The Issues and Challenges

Circuit City started its operations in the consumer electronics retail market by implementing its five S’s operating philosophy. The philosophy entailed selection, speed, service, savings, and satisfaction. Circuit City fell victim to several poor decisions that eventually led to its falling and bankruptcy in 2008 and closing in 2009. The downfall of Circuit City started when the CEO, Alan McCollough, decided to eliminate significant appliances from the central location in 2000. This move resulted in the firm closing six distribution centers and the elimination of over 1000 jobs.

The decision was attributed to the increased competition in the appliances sector and the potential saving of operational costs, delivery costs, and warehouse storage. The exit in appliances was then followed by the announcement that Circuit city was investing in real estate. Circuit City failed to secure quality and strategic locations and instead invested in low coast leases that were inconvenient to its customers.

Circuit City’s commissioned sales force was a significant differentiator and was said to be a competitive advantage.

The commissioned sales gave Circuit city and resulted in the firm making more sales compared to its competitors such as Best Buy. However, due to falling sales and reduced profitability, Circuit City announced that 3,900 commissioned sales staff would be laid off and replaced with hourly employees. The firm aimed at simplifying store operations, reduce operation costs, and create a united customer service objective. However, this move resulted in a significant downfall in the firm’s overall sales and profit. In the year 2007, due to the declining sales and profits, Circuit City decided to reduce labor costs by firing over 3,400 employees (Hart et al, 2012).

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Among the laid-off employees were the most experienced, tenured, and knowledgeable staff.

On March 8, 2009, Circuit City shut down all its stores. On January 8, at the 2018 Consumer Electronics Show in Las Vegas, Circuit City CEO announced a comeback and relaunch of Circuit City into ‘a dynamic, a social-focused e-commerce site’ and a new business strategy for its retail stores. However, analysts were skeptical whether the site would have the service model needed to differentiate from the market leaders Best Buy, Amazon, and Alibaba. First, as the brand plots its return, many industry experts are wondering what it could offer that shoppers can’t already get from market leaders like Best Buy and Amazon. Secondly, the firm experienced slow growth in its e-commerce initiative. For instance, a visit to the website after launching yielded a simple ‘coming soon’ message, and after a few days, a new one a new message that greeted digital visitors (Digital Commerce 360, 2018). The inconvenient launching process negatively affected how customers perceived the firm, and many even doubted the success rate of Circuit City based on its slow startup.

Despite having a known brand advantage, reentering the market against formidable completion and consumers that are more demanding than in the past was a significant drawback for Circuit City’s e-commerce initiative. The firm would have to develop stores that create a brand presence and where the consumer can get help with the ever-increasing array of technology products and the complexity that comes with choosing and installing them. Lastly, Circuit City can be successful if it can provide products and an experience that differentiates it from its competitors (Digital Commerce 360, 2018). Consumer electronics have become a commodity category, with Best Buy and Amazon entrenched as market leaders. Major competitors in global e-commerce.

There was a time when Circuit City stores were the only ones that could closely rival Best Buy in terms of technology and electronics, but unfortunately, they closed some time ago to become an online store and later join the chain TigerDirect. According to Ronny Shmoel, owners of several major stores in New York, recently acquired the domain and brand of Circuit City, which Systemax owned, a company in charge of selling computers, accessories, accessories, and electronics several, as well as industrial products. Circuit city has Best Buy, Amazon and eBay as their competitors. Circuit City must find a way to improve his presence to give them a little fight on the market. But what makes these the major competitors on the market? Well, their understanding of customers, they know how to maintain a long-term relationship with their customers. On the other hand, they also admit their mistakes when they make one.

Of course, the approach through an e-commerce site is the best option. But later, they will need to have stores, to show their presence to their competence. Circuit City can be successful if it can provide products and an experience that differentiates it from its competitors. Ecommerce allows businesses to have a global reach and sell their products worldwide, you just have to find out where your audience is. Why IT in Business Technology is playing an important role in almost all business areas and our lives; it has transformed our lifestyle to the point where we use it for everything. If we consider the accelerated market dynamics, circuit city needs now more than ever (because of their reentrance to the market) to invest in technology. This will improve their processes and will provide them more value to their business. If this section is successful, it can achieve a bigger market share.

Investing in technology will help their company by rethinking and integrating some of their processes, also the costs will be reduced. Their communications will improve, and all of their processes will get better, everything will depend on implement a solid culture. If new technologies are accepted, this will help to stay updated in the present and the future(Zu Knyphausen-Aufseß& Westphal,2008). One of the benefits of digital commerce is that it does not require a large investment to start the business, unlike physical stores that must pay thousands of euros only for rent, in addition to having to invest in advance in things like the design and sign of the store, buy inventory, sales teams, among others. Also, another advantage of e-commerce is that online stores are always open, and with the commercials, you can attract someone at 11 p.m. or 4 a.m. The concept of Service Management has as its central axis the value proposition through the administration of organizational capacities for the effective transformation of elements to services. It is no secret that IT currently plays an essential role in the growth and development of organizations, regardless of their business. However, the effective IT service provider goes beyond meeting the current business needs: it provides solutions that meet needs that the business itself was not aware it had.

The modern service provider must think in terms of business value. The value is delivered in the form of services that enable the business to achieve its objectives. These services must be defined according to strategies that in turn must be aligned with those of the business so that both coexist serving the same vision. The provider and client must work together on a day-to-day basis through an environment that facilitates communication and promotes healthy interaction. The supplier must keep in mind that it is their duty to provide innovative services that give the business advantages in the market in which it competes, becoming a strategic business partner. Infrastructure required to support global e-commerce As a new CIO of global e-commerce organization, has to understand various infrastructure need to build to support various digital transformation to capture the market, to keep in mind various other competitors sweeping the business through digital transformation (Bendor-Samuel, 2019). Look at various constraints to build a new business model to present organizations in best way to enable advanced competitive tools to optimize business performance, that makes inventing new ideas into implementation to capture market with technology.

Circuit City company want to come back to relaunch a dynamic social focused e-commerce site that require to a huge infrastructure to support business intern succeed in gaining best customers and feasible operations. Now a days IT provides more value to the business, it’s a kind of IT runs e-commers business. On top of overall infrastructure to segregate technical infrastructure (Website, Phone Apps, Hosting, Domain) that including customer support service and non-technical infrastructure like Warehouse maintenance in various location for flexible delivery of supplies, manpower infrastructure to supports various departments like purchase, marketing, tech, support, logistics etc. IT infrastructure is a backbone to maintain e-commerce specially to host website running all the time with cost effective maintains (Microsoft Corporation, 2017), like integrating various cloud services to scaling service on demand, on top of it data warehouse maintenance, construction of centralized data analytics based on the sale or on demand sales to keep track of everything.