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RadioShack Analysis_Group Project _Retail Management

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Team: Fung, A. Comack, J. Saldanha, R

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RadioShack Analysis_Group Project _Retail Management

  1. 1. Presented by: Jason Comack Anthony Fung Renny Saldanha Date: December 12, 2013 Professor: Alan Barnett
  2. 2. Agenda  Mission Statement  Company History  Management Team  Where They Are?  Retail Mix  KPI and Financials  Competition  Where Are They Going?  Strategy  Repositioning  Rebranding
  3. 3. Mission Statement “RadioShack has a customer-oriented approach, which combines a carefully selected product assortment with a convenient, small-store format and highly personalized service. Over the years, this approach has enabled RadioShack to stay at the forefront of the rapidly evolving consumer electronics market and to remain relevant to consumers in every era.”
  4. 4. History  1919: Two friends start the Hinckley-Tandy Leather Company in Fort Worth, Texas.  1921: Two brothers open the first "Radio Shack" in Boston, a small retail and mail-order business supplying ship radio equipment and "ham" radios.  1935: A predecessor of present-day RadioShack Corp. lists its shares for trading on the NYSE.  1959: Charles Tandy is elected as chairman of the board.  1963: Tandy acquires Boston-based "Radio Shack.“  1983: RadioShack introduces the "Model 100" laptop, the first of its kind in the computer industry.  2000: Tandy Corp. changes its name to RadioShack Corp.  2005: RadioShack becomes an Authorized Apple Reseller and later introduces Skype-certified hardware and software in stores for free voice- and video-calling over the Web.
  5. 5. Recent CEOs Joseph Magnacca: 2013.Feb CEO of RadioShack 2011-2012 EVP of Walgreen 2008-2011 CMO of Duane Reade 2001-2008 Shopper Drug Mart James Gooch: 2011-2013 CEO of RadioShack 2006-2011 CFO of RadioShack 1996-2006 Controller KMART/Sears Julian Day: 2006-2011 CEO/Chair of RadioShack 2004-2006 Director of Sears Holding 2003-2004 CEO of Kmart 2002-2003 COO Kmart 1999-2002 CFO COO Sears
  6. 6. Change in Executive Team Year of Service CEO COO Marketing Merchandise CFO Controller CIO Supply Chain HR 2004 Roberts Edmondson Newman Johnson Follit 2005 Edmondson Babroski Barnes Johnson Follit 2005 Babroski Babroski Hamilton Lowzinski Gooch Johnson Kinzey Ripperton 2006 Day Formichelli Hamilton Lowzinski Gooch Johnson Kinzey Ripperton 2007 Day Formichelli Killinski Whitsett Gooch Moad Kinzey Ripperton 2008 Day Bevin Applbaum Whitsett Gooch Moad Kinzey Ripperton 2009 Day Bevin Applbaum Applbaum Gooch Moad Stufflebeme Ripperton 2010 Day Bevin Applbaum Young Gooch Moad Stufflebeme Ripperton Doran 2011 Gooch Dinkens Applbaum Young Lively Moad Stufflebeme Ripperton Doran 2012 Gooch Dinkens Applbaum Young Lively Moad Stufflebeme Ripperton Doran 2013 Magnacca Risch Long Long Lively Moad Stufflebeme Risch Jefferies
  7. 7. Where They Are: Perceptual Map Pricing Service
  8. 8. Product Segmentation Sales and share of revenue increase in both Mobility and Signature platform Rapid decline in Consumer electronics
  9. 9. Product Platforms  Mobility platform  Postpaid and prepaid wireless handsets tablet devices, and e-readers.  Signature platform  Home entertainment, wireless, computer, music accessories, power products, headphones; technical products and services.  Consumer electronics  Laptop computers, personal computing products, digital music players, residential telephones, GPS devices, cameras, and digital televisions,
  10. 10. Focus on Mobility  Comparability of carriers service plans and handsets  Knowledgeable and friendly staff  Free contact swap  Free lifetime product support  Trade & Save program  Mobile Low Price Guarantee  Competitive prices on devices  Accessories power, protect and personalize handsets
