Circuit City Strategy

Farnaz Jafari

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Circuit City established outstanding competencies in logistics and IT infrastructure that in return allowed it to monitor trends and keep up with inventory in its geographically isolated stores. Moreover, Circuit City invested on well-trained, motivated and experienced sales Personnel to deliver high level of customer service and keep up with customer satisfaction. Circuit City also implemented a big box strategy to where they supplied a wide range of product selections to their stores with a bigger footprint to reach high sales volume and they continued to update their competencies to outpace their competitors. Circuit City also had an impressive presence in the stock market by outperforming their competitor by a large factor. Logistics, IT infrastructure and the well trained personnel were so hard to imitate and that gave them a competitive advantage in the market.

 Circuit City started losing competitive advantage by making several wrong moves. They started firing their highest paid, well trained and experienced sales personnel which in consequence resulted in lower costs but also weakened the core strength of the company. They also ignored the need to invest into their core competencies to stay ahead of the game and instead they stared to diverging into other areas that took away their focus from their core business strategy.

Circuit City fundamentally failed to define its mission and vision as a company. Several things contribute to its dooming end. Management should have clearly outlined its purpose and vision for the firm. Instead of creating and sticking with a brand, they had their hand in electronics, cars, and video rentals creating a variety of reputations. This lack of clearly identifying the firms as a world-class retailer of electronics kept, the firm form maintaining its initial core expertise.