Circuit City Stores

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 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