Essay on Best Buy -Circuit City Case Search

1235 Words Mar 1st, 2014 5 Pages
Best Buy- Circuit City Case-17% 1. Be an informed consumer evaluate where the replacement of highly paid workers with lower paid worker did or did not cause Circuit city to perform so poorly. How confident are you in your evaluation? Why?
In evaluating whether or not the replacement of highly paid workers with lower –paid worker at Circuit City caused them to perform poorly I found several factors that lead me to believe this to be true. Circuit City started off being the number one retailer of electronics. It was faced with competition from Best Buy and other large retailers such as Wal-Mart. Circuit City was forced with making changes within the company to keep their position within the market that they didn’t take. In 2003
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They will also close 50 stores and cut 400 corporate jobs to aim to cut $800 million in cost. While Best Buy is now experiencing current difficulties I would not point my fingers at the compensation changes they have made as being the culprit of their difficulties. In looking at the data of stock prices and customer satisfaction Best Buy customer satisfaction index dropped from 2009 to 2010. I believe this is due to the increasing amount of discount retailers such as Amazon and Wal-Mart who sell the same consumer electronics at discounted prices. Best buy already had a compensation strategy that was derived of younger less experienced people who made lower wages and smaller bonuses. They prided themselves on sales and quality while companies such as Walmart and Amazon specialize in delivering low cost product to the consumer.
Best Buy began losing sales of expensive items like TV’s. Customer could now go to stores like Walmart and Target and get cheaper TV’s off the shelf. The company made a valuable decision to take on a new compensation strategy. 3. Why are Walmart, Sam’s Club and Costco doing better than Best buy? Do they have high pay?

Walmart’s mission statement is people saving money living a better life. Sam’s Club mission is to make savings simple for members by providing them with exciting, quality merchandise and a superior shopping experience, all at a great value. Costco mission is to continually provide our members with

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