´In this case study, assume that Circuit City hired you as the new chief information officer (CIO) to help relaunch the company into a global e-commerce multinational company. 

´Documentation  

´10 to 12 pages 

´APA format 

´References

 The following information should be covered in the presentation 

  

´1. History of Circuit City

´2. What were the issues and challenges that caused the collapse of Circuit City in 2009?

´3. What are the issues and challenges with Circuit City 2018 latest e-commerce initiative?

´4. Discuss the major competitors in global e-commerce.

´5. How would IT deliver value to the business?

  

´6. Proposed the IT infrastructure required to support global e-commerce

´7. Proposed the IT budget for the e-commerce initiative

´8. Discuss the IT based risks associated with global e-commerce

´9. Discuss how IT can leverage innovative technologies such as social media, big data and business intelligence to provide value to the business

´10. Discuss the future or emerging technologies that would be leveraged to give Circuit City a competitive advantage.

Running head: CIRCUIT CITY 1

Circuit City

Organ Leader & Decision Making

Whithende, Tabu

June 23, 2019

Group D

Ramesh, Raghavendran

Musuku Reddy, Vinay

Perala, Mounika

Paneru, Badri

Budde, Kiran Kumar

CIRCUIT CITY 2

Abstract

This paper explains the new business and IT strategies for the new circuit city e-commerce

platform. This new strategy involves, new infrastructure methods, architecture, new budgeting

methodologies, new IT risks that’s need to be considered. Further, this paper explains evolution

of the circuit city in 19th century and the decline followed by issues and challenges faced by the

company after re-launching in 2018. This papers also explain the new ideas, plans and polices

that will help the organization to succeed and grow in the market. Those strategy might be with

developing the IT infrastructure and organization structure with a view to increase the sales of

the product.

CIRCUIT CITY 3

Circuit city makes a comeback

History of Circuit City

Circuit City started its operations in 1949 and operated under the name Wards Company. The

store opened at a time when the concept of electronics superstore was starting to gain recognition

in the U.S. In ten years of operation, the company had already become the fourth store chain

operating in the U.S with over 1million dollars annual total sales. In the year 1965, Wards

Company began expanding by acquiring various home appliance and television stores in the U.S.

In 1970, the company came under new management in which the focus was directed towards

business consolidation. Therefore, it closed all the stores and branches that weren’t profitable and

directed more revenues in an electronic superstore which cost about 2 million dollars (Romero,

2014).

The store changed the focus of the company from being a provider of home appliances to

focusing on the electronics market. The company therein offered a range of products including

video, audio equipment, and other major appliances. The company was able to offer its products

at lower prices due to the high volume of sales compared to its competitors (Rock,

2018).

Also,

as a way of increasing and retaining their consumer base, the company offered service

incentives, for instance, instore repairs and home delivery.

Due to its success, the company was able to streamline its operations and ended up turning

most of its small stores into big electronics superstores. Therefore, the company opened up six

new stores which saw its annual sales rise to 120 million dollars (Romero, 2014). In 1984, the

company started operating under the name Circuit City Stores and was listed in the stock

exchange. The company continued to grow and became the leading retailer in electronics. In

CIRCUIT CITY 4

1987; the company yearly sales reached 1 billion dollars due to the increasing demand for VCRs

(Romero, 2014). In addition, the company had a good merchandising formula, customer service

focus and strong management which made it propel to such great heights. However, with all this

success, the company came tumbling down due to various reasons

Issues and challenges that caused the collapse of Circuit City in 2009

The Circuit City company was a giant that was set on gaining much business and revenue in the

coming future, but this didn’t happen. Over the years, the company has established a strong

consumer base which helped it to build 1520 stores in the United States. However, things started

going haywire in the 90s (Romero, 2014). The competition started becoming stiff and discount

clubs started emerging which changed the future of this company. The following are the reason

that caused the collapse of Circuit City

 The company dumped sales of its popular appliances. This was in a bid to venture into

new consumer brands that were in demand and emerging. Products such as VCRs were

let go to pave way for better technology which wasn’t good for business

 The company spun off CarMax and in so doing fired the talented management that came

with it. This wasn’t a strategic move considering that Circuit City was mostly successful

due to its effective leadership and management style (Romero, 2014)

 The store became too large as well as too impersonal. The vast nature made it impossible

to control and run which hindered smooth operations

 At the onset of Best Buy, Circuit City stopped being innovative but rather became

reactive. This was a move the wrong direction. Consumers prefer innovative and creative

