Essay About Fatal Flaw Of Radioshack And Profitable Company

Radioshack Marketing Assignment
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IntroductionIn today’s technology service industry, a business must be swift to adapt and revolutionize. With the markets rapid growth and innovation if an organization isn’t nimble and quick on their feet they run the risk of being swept away by the competition. This was the fatal flaw of RadioShack as they entered into the 21st century. In their attempt to remain a consumer electronic mogul they lost sight of their true vision of understanding, creating, delivering and managing their customer needs. “You’ve got questions, we’ve got answers”, is the epitome of ignorance, and lack of foresight and it was the final nail in the coffin that set RadioShack on a path towards failure.         In 2011 it became apparent that RadioShack was failing to remain profitable after 11 consecutive quarters of net loss. This ultimately led to them closing a substantial number of their stores and filing for chapter 11 bankruptcy protections. [1]  At the helm of this ship sat a board of executives whose boarder line negligent behaviour towards the growth of consumer’s needs led to their ultimate demise. Literature Review The Creation Boston, Massachusetts, 1921 RadioShack was founded, making it one of the oldest retail chains in the nation and more significantly one of the only electronic retailers. RadioShack got it’s name from the compartment that housed ham radios. Throughout the years of the depression RadioShack remained a small but profitable company relying on their sales of ham radios and targeting do it yourself enthusiast. By the 1950s their business had grown substantially operating through the mail and nine stores but this premature growth led to RadioShack’s first confrontation with bankruptcy. Yet in their darkest hour the company was purchase by Charles Tandy a retail savant who took over the reins on retail expansion and steadied the businesses core product and foundation. He believed that they need to cut back on merchandising and focus the businesses offering. Under this strategy RadioShack reduced their product line from 20,000 products to just over 2,500 best sellers and focused on in house inventory offerings and enhancing their own product line.[2] Tandy’s belief was that the company was not targeting the correct consumer. Their current segmentation was based on individuals who were making large substantial purchases. Tandy believed that they should be targeting customers who were looking to make small more frequent purchases, those who were looking for cheap products that they could modify and improve themselves.[3] ADD. The Business Venture In the early 80’s and 90’s RadioShack made the decision to venture into the risky business of personal computers. Up to that point the market had remained rather untapped by the retailer due to a lack of market research. Executives at first were weary of the decision and set rigorous caps on sales of these computers. The TRS-80 personal computer had a price tag of $600 making it the most expensive product in RadioShack’s stores till date. Executives within the company soon realized that RadioShack was not making nearly enough money on TRS-80 sales so they set a 10% limit on sales throughout the company to be contributed by personal computers. Lawrence Hrebiniak, professor of management at Wharton believes that RadioShack erred in believing in their own operating systems and not taking advantage of growing tech company’s such as IBM and Microsoft. [4] As time went on the personal computer market skyrocketed and RadioShack was left in the dust by the bigger tech companies that had strategic grown their business based on market analysis.