Where Should Sears Source the Dishwashers From?

Where should Sears source the dishwashers from?

Sears is the giant leading broad line retailer providing merchandise and related services. In keeping with its sourcing philosophy, Sears generally prefers to work with one, rather than multiple suppliers. When the supplier does not offer a specific type of appliance, Sears would source it somewhere else. Sears' objective is to share as much as possible of the production and assembly process with the suppliers' products. Based on the readings one important component of Sears' sourcing strategy is to ensure that its suppliers have stable top management over a long term.

Sears sources its dishwashers from D&M, because of D&M's cost position. They would not find elsewhere the quality and the price that D&M offers. Sears itself designs the dishwashers based on the customer's preferences and provides them the best quality with the best price named Kenmore.

GE is the toughest competitor to Sears as well as to D&M and considering sourcing from GE would not be feasible, because GE's policy is that GE product would carry GE name. Now GE is a customer of Sears that in the same time competes with Kenmore's products.

Another souring possibility could have been Whirlpool which like GE uses its name for its products, but for Sears it would not make economic sense to go towards that direction. After Sears, GE, and Whirlpool, there really is no full-line name in the market of any significance.

Sears as well as the customers are content with D&M's products, but one important issue could be if D&M will keep up with its R&D in order to continue competing with GE as well as with Whirlpool. After all these years it will be very difficult for Sears to pull back from D&M and go after another supplier.

Sears is very conscious of its customers' desire for to quality at an affordable price, because Sears knows that the price value trade off is still number one motivation.

Only Sears sells the top six appliance brands, including: Amana, Frigidaire, GE, Maytag, Whirlpool and the nation's leading appliance brand Kenmore and Kenmore Elite.