  11. 11. Retail Locations: Stores, Kiosks, Dealer Outlet Avg Store Size U.S. RadioShack company-operated stores (1) 2,464 sqft Target Mobile centers (2) 16 sqft
  12. 12. Competitors  Consumer electronics retail stores  Big-box retailers  Large specialty retailers  Discount and warehouse retailers  Internet retailers  Wireless service providers’ retailers
  13. 13. The Need To Change  Declining Net Income  Changing Landscape  Financial Trouble  Decline in Demand  Declining Comp Store Sales
  14. 14. Key Performance Indicators - Comparison ($000) RadioShack Corporation Fiscal Year Q2 2013 Q1 2013 2012 2011 2010 2009 2008 Sales 844,500 849,000 4,257,800 4,378,000 4,265,800 4,073,600 4,034,800 GM % 37.16% 39.73% 36.68% 41.36% 44.86% 45.98% 42.95% Comp Str % 1.30% -5.70% -3.50% -2.20% 4.10% 0.80% 0.90% Op Inc % -2.74% -0.08% 0.77% 5.33% 10.08% 10.75% 7.35% Best Buy Fiscal Year Q2 2013 Q1 2013 2012-11mo 2011-11mo 2010 2009 2008 Sales 9,300,000 9,380,000 45,085,000 46,064,000 49,747,000 49,243,000 44,737,000 GM % 26.55% 23.13% 23.62% 24.64% 25.21% 25.50% 24.40% Comp Str % -0.60% -1.30% -2.90% -1.60% -1.80% 0.60% -1.30% Op Inc % 4.52% 1.86% 2.54% 4.37% 5.05% 6.00% 4.70%
  15. 15. Strategies 1. Reposition the Brand 2. Revamp product assortment 3. Reinvigorate the Store Experience 4. Operational Efficiency 5. Financial Flexibility
  16. 16. Strategy: Target Market Demographics: Age: 16- 35, Male & Female  Income: Medium Education: High School and above Residence: Urban often Renters "The store aims to attract tech- hungry shoppers who will find a new level of products, service and excitement in a store that makes the buying experience fun." Buying Behaviour: Frequency- 8-10 visits a month Buying Reasons- Late adopters , Need to have gadgets that everyone is talking about Psychographics: Tech Savvy Risk-takers Avid socializers
  17. 17. Strategy: Store Design  Concept Stores  Will feature new merchandise, cleaner display and new slogan “Let’s Play”  upgraded shopping experience  new look  interactive areas  designed to help shoppers improve their technology profile.  Interactive displays that enable shoppers to find and compare products  Technology that makes shopping interesting and playful  Newly configured displays highlighting in-demand brands  A Do-It-Yourself area where consumers can plan projects
  18. 18. Store Design
  19. 19. Rebranding Logo Change  2001-2009  2009-2011  2011-2013  2013 New Website
  20. 20. Conclusion  Will It Work?  Does New Target Customer Make Sense?  Can they change the brand perception?  Pressure from investors  Running out of time and money  Moving into saturated market  Concept Stores  Apple, Microsoft, Sony
  21. 21. References  http://ir.radioshackcorporation.com/phoenix.zhtml?c=84525&p=irol- reportsannual  http://www.engadget.com/2013/01/14/radioshacks-target-mobile-april-8th/  http://www.bloomberg.com/news/2013-10-22/radioshack-posts-loss-agrees-to- 835-million-financing.html  http://www.fool.com/investing/general/2013/04/27/radioshacks-turnaround- plan-has-a-glimmer-of-hope.aspx  http://www.trefis.com/stock/rsh/articles/212715/oct-22radioshacks-turnaround- initiative-fails-to-impress-so-far/2013-10-23  http://ir.radioshackcorporation.com/phoenix.zhtml?c=84525&p=irol- reportsannual  http://www.engadget.com/2013/01/14/radioshacks-target-mobile-april-8th/  http://www.bloomberg.com/news/2013-10-22/radioshack-posts-loss-agrees-to- 835-million-financing.html  http://www.fool.com/investing/general/2013/04/27/radioshacks-turnaround- plan-has-a-glimmer-of-hope.aspx  http://www.trefis.com/stock/rsh/articles/212715/oct-22radioshacks-turnaround- initiative-fails-to-impress-so-far/2013-10-23

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