What Happened to Circuit City

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Summer Trimester Project
This paper demonstrates Hodges University’s learning outcome of Initiative.
James E Boardman – Wheel (Third)
Hodges University

MAN 6410 Managing International Cultural Differences
MAN 6430 Developing and Managing Strategy in a Global Environment
Dr. Nancey Wyant / Professor John Meyer
Due: July 28, 2010
Submitted: August 8, 2010

Graded by MSM Instructor: __________________________
Grade Awarded: __________________________________
Writing Rubric Completed: _________________________
Circuit City officially closed its doors on March 31, 2009 and over 40,000 employees lost their jobs. Through thorough research and having experience working at the organization for 5 years, it is in the opinion of this researcher that Circuit City went out of business because of poor management decisions made by the CEO (Phillip Schoonover). Schoonover in 2007 decided it was in the best interest of the organization to release 3,400 higher paid employees and replace them with new employees at minimum wage. This hurt the organization as its customer service decreased dramatically following the layoffs.

The purpose of this paper is to review research conducted on the topic of strategic management and then apply that research to a recent situation that occurred within an organization. This researcher will provide research and insights as to what happened at Circuit City Inc. and discuss how the organization may have made better decisions that would have kept its doors open. Poor strategic management by the organization’s upper management staff represented a key role in why Circuit City closed its doors in 2009 (Kardos, 2008).

The electronics retailer giant known as Circuit City recently closed all of its stores due to poor management decisions made in its last years. Circuit City was once the leading consumer electronics retailer for many years prior to Best Buy Inc. opening more stores and staying ahead of the technology curve. Today, Circuit City’s name still operates under a website selling wholesale electronics run by Systemax. It is in the opinion of this researcher that if different strategic planning were utilized, Circuit City could have remained the top electronics retailer and prevented its failure and ultimately resulting in the closing its doors.

The following paper will also revolve around the topic of strategic planning by explaining what it is, where it came from and why it is important for organizational success. Strategic planning in business has been a concept that has only been around for forty years. On the contrast, strategy in general has been around for thousands of years as it was utilized in ancient civilizations for innovation and war. This researcher will go in depth as to why strategic management in today’s economy is crucial for organizational survival.

History and Theories of Strategic Management
According to Wright (2007), the definition of strategic management is the process of developing and executing a series of competitive moves to enhance the success of the organization both in the present and in the future. To develop a strategy, an organization must first conduct a thorough analysis of its business environment and also figure out what its strengths, weaknesses, opportunities and threats are (SWOT analysis). Once an analysis of the organization is completed, the objectives that the organization is trying to achieve should be made, followed by a plan or strategy to meet those objectives.

However, although a SWOT analysis for an organization does have its advantages; it needs to be conducted properly if it is going to be effective. David Hussey, who has written over thirty books on strategic management and has over thirty-five years experience in management consulting, believes that the strengths and weaknesses aspect of a SWOT analysis need to be very analytical (Hussey, 2002). Hussey...
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