CIRCUIT CITY 5

products better than the last. By being reactive, the company lost a sizeable portion of

their consumers who wanted new innovative electronics

 Circuit City went ahead to expand and open as many stores as possible all in the name of

pleasing the Wall Street analysts. The result was too many stores which were in

neighborhoods that had no much business to increase their profitability. Therefore, too

many stores were opened that couldn’t bring in sizeable profit margins that could retain

the operation of the entire company

 To save money, the company stopped giving and paying commissions to their sales force

and in the end fired over 34000 of their experienced labor forces (Romero, 2014). With

such a move, the company had no chance of survival. The employees are a major asset of

the company, their experience, and expertise matters. By letting all that go, the company

was doomed to fail

Issues and challenges with Circuit City 2018 latest e-commerce initiative

Circuit City is on the verge of starting its operation yet again. The company announced a while

ago that it would open its digital doors to the public. However, entering back to the market

especially in this digital era will prove to be challenging for some time before the operations pick

up once again (Romero, 2018). This is due to various reasons. One, there is a lot of thin profit

margins on electronic products and this has been brought about by the high competition.

Electronic products are being offered relatively cheap by many online stores which could prove

to be a disadvantage considering that the company was highly reliant on high-profit margins

back in the day. Best Buy has already made its impression to consumers all over due to their

CIRCUIT CITY 6

innovative capability and offering their services to suit the consumer needs (Gupta, & Bansal,

2016)

. If at all Circuit City makes an online come back, it will have to experience much

competition not only from best buy but other online stores such as Amazon.

Also, the company’s e-commerce initiative isn’t geared towards making a profit. The

company is operating on a comeback in the same field of business which unfortunately has so

many companies operating under it. Circuit City is just giving us another place to, but TVs and

we already have enough of those. Circuit City should realize their brand has been long forgotten

and by operating in the same line even on the online e-commerce, it’s a challenge. If at all they

aren’t geared towards complete value proposition, success is limited. All that the company has to

do is to ditch yesterday’s business and find a merger with another firm that has a better

competitive advantage and start from there. All in all, the company has a known brand advantage

and the e-commerce will have to be linked with physical stores where customers can interact

with the company

Major competitors in global e-commerce

One of the main disadvantages that the company is set to face is the competition which is

growing by the day unlike in the past when the company was operational. Since its bankruptcy,

there are other companies that have established their operations globally and made their presence

known. Other than best buy, other competitors that the company will face include Amazon.

Amazon has continued to operate, and its success has been due to their massive size that allows it

to sell products cheap and secondly due to the consumer focus strategy (Romero, 2014). These

two were strategies that Circuit City used in their operational days.

CIRCUIT CITY 7

The company has many online stores and physical stores with delivery services. In addition,

there is a wide product selection which makes it’s a great competitor to build. Secondly, Apple

Company is also a great competitor that commands a sizeable portion of the electronics market.

The company operates under consumer loyalty and quality products meaning that circuit city will

have to up their game if they are to shift this consumer loyalty. This will be a tough nut to crack.

Third, there is Walmart which offers great discounts on their electronics and even have massive

discounts on black Friday (Romero, 2014). Walmart too gives its consumers access to electronics

at great discounts because just like Amazon, their massive nature allows them to offer electronics

cheaper

All these e-commerce competitors have one thing in common; they have an already

established consumer base, physical stores and they are increasingly looking for new ways of

increasing their consumer base. In addition, they have been operational for quiet and are

therefore ware of the online business in the digital era. However, this cannot be said of Circuit

City. The company will have to go extra miles to keep up with these competitors and emerge on

top as the number one electronic store like in the past

IT deliver value to the business

In the digital era, IT has become the building blocks of many companies which have seen such

companies increase their competitive advantage, profitability, consumer base among many

others. Consequently, adopting IT will help Circuit City a great deal in the following ways,

CIRCUIT CITY 8

Improving the company’s responsiveness to new changes

There is a massive amount of data that can be used and manipulated by the company to

ensure that it anticipates for new and future changes. The company is operating in an

environment that is subject to many changes. Information technology, therefore, aids in the

processing of data which has been generated from many channels, for instance, web analysts,

customer feedback, sales among others which when handled in the right manner can be the

backbone of important strategies and decision making. Secondly, it facilitates the

implementation of decisions which have been undertaken through cost-effective as well as

innovative ways

Improving service delivery to consumers

The company will have to be customer centered if it’s to be operational. The services

offered too must be customer focused. This means that the staff to has to be educated on the

ways of improving the efficiency and delivery of service. Information technology assists by

facilitating the operation of a business in a bid to increase the consumer base.in return, the

customer gets highly efficient services that guarantee a comeback.

