Circuit City Stores

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Circuit City Stores

Vision & mission: the 5 “S” philosophy

Objectives:
* achieve leading market share in each served market in order to benefit from ad and logistics synergies * resist take over attempt

Current Business Strategy
* In retail stores, they measure by per unit square foot to measure capacity( exhibit 3b) * They sell brand name product
* Cut commissions
* Customer survey to support customer satisfaction
* Switched management teams.
* Invested in the POS system
* Store remodeling, ex. Expanding to Canada, with small stores

Evaluate

External analysis
* Market: is massive, growing at 8 % a year
5 forces:
* Rivalry:
- Cost circuit city more to get out of business
- Number of the competitors; and revenue are big, these will intense the rivalry - Product mix: there is a lot of product differentiation, ability to differentiate, can focus on different target market. This makes the market rivalry less intense. - Customer services is declining, could lead to increasing?

* Barrier to entry:
- not hard to enter the market
- not hard to open a specialty electronic store; no need to special skills, and no need for massive inventory Brand loyalty to the product not the store

* Substitute for electronic retail
* Ebay, online ( not very competitive, not a strong force)

* Customer
* No brand loyalty, low switching cost
* Purchase dispersed
* Demand is not declining

* Supplier
* Specific supplier are required
* Fast and efficient supply chain
* Require good relationship with supplier is critical (ex DVD sales) * No shortage in supplier
* Can supplier integrate forward? Ex dell, apple , Sony

Key success factor
* Good variety in products
* Convenience
* Competitive price
* Latest technology
* Good services
* Knowledge
* Technology changing ( refer to exhibit)
* Product life cycle changing
* Low cost...
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