#Can anyone help me to analysis both question below based on this case study !!
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Question
#Can anyone help me to analysis both question below based on this case study !!Based on your full understanding of the case, what are the competitive advantages of Circuit City that made it to become one of the best companies in America? Please justify with Value Chain supporting with Resource Based View and VRIO and relevant facts from the case. Based on your full understanding of the case, what are the competitive advantages of Circuit City that made it to become one of the best companies in America? Please justify with Value Chain supporting with Resource Based View and VRIO and relevant facts from the case.
2. Strategic Thinking Question
The fall of Circuit City was due to dynamic change of factors in its external environment. What went wrong with its strategic position in the competitive environment that eventually led to the disappearance of a great company? Please justify your answer with business level strategy concept with relevant facts from the case. The fall of Circuit City was due to dynamic change of factors in its external environment. What went wrong with its strategic position in the competitive environment that eventually led to the disappearance of a great company? Please justify your answer with business level strategy concept with relevant facts from the case.
From Good to Great to Gone: The Rise and Fall of Circuit City IN THE 1990s, Circuit City was the largest and most successful consumer-electronies retailer in the United States. Indeed, Circuit City was so successful that it was included as 1 of only 11 companies featured in Jim Collins's bestseller Good to Great. To qualify for this august group of high performers, a company had to attain "extraordinary results, averaging cumula- tive stock returns 6.9 times the general market in the 15 years following their transition points. Indeed. Circuit City was the best performing company c Collins' good-to-great list, outperforming the stock market 18.5 times during 1982-1997 CIRCUIT CTY CLOSING SALE OMI UTERS MUSIC How did Circuit City become so successful? The company was able to build and refine a set of core competencies that enabled it to create a higher eco nomic value than its competitors. In Circuit City created world-class competencies in efficient and effective logistics expertise: It deployed sophisti- times. I thet cated point-of-sale and inventory tracking technology. for bankrupt supported by IT investments that enabled the firm to to great to gone" connect the flow of information among geographi cally dispersed stores. This expertise allowed detailed because the firm neglected to tracking of customer preferences and thus enabled them. As a consequence, it was outflanked by Best Circuit City to respond quickly to changing trends. Buy and online retailers such as Amazon. More- The company also relied on highly motivated, well trained sales personnel to provide superior service and distracted by pursuing noncore activities such as the thus build and maintain customer loyalty. These core creation of CarMax, a retail chain for used cars; a competencies enabled Circuit City to implement a foray into providing an alternative to video rentals 4S business model -service, selection, savings, and hrough its proprietary DivX DVD player; and an satisfaction-that it applied to big-ticket consumer attempted merger with Block buster, which filed f electronics with an unmatched degree of consistency throughout the United States. Peter Hvadaïmelmage Works ular, Circuit that investment) to January 1, 2000, you would have been better off with Circuit City-by la factor ofl six fall of 2008, however, Circuit City filed How did Circuit City go from good Circuit City's core competencies lost value upgrade and protect over, Circuit City's top-management team was also bankruptcy in 2010 Perhaps the biggest blunder that Circuit City's top- -management team committed was to lay off 3,000 of s personnel to make the Perhaps even more important during the compa ny's high-performance run, many capable competitors the firm's highest-paid sale were unable to replicate Circuit City's core competen retailer more cies. Further underscoring Circuit City's superior per formance is the fact, as Collins described it, that if Pronk T Rathaernel prepweed you had to choose between S1 invested in Circuit Cit or SI invested in General Electric on the day that the o inefficient monagees All aa or depistion of efficien legendary Jack Welch took over GE in 1981 and held Rhacrmels Revned and edaed Angus 1, als renk I cost-competitive with Best Buy and, in this MiniCase foes public sources This Miai Case is developed for the parpose of class dascussion It is not inscnded to be used for any kind of endonetnent, source all emoes and es 460
Explanation / Answer
1. Circuit city derived its unique competitive advantage from its supply chain capability that enabled it to serve its customers better than most of the companies of that time, by efficient point of sale and inventory tracking, agile IT enabled supply and logistics function and was capable to manage geographically dispersed stores with ease to create value for its customers. Another source of competitive adavntage was its efficient and loyal salespersons. The IT and supply chain capability combined by advanced sales process, enabled the company to know, track and act on the customer preferences and create and implement superior service model 4S ( service, selections, saving and satisfaction) that was managed efficiently with consistency. Out of these competencies, most were unreplicable and unique to the company, that offered it competitive position when analysed on VRIO framewok.
2. The company lost its strategic position and competitive advantage due to several strategic mistakes. These included distraction due to involvement in non core activities that were not the forte of company, like CarMax or the DVD which doomed in the end. Other trategic mistake was that the company did not upgrade its supply chain capabilities with changing times and competitors' moves. The biggest blunder was to fire the sales professionals to cut the cost. These sales professionals were efficient and loyal to the company and was a part of it during its heydays. These professionals were promptly picked up by the competitors like Bestbuy to build own sales capabilities and gain access to the vital inside information. Bestby built its innovative customer centricity model on the lines of City's and kept growing. Devastated by the loss of its key resources,the Circuit City could not keep up with the mounting losses and had to close the shop.
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