Changing the basis of competition

The company is already facing much competition; however, with the use of IT, the

company stands at a point of improving its market share visibility and even the competitive

edge. This is because the IT incorporation allows the introduction of operational efficiencies

which assist to reduce the operational costs. In addition, IT allows the implementation of new

measures which will help to improve the customer value thereby improve their experience

CIRCUIT CITY 9

with the organization. Lastly IT integration helps in automating, optimizing and streamlining

various internal processes which in turn will assist the company to reduce complexities,

human errors or delays in the system.

IT infrastructure required to support global e-commerce

Every business especially one that wants to embark on a global scale operation has to have the

right infrastructure for an effective business operation. This is inclusive of the processes,

equipment, and facilities which are aligned with the business strategies. For this company,

choosing the right infrastructure will ensure that the business runs smoothly and effectively. For

instance, the company wishes to be consumer-oriented meaning that they have to lower their

prices; therefore, the IT infrastructure chosen to have to support these goals. Overall the

following IT infrastructure requirements will have to be put into considerations;

 Marketing- marketing is the most important IT infrastructure. Therefore, the website of

the company must be visible and appealing to the consumers. The idea here is to keep the

customers focused on the website as well as compelling them to buy. Herein the activities

underlying in this infrastructure will include merchandising, search marketing, social

media, web design, etc. all of which must be undertaken with a lot of care

 Customer service- how you handle the customers will determine if they will come back.

The company must use this infrastructure in the best way possible. Basic activities such

as offering feedback, after sale services, for sale services, etc. can go a long way in

reflecting the image of the company (Romero, 2014). Seeing that Circuit City operates

globally, the customer management system will come in handy to assist in handling and

CIRCUIT CITY 10

dealing with customers. Lastly, live chat is also convenient to create a form of interaction

with the customers

 Information technology infrastructure- the company must choose the right e-commerce

platform from which to establish its operations. The best way for the company is using a

hosted system by use of skill expertise (Romero, 2014). This will come in handy when

making future changes compared to outsourcing the information technology

IT budget for the e-commerce initiative

Making a budget is imperative as it defines whether the business has what it takes to stay

operational and realize the set goals and achievements of the company. For this reason, it’s

important to know what are the important aspects that the budget must have for e-commerce.

One of these aspects is marketing. As already discussed marketing is important to business

(Lisanti, 2011). Customers need to be constantly reminded about the business of the company

until they develop a form of loyalty. For a startup business, advertisement is very important, but

it isn’t cheap either. The more advertisement and promotions done, the higher the chance that a

consumer will hear about the product. Therefore, a sizeable portion of the budget shul deb

directed towards advertising.

Secondly, it’s important to budget for the operational costs. In this case, the software,

networking, and infrastructure equipment must be budgeted for. It should be noted that the

infrastructure chosen e.g. people processes etc. determine how effectively the expirations of the

company will be undertaken. Therefore, enough resources must be directed towards acquiring

the right infrastructure.

CIRCUIT CITY 11

Projecting the revenues should also be included in the budget. Doing so gives a kind of

parameter and a measure of success (Romero, 2014). Most of the businesses have ended up

failing due to the failure of not calculating their revenue or that they have overestimated their

revenues. Forecast revenue ensures that the company has a business goal understood by the

company and which can be realized. Also, the budget must be adjusted for seasonality. This

includes times when the business is expected to have high sales and times of low sales. This

gives a computation plan for the company to be prepared for such times

IT-based risks associated with global e-commerce

IT e-commerce business has been faced by various challenges which have seen many online

businesses reduce their profitability. The most noteworthy risk is online security. The threats of

cybersecurity are on the rise and hackers are increasingly becoming skilled in stealing

confidential private data (Escalante, 2018). Of late many businesses have faced cyber intrusions

which have cost them billions in revenue. Increasing vulnerabilities, too much data to handle,

careless employees, advancing technology, etc. are the major cause for this. A company,

therefore, has to put effective measures and strategies of dealing with risk which isn’t cheap

either. Secondly, there is the risk of poor customer service. Dealing with consumers isn’t easy

since their tastes and preferences differ. Therefore, what one consumer may want may be

different for another. This causes confusion in the delivery of customer services (Escalante,

2018).

CIRCUIT CITY 12

The most common cases involve customer disputes whereby a customer may not have

received their order, may have been charged twice or where their order wasn’t delivered.in such

cases even though the errors may have been reasonable the consumer doesn’t see this.

System reliability is yet another risk associated with IT global e-commerce. From time to

time, the service providers crash making them unreliable. With this in mind, the business can’t

afford not to stay operational. Any second that a website isn’t responding means it’s losing both

consumers and money. The major causes of these crashes may be due to bugs within the system

or errors which have embedded themselves in the system.

