Circuit City Core Competencies

One of the main reasons that Circuit City became so successful is it has core competencies. The core competencies help Circuit get more economic value than its competitors. On the one hand, Circuit City made IT investments such as point-of-sale and inventory-tracking technology, which help Circuit City to strengthen the connection with retail stores. At the same time, the IT support also makes Circuit City can track the details of customer preferences to make the correct decision to trends in a timely manner. On the other hand, Circuit City built and maintain customer loyalty through superior service. Circuit City uses highly motivated and well-trained sales personnel. The strategic position of Circuit City is differentiation. The IT support and superior customer service make Circuit City get competitive advantages.
This decision is for getting more cost-competitive with Best Buy and online retailers, but this decision actually made Circuit City lost its one of the most important competitive advantage: superior customer service. The result is Circuit City lost its customer loyalty, and meanwhile, Circuit City’s main competitor Best Buy recruit Circuit City’s top salespeople so that Best Buy gets this competitive advantage. Except this, Circuit City pays less attention to upgrade, and protect its core competencies, which caused Circuit City lost its advantages and let Best Buy and online retailers such as Amazon developed better than Circuit City. Circuit City’s wrong judgement of popular trend let them make the wrong investment and development direction. For example, they created CarMax and did video rentals. During the time of competitive disadvantage, Circuit City’s strategic position is cost