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Circuit City

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Journal of Business Cases and Applications

The rise and fall of Circuit City
Amy Hart The University of Tampa Erika Matulich, Ph.D. The University of Tampa Kimberly Rubinsak The University of Tampa Kasey Sheffer The University of Tampa Nikol Vann The University of Tampa Myriam Vidalon Nielson Abstract Circuit City paved its way in the consumer electronics retail market by committing to its Five S’s operating philosophy – selection, savings, service, satisfaction, and speed. However, the company fell victim to several poor business decisions in the early 2000’s that eventually led to the filing of Chapter 11 bankruptcy in 2008 and its closing in 2009. This case highlights the importance of identifying appropriate product differentiation strategies, building a distinctive competence, monitoring the competitive landscape and making sound business decisions. It will landscape, also aid the student’s understanding of the role and impact of management and explain the importance of employee engagement, satisfaction, and retention. Keywords: Circuit City, Five S’s, customer service, product differentiation, competitive ity, landscape, employee retention, Alan McCollough, Philip Schoonover, layoff, Chapter 11 bankruptcy

Rise and fall, Page 1

Journal of Business Cases and Applications INTRODUCTION history This case covers the time period in Circuit City’s history between the decision of CEO Alan McCollough to halt the sale of appliances in 2000 and the decision of CEO Philip Schoonover to lay off 3,400 employees in 2007 The case also highlights the importance of 2007. sound strategic business decisions, target marketing, and customer input. Moreover, the case points to the need for a retailer in such a competitive marketplace, with both brick brick-and-mortar and online competitors, to find its c competitive advantage and adhere to it. Differentiation and customer...

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