Alan Mccollugh Case Study: Circuit City Important Decisions
789 Words4 Pages
Circuit City Important Decisions:
• 1970s – Circuit city came under a new management and shifted their focus to merging the business. The decision was to close down all unprofitable stores and invest the revenue generated in a $2 million electronics superstore.
• Based on the success of the new superstores, the company started the operation to expand and transform its smaller stores into full-service electronic specialty store. Each store also offers in-store service capabilities.
• 1980s – The company had become publicly traded in the New York Stock Exchange. At this time period, Circuit City was the leading specialty retailer of brand name consumer electronic. Much of its success was due to their innovative products and heavy advertising.
• Early 2000 – CEO Alan McCollough eliminated major appliances from main locations resulted in the…show more content… • The beginning of the 21st century mark, the Circuit City slowly declined to the fall of a 60 year old company.
• CEO Alan McCollugh’s decision to eliminate major appliance from Circuit City and laid off 1,000 employees is an example of poor decision making. Reasons for this decision were the pressure from rising competitors and the potential to reduce costs. I believe that McCollugh did not diagnose the problem enough to implement the best alternatives; instead he just selected the option that was just satisficing. Even though the decision directly target the problem, but it was not well-thought out enough to compensate for future uncertainty
• McCollugh also hinder the store remodeling process of 140 stores to only 20 to 25 stores, which had a significant gap. This decision was made because remodeling was inefficient and it can reduce cost. So he sacrificed the potential future gain for immediate benefit which is a very directive decision