Why was Circuit City so successful as to be featured in Good to Great? What was its strategic position during its successful period? How did it contribute to competitive advantage? Circuit City’s success derived from its ability to harmoniously combine point of sale/inventory tracking technology with great service provided by a knowledgeable, friendly staff. Circuit City was able to channel these core competencies into increased economic value which directly resulted in a competitive advantage over other companies in the industry. The external market in the 1990s was also thriving (due to the dot com boom) which helped to boost Circuit City’s economic value that much further. With the housing market up, their big ticket electronic items were …show more content…
Alan Wurtzel (Ramsey 2012) discusses the need for businesses to continue to change to be current/relevant with their customers. Circuit City became complacent with its multi-decade successful run and, rather than seeking to expand its customer base to different generations with different products, it remained in its comfort zone while competitors such as Best Buy took off with those strategies. Forbes (2011) does a nice job at pointing out why the competitive advantage was lost through five valuable lessons companies today should take away from Circuit City’s failure. 1) Recognize your consumer base [know what your customer’s needs are]. 2) Appreciate your competition [be aware of what is going on in your industry and with your competitors; do not overlook new strategic opportunities]. 3) Maintain strategy-implementation consistency [while strategy implementation is vital, so is maintaining reasonable key metrics] 4) Pay attention to trends and forecasts accordingly [executive management must keep their fingers on the pulse of the industry or they may find themselves in the state of time compression diseconomies as they attempt to catch up to their competitors] 5) Don’t use a band-aid on a gaping wound [respond to internal and external forces