Reza Primasatya
Circuit City Stores, Inc.
Prepared By:
Students of Strategic Management
Solomon Faizi
Hanh Ly
Son Nguyen
Jackie Vo
Prepared For:
Robert Wood
Professor of Strategic Management
San Jose State University
Bus 189 Sec 02
9 December 2002
Executive Summary
Circuit City History The year is 1966 and Wards, a television and appliance company established in 1949, is hot. As the one and only giant of television, the company enjoys a growth rate of 2200% since 1958 and its sales continue to skyrocket. The company continues to expand itself by offering innovative products like audio equipment and diversifies by entering markets including automotive supplies, gasoline, clothing, and even children’s toys. In 1968 the company goes public while continuing to expand and focus on innovation and differentiation, grasping each opportunity gain a hold of untapped markets. In 1977 the company renames itself Circuit City and continues to prosper as the market leader in consumer electronics. Its almost 50-year reign over other companies unfortunately lasts only until the late 1990’s due to a highly saturated market with slow growth. The consumer electronics retailing industry, in the late 1990’s, becomes essentially a “zero-sum game: each percentage sales gain for one store is a loss for another” (Sack, page 7).
Best Buy’s Winning Strategies
With changing times, emerging competitors, and shifts in customer needs, Circuit City slips into second place as Best Buy moves into first, becoming today’s market leader in consumer electronics. With an aggressive demeanor to gain market share, Best Buy in 1995 began mimicking Circuit City’s expansion through the of opening new superstore chains. Being younger and with fast expansion, Best Buy now benefits from having more modern-looking stores located in more key areas that allow for both exposure and convenience. What has mainly contributed to Best Buy’s success,
Prepared By:
Students of Strategic Management
Solomon Faizi
Hanh Ly
Son Nguyen
Jackie Vo
Prepared For:
Robert Wood
Professor of Strategic Management
San Jose State University
Bus 189 Sec 02
9 December 2002
Executive Summary
Circuit City History The year is 1966 and Wards, a television and appliance company established in 1949, is hot. As the one and only giant of television, the company enjoys a growth rate of 2200% since 1958 and its sales continue to skyrocket. The company continues to expand itself by offering innovative products like audio equipment and diversifies by entering markets including automotive supplies, gasoline, clothing, and even children’s toys. In 1968 the company goes public while continuing to expand and focus on innovation and differentiation, grasping each opportunity gain a hold of untapped markets. In 1977 the company renames itself Circuit City and continues to prosper as the market leader in consumer electronics. Its almost 50-year reign over other companies unfortunately lasts only until the late 1990’s due to a highly saturated market with slow growth. The consumer electronics retailing industry, in the late 1990’s, becomes essentially a “zero-sum game: each percentage sales gain for one store is a loss for another” (Sack, page 7).
Best Buy’s Winning Strategies
With changing times, emerging competitors, and shifts in customer needs, Circuit City slips into second place as Best Buy moves into first, becoming today’s market leader in consumer electronics. With an aggressive demeanor to gain market share, Best Buy in 1995 began mimicking Circuit City’s expansion through the of opening new superstore chains. Being younger and with fast expansion, Best Buy now benefits from having more modern-looking stores located in more key areas that allow for both exposure and convenience. What has mainly contributed to Best Buy’s success,
Cited: Hill, Charles and Jones, Gareth. “Strategic Management: An Integrated Approach” New York, New York. Houghton Mifflin Company. 2001 Homewood, Chris