RadioShack - Can It Arrest the Decline?
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Case Code: BSTR463 Case Length: 17 Pages Period: 1921 - 2014 Pub Date: 2015 Teaching Note: Not Available |
Price: Rs.500 Organization: RadioShack Corporation Industry: Electronic Retail Industry Countries: US Themes: Brand Management, Business Strategy |
Abstract Case Intro 1 Case Intro 2 Excerpts
Introduction
In June 2014, leading US-based electronics retail chain, RadioShack Corporation (RadioShack), closed around 200 of its over 4,250 stores in the US. The decision to close down the stores was taken to bring down costs as part of the financially struggling retailer’s turnaround plans. The company stated that these 200 stores had shown the lowest performance and were expected to generate losses. Earlier in the year, the company had intended to down the shutters of around 1,100 stores. However, the move was opposed by its creditors. Instead the creditors had agreed to 200 stores being closed down annually over the next three years.
The typical RadioShack store was small and carried a limited range of electronic items, both from national and private brands. It was also a major shopping point for electronic accessories, power products, and electronic hobby items. In the early 2000s, with the fall in electronic hobbying and the shrinking demand for consumer electronics, the company shifted its focus to selling mobile devices.
However, by the mid-2000s, the company began experiencing a steep fall in revenue due to the rise in online retailing, tough competition from other brick-and-mortar retailers, and the low margins in mobile phone sales. In 2006, Julian Day (Day) came in as the new CEO of the company and initiated a slew of turnaround measures. The initiatives helped the company trim its costs, but its revenues failed to take off...
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