Just one day after the "Hudson River Miracle", there apparently was no miracle in Richmond, Virginia at the headquarters of Circuit City. The popular electronics retailer is officially closing its doors forever. All 623 Circuit City stores across the country are immediately shutting down their operations, and more than 30,000 employees no longer have a job.
Who was to blame for all of this? Apparently, their long-time rival Best Buy. For years, Circuit City had seen sales decrease as it lost ground to Best Buy.
Although Circuit City is the older of the two companies, by 1996 Best Buy had surpassed them in sales due to their aggressive expansion. Circuit City fought back by remodeling and redesigning the layout of older stores and opening new stores, but this obviously did not work.
Best Buy's victory is credited for their strategic expansion techniques, their popular "Reward Zone" rewards program, their competitive pricing, and their e-commerce web site which was one of the first to allow customers to order products online and pick them up from a local store.
Best Buy was also incredibly skillful in gaining market share in the sales of laptops, LCD and plasma televisions, digital cameras and camcorders, and of course - iPods and iPhones.
Moral of the story: Don't allow your competitors to replace you.
Alas another one bites the dust. Same song!
ReplyDeleteThis weekend Circuit City will have a very hot sale with most items up to 50% off. Sale ends Saturday the 17th.
While too much media attention is being focused on the 77,000 US businesses with over 500 million in revenues, I wish someone would pay some attention to who will really revive this economy --small business owners. Since 1Q 2008, credit has been tight for even the larger small businesses. All any can focus on is wall street is doing to main street. What about the businesses along main street???
There are 26 million small businesses in the US and they make up 51% of the us work force.
Let's band together to help the media and congress see, that if they burned some midnight oil to encourage lending institutions to extending more credit to small businesses, we might be able to turn this rusted ship of an economy around.
follow me at smallbizlady on twitter!