Case Study

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RadioShack and Best Buy: Comparing Financial Performance using DuPont Model: Both RadioShack and Best Buy sell consumer electronics merchandise. RadioShack targets three family oriented customer segments: (1) active suburban families with teenage children, (2) urban ¨flash”consumers with preteen kids, and (3) ¨small-town values¨ families with children of all ages. Through its stores, kiosks and web site, RadioShack provides families with accessories, consumer electronics solutions and proprietary novelty products. RadioShack has over 5000 stores in US. The stores sell both private-labels and national brands. The stores average 2500 sq.ft. The product categories offered include mobile and wireless phones; direct-to-home satellite systems; computers and accessories; general and special purpose batteries; wire, cable and connectivity products; digital cameras; radio-controlled cars and other toys and satellite radios. RadioShack also has 2000 dealers servicing smaller markets, 500 kiosks located in Samś Club stores. Best Buy operates 700 category killer stores in US plus a web site. The stores average 42000 sq.ft. The stores offer merchandise in four product groups: consumer electronics (TVs, digital cameras, DVD players, camcorders, MP3 players, car stereos, home theaters etc), home office (desktop and notebook computers, telephones and networking accessories), entertainment software (DVDs, video game hardware, CDs, Computer softwares etc) and appliances (microwave ovens, vacuum cleaners and other housewares). In-store services include computer set-up, repair and software installations. In-home service includes installation of computers, appliances and home theater systems. Exhibit 1 gives the financial data for the year 2004.

Compare the performances of Radioshack and Bestbuy using DuPont model.

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