This week’s resignation of RadioShack’s CEO David Edmondson for allegedly lying on his resume is the least of the company’s worries. RadioShack’s shares have fallen about 43 percent since the start of 2005. In the era of big box retailers such as Best Buy, Circuit City, and even Wal-Mart dominating consumer electronics, how can RadioShack possibly be competitive in this sector? What is RadioShack’s competitive advantage besides offering a wide variety of hard to find batteries?
The company’s current turnaround strategy is to close between 400-700 stores, close two distribution centers, and focus on higher-margin, growth categories. Of course, focusing on higher-margin, growth categories sounds great, but that’s been the Shack’s strategy for several years!
Does anybody have any innovative ideas for how to resuscitate RadioShack? Please comment or email me. Thanks, Matt
February 27th, 2006 at 3:07 pm
When I was a geeky teenager in the late ’70s, Radio Shack was the next best thing to heaven for me. Any bit of money I got went into some electronic gadget or other, and the Radio Shack catalog was my favorite piece of reading material. The stuff in there blew my mind. The people who worked there were always knowledgeable and helpful.
Fast forward to six months ago. I needed to buy a length of TV cable, so I went to my local Shack. After being unable to find what I needed, I asked the workers there (all teenagers). None had any idea what I was talking about (TV CABLE, for heaven’s sake!!!). Worse, they acted as if I was bothering them! So I left. I found what I needed quickly and easily across the street at Wal-Mart… probably for a fraction of the price. Wal-Mart’s electronic section is so extensive that I doubt I’ll ever have need to go back to Radio Shack.
My advice to Radio Shack would be to get back to your roots. Quit trying to compete with Circuit City and Best Buy, and focus on the hardcore technical geeks and hobbyists out there who need to buy weird, obscure and innovative stuff. Be like Brookstone or Sharper Image, only more “techie.” And for God’s sake, make sure you hire people who know their products and actually give a damn! Sure, you might have to close some stores, but you’ll survive in a niche that the big boxes can’t serve.