...failure there are specific factors that can attribute to the outcome of the company’s demise. The closing of the electronic big box store, Circuit City is an example of a failed business. They were leaders in business for 60 years. Due to certain actions of management, this electronic retail giant, who was once the nation’s second largest electronics retailer was forced into bankruptcy on November 10, 2008 . 1 Circuit City’s success was built on a culture of discipline that practiced and followed the “4-S” model (service, selection, savings, satisfaction). “It was because of this consistency that Circuit City took off in the early 1980’s and beat the general stock market by more than 18 times during the next 15 years” (Collins, 2001). The slowly declining economy, housing market, limited available credit, unemployment rates, and increased competition compounded and accelerated the repercussions of the pre-existing problems that Circuit City faced started years before. Internally, Circuit City was already suffering from several years of declining sales. The Circuit City organization “made fatal mistakes which resulted in one of the most significant business failures in retail history. These mistakes undermined their own progress and ultimately killed them” (Eames, 2009 ). Today, many business leaders use this once thriving organization as a guideline to understand, analyze, and highlight how to avoid these mistakes and failures in their companies . ...
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...stuck in the middle? Just two years after filing bankruptcy, Kmart Corporation stunned the retail industry with the acquisition of Sears in November of 2004. The acquisition of Sears for Kmart was a part of a growth strategy to help build and strengthen the once dominant giant discount retailer. Between the 1960’s and through the 1980’s Kmart was the number one leading retailer in the discount department store industry. For 30 years Kmart seemed to be doing everything right but as they were growing they were also slipping into a deep hole. Many factors played into their eventual retrenchment but supply chain management was their biggest fault. During the 1990’s growing competitors like Target, Sears, and Home Depot took a piece of Kmart’s market place pie with Wal-Mart taking the biggest slice. As sales declined over time due to the increased competition, management also was neglecting the company’s supply chain operation. This neglect created a surplus of goods doomed for blue light specials that would have to be stored in semi-trucks beds behind the store because the current products on the shelves weren’t moving. By the start of 2000, Kmart locations looked like they had been foreclosed on with giant cement parking lots filled with maybe a dozen cars on a good day. Eventually retrenchment day came Kmart filed for bankruptcy in January of 2002. Kmart was able to regain control of the company and emerge from bankruptcy in May of 2003. The growth strategy to acquire...
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...economies of scale. Coke used its size and wealthy franchisees, to compete in price against Pepsi’s independent bottling plants in the 1950’s. This behavior carried forward until the 80’s when Coke began purchasing bottlers as part of Coca-Cola Enterprises, allowing them to be the “anchor bottler” for their own company. In the late 1980’s, Pepsi followed Coke’s lead again, adopting their “anchor bottler” strategy. This was a strategic barrier which became problematic for smaller concentrate producers who either wanted to enter the market, or were already part of the market and therefore very dependent on the Coke/Pepsi bottling network. Many were sent into bankruptcy as they could not compete with the two cola giants. Coke and Pepsi engaged in competitive battles across several fields, such as standard and mega retail outlets, fast food chains and restaurants, vending machines, gas stations and...
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...In just 15 years, Enron grew from nowhere to be America's seventh largest company, employing 21,000 staff in more than 40 countries. But the firm's success turned out to have involved an elaborate scam. Enron lied about its profits and stands accused of a range of shady dealings, including concealing debts so they didn't show up in the company's accounts. As the depth of the deception unfolded, investors and creditors retreated, forcing the firm into Chapter 11 bankruptcy in December. More than six months after a criminal inquiry was announced, the guilty parties have still not been brought to justice. The Enron scandal has far-reaching political and financial implications. A chorus of outraged investors, employees, pension holders and politicians are demanding to know why Enron's failings were not spotted earlier. And the US Justice Department is thought to be trying to charge several executives for fraud and money laundering. Prosecutors have come to a deal with one insider executive who will plead guilty and spill the beans about Enron's murky finances. There has already been a far-reaching investigation into the scandal by a number of congressional committees. * Three key players appeared involuntarily and then refused to speak in order to avoid incriminating themselves: 1- Andrew Fastow: Former chief financial officer, sacked as the scandal unfolded, and alleged author of the deceptive accounting practices. 2- Kenneth Lay: Enron's former chief executive...
