Question

ur anternativ rger with Blockbuster (which filed for bankruptcy Perhaps the biggest blunder that Circuit City's top-management team committed was to lay off 3,000 of the firm's highest-pai sales personnel. The layoff was done to become more cost-competitive with Best Buy and, in particular, the burgeoning onling retailers. The problem was that the highest-paid salespeople were also the most experienced and loyal ones; and this allowed Best Buy - to recruit these valuable resources. In particular, Best Buy went on to develop its innovative main competitor "customer- centricity" model, based on a set of skills that allowed its store employees to identify and more effectively serve specific customer segments. Questions [note that the percentage of viord count over limit will result in the same percentage of point penaity 1. Why did Circuit City lose its competitive advantage? (10 points, 30 words max) 2. What was Circuit City's strategic position during the time of its competitive disadvantage? (5 points, 30 words max) 3. From a strategist's standpoint, what do you think Circuit City could have done differently? (10 points, 50 words max)

Answer 1

1. CIRCUIT CITY LOOSES ITS COMPETITIVE ADVANTAGE BECAUSE ITS BIGGEST ADVANTAGE WAS ITS HIGH EXPERIENCED AND LOYAL SALES PERSONNEL WHICH IT LAID OFF DUE TO COST CUTTING.

CIRCUIT CITY PLANNED THAT IT WILL GAIN ONLINE BARGAINING LIKE ITS COMPETITOR BEST BUY BUT INSTEAD BEST BUY HIRED THE LAID OFF EMPLOYEES OF CIRCUIT CITY WHICH TURNED OUT BE A ADVANTAGE FOR THEM.

2.CIRCUIT CITY WAS PLANNED TO TARGET THE ONLINE CUSTOMERS WHICH WILL NOT REQUIRE ITS SALES PERSONNEL THAT'S WHY THEY LAID THEM OFF.

3.INSTEAD OF COMPLETELY CLOSING THEIR RETAIL CUSTOMER SEGMENT THEY COULD HAVE DONE IT IN PHASES BY STARTING THE ONLINE BURGEONING INITIALLY WITHOUT CLOSING THE EXISTING METHOD OF SALES.AND ONCE THEY COULD GENERATE ONLINE CUSTOMERS THEY SHOULD LAY OFF THEIR SALES STAFF IN PHASED MANNER.