Circuit city case study solution
From: Darrin P.
Category: program essay
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Why was Circuit City so successful as to be featured in Good to Great? What was its strategic position during its successful period? How did it contribute to competitive advantage? Circuit City developed world-class capabilities in logistics that enabled it to track trends and have inventory in its geographically dispersed stores. Additionally, Circuit City developed a core of motivated and knowledgeable sales staff.
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In Good to Great by Jim Collins, Circuit City was acknowledged as one of the companies that rose from good to great status by virtue of the appropriate culture and exceptional business strategy. The recognition bestowed on Circuit City was considerable and well deserved. The growth and success of Circuit City was contrasted sharply by the collapse of Silo Stores during the same period of two decades. What happened to a good to great company that it is now gone, and what can we learn from this closing chapter of the second largest electronics retail chain that is painfully relevant during the current economic challenges?
Circuit City Stores, Inc. Circuit City sells consumer electronic equipment, appliances, and extended service and warranty contracts which supplement those provided by equipment manufacturers. Equipment is sold at low margins, while warranties carry very high margins. A question has been raised about the proper method for recognizing revenues on the warranty portion of the combined sale. Deferring revenue will cut profit reported at the time of sales but may better match costs of warranty service.