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...Objectives & Organization Chart Objectives * To correct procedures and guidelines of MYDIN Retail Outlets * To update current requirements of MYDIN * To build a network with representatives of MYDIN | MARKETING PLANNING As a retail company in Malaysia, Mydin had implement several marketing planning to boost their sales and obtaining bigger market share. Therefore, this commentary will examine the marketing mix approached by Mydin to successfully market their product and formulate their marketing strategy. Therefore, Mydin can moves towards becoming a market leader PRODUCT Mydin has a wide range of product line such as food line, hard line and household items. Due to the wide range of product, Mydin will benefits from larger customer base. This will give positive advantage to Mydin as its customer can obtain all products needed here at lower and cheaper price. As a local player, Mydin provide items that are complement with its customers need. Majority of Malaysian are Muslims. Therefore, Mydin provide local prayer mats, prayer garments for women and traditional product which are rarely found elsewhere. However, Mydin should consider its non- muslim customers due to the image of the place where only Muslim shops PLACE Mydin is currently expending their business into different format namely hypermarket, emporium, and My Mart (24 hour convenience stores). As referred to growth of Mydin‟s chain by the year 2009 to 2020, the business...
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...Products and Services Paper Products and Services Paper Technology has drastically changed the retail industry. Today consumers are armed with tons of information that could be analyzed to help make buying decisions. Thus one could say that technology has provided the consumers with an avenue through which they can communicate feedbacks on product quality and brand to the retailers and brand. As a result of technological innovations, consumers can compare prices, research products, check inventory, provide product reviews, and even exchange or return recently purchased products from the comfort of their homes. This paper will present a case study outline of technological innovations that have helped shaped the retail industry with a focus on the Macy’s stores. Technologies affecting retail: Retail business as we know it today has been shaped by a mix of technologies. First and foremost amongst these technologies is the Internet. Others include Customer Relationship Management (CRM), Network technologies, social networks, mobile technologies, and e-commerce. Effect of technology on Macy’s The trend: Consumers are increasingly becoming very comfortable shopping online. According to Arvidson (2013), the US Census Bureau reported that about $165 billion worth of transactions took place over the internet in 2010. This represented a 15% increase over the previous year and it is a trend that is expected to continue on the...
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...the possibility of a General Motors Corp. bankruptcy, Chairman and Chief Executive G. Richard Wagoner Jr. decided he had heard enough. On Nov. 16 he declared in an internal memo to his 325,000 employees that bankruptcy is "unnecessary." There is no plan to file for Chapter 11 protection, Wagoner said flatly, calling such an action "contrary to the interests of our employees, stock- and bondholders, dealers, and our suppliers and customers." In other words, Wagoner was calling bankruptcy unthinkable. And for a long time, that's exactly the way it seemed. GM has $34 billion in cash and could free up roughly $15 billion more selling various businesses. That alone should be enough to keep the company running for a few years. What's more, its cash-burn rate of $2 billion a quarter will slow down as a recent restructuring, which will eliminate nine factories and 30,000 workers over three years, takes hold. But despite Wagoner's protestations, investors are clearly starting to ponder the unthinkable. The price of GM's credit-default swaps, which are insurance in case the carmaker can't pay back its loans, have soared in the past month. They now cost a premium of 12 percentage points of the value of the debt that they insure, four times what they cost in January. Few people believe that Washington would help bail out GM, as it did with Chrysler. Investors, suppliers, and employees, meanwhile, are starting to imagine how a GM bankruptcy would unfold and taking steps to defend themselves...
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...more painful is when you make a mistake, and you have to go through those sheets manually, because they don’t have Microsoft to help them at that time. Nowadays, most of the companies around the world do accounting on computer which is much easier and more efficient. Moreover, taking internet as an example, it provides us with all latest news around the globe. Just with simply clicks, we could buy plane tickets, book hotels, make appointments with doctors, and do shopping anytime as online stores open around the clock and almost every industry is internet based nowadays. Amazon.com, founded just 16 years ago it has a market value of 52.81 billion, which already surpasses long standing giants like Target (market cap: 37.03B), and many other well known retail chains, has become the largest retail website on the internet, having nearly three times as much revenue as second place Staples. Amazon’s success is one of the good examples that IT does matters. Amazon’s CEO Jeff Bezos states that “technology, technology, technology” are the key to his business. In an interview by Business Week, Jeff mentioned Amazon is unique "only because we've hired some of the most talented computer scientists in the world". He also stated that hiring the best and brightest software engineers and computer scientists in the world has always been the focus of Amazon. The latest innovation of Amazon is launching Kindle, a tiny, compact and portable easy-to-use reading device about the size of...
