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RadioShack Analysis & Strategy

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RadioShack Analysis & Strategy

  1. 1. Alicia Leo Amber Waugaman Tatsiana Abuseif Mitchell Hammer
  2. 2. Overview • External Environment • Internal Environment • Business-Level Strategic Decision • Key Issues and Recommendations
  3. 3. RadioShack  Over 4,700 company-operated stores in U.S. & Mexico  Iconic brand / leader in industry  Operating at a loss the past 2 years
  4. 4. Porter’s Five Forces Rivalry - High Best Buy HHgregg GameStop Amazon Threat of New Entrants - Low Bargaining Pow er of Buyers - High Individual Shoppers Children Students Business Customers Bargaining Pow er of Suppliers - Medium Computer Manufactures Cellphone Manufactures Radio and TV Parts Vendors Computer Software Vendors Threat of Substitute Products - Low Books Magazines Theater Games(non-computer)
  5. 5. Intense Rivalry  Standardized and undifferentiated products  Online competition  Indirect competition  Low switching costs  High degree of concentration  High exit barriers  Low profit margins  High fixed costs
  6. 6. High Bargaining Power of Buyers  No product differentiation  High price elasticity of demand  Low volume purchases  A large number of sellers
  7. 7. PEST Impact  Slow industry growth at 1.8% rate ($78 billion in 2018)  Consumer sentiment index will increase by 3%  Increased commitment to the environment  Recycling  Government tax incentives  Online shopping  Continuous innovation
  8. 8. Internal Analysis • Extensive Product Line • Too Many Suppliers = Increase Costs • High International Risk Factor • Trade Regulations • Currency Exchange • Monitor Inventory
  9. 9. Internal Analysis • High Receivable Balances • Net Receivables: 2011= $279 Million 2012= $315 Million • High “Selling and General Administrative” Expense • Percent of Sales - Best Buy 20% RadioShack 36%
  10. 10. Internal Analysis • Resource: People/Employees • Capability: Ability to obtain customer insight and provide products they want
  11. 11. Business-Level Strategic Decision
  12. 12. Business-Level Strategic Decision
  13. 13. Business-Level Strategic Decision New Product Offerings
  14. 14. Business-Level Strategic Decision Was this a good decision?
  15. 15. Business-Level Strategic Decision Signature Platform 2.6% Mobility Platform Consumer Electronics Platform 4.5% 11.3% Why?
  16. 16. RadioShack’s Target Consumer
  17. 17. Key Problems Identified 1. Set goals and define a clear vision for the future • Poor Management • No focus • Lacks differentiation
  18. 18. Recommendations 1. Set goals and define a clear vision for the future • New management • Employee education programs • Clearly define brand as specialty electronics business
  19. 19. Key Problems Identified 2. Brick and mortar business model • Weak online presence • Slow to adapt/evolve to current market conditions • No store identity
  20. 20. 2. Brick and mortar business model • Grow web sales and online customer service tools • Close underperforming doors • Focus on “Specialty Electronic” concept doors Recommendations
  21. 21. Thank You!

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