39% higher than PIR's revenue per employee in 2010. WSM's net income per employee was 49.54% higher than PIR (PIR, 2011; WSM, 2012). PIR employees have lower efficiency to generate revenue than WSM. WSM had 57.62% higher efficiency in inventory turnover than PIR. PIR had greater days sales in inventory than WSM 51.69% in 2010 (PIR, 2011; WSM, 2012). PIR used marketing and sales expenses less effectively than WSM did. PIR generated $168 in revenue per square foot in 2010, whereas WSM generated $648 in revenue per square foot in 2011 (PIR, 2011; WSM, 2012). The average working period of WSM' the top management was 87.5% higher than PIR. WSM' executive team worked longer and was more experienced than PIR's team.

Opportunities

The external opportunities of PIR are increasing interconnectivity, increasing dominant economies, changing U.S composition, medium to high level of entry barrier, low bargaining power of buyers, and low bargaining power of suppliers. The number of worldwide internet users increased 13.1%, compared to 4% of US internet users during 2006 to 2011 (GMID, 2012c). Internet retailing increased 16.8% per year in the world, compared to 10.4% in the U.S. from 2006 to 2011 (GMID, 2012m). The increasing interconnectivity is an opportunity for PIR to market its products through different channels such as social networks and to increase sale by building shopping online. The increasing of dominant economies is another opportunity for PIR to expend its business to these countries, such as China and India. The CAGR of China's consumer expenditures and