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...greater discount than other deep discount stores like Wal-Mart. While the practice of selling at such low cost attract customers, Phar-Mor was experiencing losses. The prices were cut so low that profit would not be generated. And this was how the fraud began. To prevent the truth from damaging Phar-Mor’s appearance, the president and other top management employees decided to cook the books by using creative accounting practices that were against the rules of GAAP and GAAS. Other than that, there was also an embezzlement of cash by the president and CFO of Phar-Mor. When the fraud was finally uncovered, investors have lost over one billion dollars, and the fraud was estimated to be over $500 million. Soon afterwards, Phar-Mor had to file for bankruptcy. By the end of the month, Phar-Mor had to lay off over 10,000 of their employees and close over 100 of their stores all across the state. Several charges were filed against Phar-Mor’s top executives and auditors. By the end of the trial, the financial statement fraud that occurred in Phar-Mor was deemed to be one of the largest corporate scandal recorded in history. Background The first Phar-Mor store was opened in Cleveland by Mickey Monus in 1982. According to JRO, Monus was the son of a businessman and World War II veteran Nathan Monus. He grew up in a privileged world. And after seeing the “impact of the loss of blue-collar jobs in the auto, tire, and steel industries in the Youngstown and Cleveland areas,” he had an idea “to...
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...Sears Chairman Edward Lambert Edward Lambert is the chairman of Sears Holding Corporation (SHLD). He is known as the Steven Jobs of the investing world. He thinks differently, acts differently, and achieves extraordinary results. Lambert was thought to be crazy when he decided to invest Kmart which was on the verge of chapter 11 bankruptcy. Lambert is a man that sees things as a bigger picture. When he decided to invest in Kmart he knew he wasn’t taking a risk. “Kmart’s bankruptcy is avoidable” he said Edward Lambert is a person who tends to centralize authority and derive power from his position. Those are characteristics of an autocratic leader. Lambert is known for his prickly personality and hands on management style. This shows that Lambert is a directive leader. He likes telling his subordinates what they are supposed to do. Those characteristics are also the same as a leadership called the telling style. Lambert likes to control his subordinates by initiating structure and style. Lambert is also a Micromanager. He has a high concern for tasks and a low concern for people and relationship. This is a part of the reason why sears is in its current crisis. As an independent thinker Lambert has made decisions off his own beliefs. Lambert wants things to go the way he planned it in his mind. If it doesn’t, it’s wrong. He is a person willing to stand a part, state his opinion, and say what he thinks based on his own personal beliefs. This has also contributed to the down...
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...the television sitcom ‘That 70’s Show’ it is depicted how an appliance store ‘Bargain Bob’ is driven to bankruptcy by the arrival of a large superstore called ‘Price Mart’ in the city of Wisconsin. This superstore provided appliances at a much lower cost than what the small retailers could afford. As a result the small stores had to shut down. While on one hand Price Mart took away some jobs it created many more to compensate for the unemployment created by the closure of a manufacturing plant in the same town. This illustrates a common outcome of the arrival of giant retail companies in otherwise unexplored geographies. This is also touted as the reason why many governments were initially and many still are opposed to the idea of allowing large retail companies to set up shop especially if they are from abroad. One of such large retailer is IKEA which has of late managed to enter the Asian market. IKEA is known all over the world as a low cost high quality provider of ready to assemble furniture. This is about what the company does and not what it stands for. IKEA is a symbol of excellence that serves as an inspiration for entrepreneurs and business houses alike. There are no two views about the successful business model adopted by IKEA which also has a strong value system. There are fewer controversies and lot more accolades for IKEA as compared to other large retail giants. What is more fascinating however is the fact that in spite of being a large and powerful entity IKEA...
