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RadioShack

Student’s Name

Institutional Affiliation

RadioShack

After being part of the American retail landscape for over nine decades, the prominent RadioShack brand is currently struggling to survive. The consumer electronics market has changed rapidly with the emergence of so many online players such as Amazon (Brown, 2015). For this reason, the ancient brick-and-mortar retailers are trying to develop new business strategies. Companies such as RadioShack that have not been able to make the necessary changes or do not have the needed resources are facing extinction. In simple terms, the leadership of RadioShack has failed to establish a definite and comprehensive strategy to deal with the current market challenges it is facing.

Radio Shack appointed Joseph Magnacca who was serving as an Executive president at Walgreen, a chain specializing in a drug store. The manner in which the Electronics store settled on Magnacca as their preferred choice seems surprising based on the fact that he had no previous experience as far as the electronics industry is concerned and he has only been working in the drug store for more than ten years (Brown, 2015). Additionally, the company itself does not seem to possess ample firepower on its financial balance sheet to establish any aggressive moves to offer an extensive challenge to rivals that are bigger and better equipped. Hence, the company’s leadership model seems outdated, and there seems to be no growth to inspire confidence among potential investors.

Retailers such as Amazon and Walmart are taking their business operations further away from those consumer electronics stores that focus on pure-play by offering huge discounts to consumers (Peterson, 2015). Most customers in the modern era are still using physical stores to cross-examine and gain hands-on experience with the products. However, entirely a large number of them end up purchasing the products from already established online outlets such as Amazon at prices that are cheaper. Apparently, this strategy of showrooming is what has impacted RadioShack. While other companies such as BestBuy can afford the luxury of taking a hit as far as their gross margins are concerned in exchange for market share, RadioShack does not have the power, capability and the resources to emulate what its rivals are doing (Brown, 2015). In other words, it is its mobility business stipulated by poor leadership that is responsible for its declining gross margins. Since BestBuy is expanding quickly, it makes it challenging for RadioShack to maneuver and experiment its new business models.

The leadership of RadioShack has been redirecting much of its resources towards shifting to mobile devices such as smartphones. However, the primary challenge they face here is low margins. As such, the segment is very competitive because of a significant number of prominent players (Peterson, 2015). The competition does not only arise from ancient competitors such as BestBuy and Amazon, but it also results from Verizon outlets, Apple Stores and AT & T (Brown, 2015).As much as devices such as iPhone play an instrumental role to higher sales because of the significant ticket prices, it is acknowledged that they contribute to shallow margins as a result of intense competition.

In trying to improve a company that is experiencing financial challenges just like Radio Shack, it is essential for the management to assess and review all the aspects of the business operations. Moreover, the management should collaborate with the current staff at RadioShack rather than deciding to retrench and reduce the number of staff members as their first objective (Peterson, 2015). The management team should as well concentrate on their internal performance as far as their company objectives are concerned in an effort meant to increase the profitability and improve on the financial position of the company. The members of the board should also have supported and exercised their authority by seeing to it that Julian Day’s opinions, recommendations, and ideas were ethical and in line with the company policies when making primary decisions (Brown, 2015). With such an approach, Julian Day’s turn around strategy would not have failed.

In conclusion, RadioShack as an electronics company has some proprietary brands that are still existing, but it has discontinued some. An increase in competition, changes in management coupled with a lack of investors’ confidence in the company, the stock of the company reduced tremendously. The retail company is facing problems which have made the company to lack direction. The primary element to their improvement will be focusing on maintaining a direction and ensuring that the company has stability in management. However, by looking at their current strategy, the company may be focusing on their sheer numbers which imply that it is a focused strategy of trying to attract so many people in a large market niche. Therefore, as much as the company is differentiating itself from other competitors such as Amazon and BestBuy, it is essential for its management to ensure that the resources at its disposal are well managed and that there is a particular sense of direction.

References

Brown, N. (2015). RadioShack files for bankruptcy, sell up to 2,400 stores. Reuters. Retrieved from http://www.reuters.com/article/us-radioshack-bankruptcy/radioshack-files-for bankruptcy-sell-up-to-2400-stores-idUSKBN0L92XC20150205

Peterson, A. (2015). Bankrupt RadioShack wants to sell off user data. But the bigger risk is if a Facebook or Google goes bust. The Washington Post. Retrieved from https://www.washingtonpost.com/news/the-switch/wp/2015/03/26/bankrupt-radioshack-wants-to-sell-off-user-data-but-the-bigger-risk-is-if-a-facebook-or-google-goes-bust/?utm_term=.8ff1abe42495