There is also the risk of intellectual property in which the product descriptions, logos,

website images or the products offered by the company end up violating another Company’s

intellectual property or copied by another company (Escalante, 2018). This may initiate legal

battles which are costly thus lowering the profitability of the company. Other risks include

taxation, warehousing, and logistics, warranty and return of goods.

IT leverages innovative technologies such as social media, big data, and business

intelligence to provide value to the business

IT has a big role to play in adding value to a business using innovative technologies. For

instance, business intelligence are the decision support tools which allow for the real-time

interaction process.IT comes in handy by bridging the gap between the information silos which

allows access to information resources such as ERP transaction processing and data

warehousing. Big data and business intelligence can be brought together with IT to understand

the behaviors and patterns that exist in the market (Gupta, & Bansal, 2016,). Investments done

under such conditions are expensive and therefore must be leveraged. In return, the company

CIRCUIT CITY 13

gets a delivery of solutions which improve the overall efficiency, increase profitability and

reduce costs of the business

When it comes to social media platforms, there is no other sure way of guaranteeing the sales

of a company and its value, then taking it on social media platforms (Funk, 2012). These social

platforms have made it possible for the information to flow interactively with consumers. Most

of the businesses can comfortably attribute their success to media platforms such as Facebook

(Funk, 2012). Here, the consumers get platforms for interacting with existing consumers,

acquiring new ones, promoting their products, making deals, etc. A company that doesn’t leave

room for the social media platform in this era will be sure to fail.

IT innovative technologies can assist a company like Circuit City to have the right

information and know how to compete on an international scale (Rock, 2018). There is a vast

consumer base that is waiting to be tapped and ready to hear and see what products you are

offering. Therefore, the company must be prepared to exploit these technologies to increase the

value of their business (Funk, 2012).

The future or emerging technologies that would be leveraged to give Circuit City a

competitive advantage.

 Platform revolution

There is an expected shift from technical infrastructure to a platform which enables

ecosystems. This will act as a new bridge between technology and humans in a business

setting. Such a platform will give the company a more interactive platform which is business

focused which create value (Lisanti, 2011). These platforms have more security, IoT

CIRCUIT CITY 14

interactive framework, quantum computing, etc. With such a platform, the company has a

higher chance of computing compared to its competitors

 Smart machine age

In the coming decade, the smart machine age will arise whereby efficiency will be

heightened. This process is already starting even though at a small pace (Lisanti, 2011).

However, it would be beneficial that the company adopts it and gradually implements it over

the years. This smart machine age is inclusive of deep neural networking in which data will

be harnessed more effectively and interpreted to bring about a solution to complex business

problems. The following technologies are set to bring about the smart machine age, smart

data discovery, commercial UAVs, virtual personal assistants, autonomous vehicles ontology

management, content brokering among others. These will guarantee that the company has the

latest technology to compute data into meaningful information

 Transparently immersive experiences

There is the emerging technology whereby the relationship and transparency between

businesses people and things will be established. In addition, as technology advances, this

relationship will continue to be intertwined. This human-centric nature will allow business

set to understand the needs wants and preferences of their consumers (Gupta, & Bansal,

2016)

CIRCUIT CITY 15

Conclusion

CIRCUIT CITY 16

References

Escalante, R. M. (2018). E-Commerce Challenges for Global Businesses. Global Information

Technologies, 2694-2710. doi:10.4018/978-1-59904-939-7.ch195

Funk, T. (2012). The Platforms. Advanced Social Media Marketing, 33-63. doi:10.1007/978-1-

4302-4408-0_3

Gupta, S., & Bansal, E. (2016). Consumer Orientation Towards Online Buying Via Social

Media Platforms. International Journal of Scientific Research And Education.

doi:10.18535/ijsre/v4i01.15

Lisanti, Y. (2011). Managing and Delivering Information Technology Value. ComTech:

Computer, Mathematics and Engineering Applications, 2(1), 72.

doi:10.21512/comtech.v2i1.2715

Rock, D. (2018). Partners and Competitors. The British in Argentina, 247-302. doi:10.1007/978-

3-319-97855-0_7

Romero, I. (2014). Rise and Fall of the Circuit City. Economic History.

doi:10.5040/9781408167847.00000011

Samii, M. (2016). GLOBALIZATION AND IT. International Business and Information

Technology, 9. doi:10.4324/9780203358276_chapter_2

Wieandt, M. (2016). Information Technology Consulting in Global Information

Technology. Handbook of Research on Global Information Technology Management in

the Digital Economy, 356-380. doi:10.4018/978-1-59904-875-8.ch017