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...from $78.50 in 1999, to $2.66 in 2013; and they are now valued at only $270 million as an international retail chain. In the last few years, they have faced stronger competition and continuously fail to target a niche market. This means that they have not established a group of people to market to, or a certain set of products in which to successfully sell them. Being in the electronics industry is always dangerous because of the varying worldwide trends they see, and RadioShack made a big mistake by attempting to meet the wants of “all” electronics customers. Instead of carefully targeting a niche market, RadioShack has attempted to offer the same products as, and compete with, global giants such as Apple, Best Buy, and Amazon. RadioShack began as a store that sold a large variety of radio equipment, accessories, spare parts, testing gear, and technician tools. With the constant change in technology and demand for it, they went away from their roots and something went terribly wrong. They decided to drop the idea of being an “old obsolete radio store” and attempted to shift into the 21st century, yet if you ask a millennial what they buy at RadioShack, the most likely answer is “nothing”. RadioShack attempted to adapt by bringing in cell phones, computers, and hi-tech consumer electronics, and kicking out old radio and broadcasting equipment. This led to the bankruptcy problem they have today because they are forced to face much larger competitors like HH Gregg, Best Buy...
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...(2011) states that companies may become diversified by entering into new businesses on its own, by merging with another company or by acquiring a company operating in another field or service sector. One of the challenges facing diversified companies is the need to maintain a strong strategic focus to produce solid financial returns for shareholders instead of diluting corporate value through ill-conceived acquisitions or expansions. Wal-Mart and Kmart; along with Target are the three primary retail giants in the United States. This paper will compare and contrast Wal-Mart and Kmart Corporations. According to Wal-Mart’s website: “Wal-Mart serves customers and members more than 200 million times per week at more than 9759 retail units under 60 different banners in 28 countries. With fiscal year 2010 sales of $405billion, Wal-Mart is the world’s largest private employer; employing...
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...small book outlining ethics and guidelines that should be followed on a daily basis, many of them do not fully comply. The oxymoron “American Business Ethics” contradicts American Business with Ethics. The ethics of many American companies are not law but should be treated as such however these regulations are rarely followed and sometimes not followed at all. The risks that companies have been taking to increase profits and put more money into the CEO’s pockets use illegal actions. In recent times, companies such as Enron, Wal-Mart and BP have been guilty of multiple charges against ethical principles which have led to bankruptcies, housing market crashes and environmental disasters. The most famous case related to Enron and their aggressive accounting practices of reporting losses as profits to keep the stock price high. This act ultimately led to the bankruptcy of the company. Enron was founded in Omaha, Nebraska by Kenneth Lay in 1985. It was an American energy, commodities and services company based in Houston, Texas. Enron was once viewed as one of the best companies in America during its initial years of operation. Fortune magazine named Enron “America’s Most Innovative Company” for six consecutive years. Enron employed 20,000 employees, owned multiple pipelines and power plants in addition to a stock price that hit a peak of $90. Enron had an extensive code of ethics policy. This policy was 64 pages long and described each policy and the consequences for breaking them...
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...this year. In an attempt to improve the bottom line, Bylund points out that Best Buy plans to cut 2,400 jobs, including 600 of its technical Geek Squad employees, and replace them with minimum wage hires. Bylund compares the lay-offs to a move a former rival made several years earlier. According to the article, Best Buy’s chief rival, Circuit City, laid-off a sizeable portion of its managerial staff and technical workforce in a last-ditch effort to stave off closure. Unfortunately, those lay-offs led to bankruptcy, which eventually led to the liquidation of America’s second largest electronics retailer. Bylund goes on to propose that, unlike Circuit City, Best Buy doesn't have an easily identifiable adversary at this time, ready to absorb the electronic giant’s fleeing customers. However, the article suggests that there are several big-box discount giants and an online retail behemoth lurking in the electronic fringes, ready to strike a lethal blow. The brick-and-mortar retail stores are having trouble, Bylund contends, keeping up with online retailers like Amazon, and it's starting to show more and more as brick-and-mortar company’s like Best Buy continue cutting jobs. Bylund’s analysis of the Best Buy situation is simple but convincing. It’s difficult not to compare Best Buy’s recent troubles with those of shuttered Circuit City and to draw parallels to its possible demise. Nevertheless, while there are similarities, Best Buy's competitive situation appears far different...
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