Circuit City Stores Inc B Case Study Help


Home >> Harvard >> Circuit City Stores Inc B >>

Circuit City Stores Inc B Case Study Analysis

Background and Facts

Circuit City Stores Inc B a workplace products retailer for little as well as moderate sized businesses has lately been involved in planning for a merging with its competitor House Deport, which has actually impacted effectiveness degrees in departmentswith the elderly supervisor involved in lawful difficulties put forth by the government Profession Payment. With the Advertising and marketing Head putting forward the information of his departure from the firm in one year, Jeannie Lewis, the existing head of procedures has actually been asked to take the duty in the future. With challenges in the form of a possible cultural modification and reduced worker morale, the company is in need of a complete reengineering effort at the advertising department.

Trouble Declaration
Porter's 5 Forces Analysis
The prospective cultural modification at the advertising and marketing division of Circuit City Stores Inc B is boosting unpredictability in the workplace causing various obstacles for the Jeannie Lewis who would be replacing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant role in affecting tactical decisions because Stapes Inc. had to abandon its strategies of combining with Office Deport after the Federal Profession Commission's treatment in the process. Provided the fact that the store has an international visibility with branches in UK, USA, Canada and Germany, political consider each of these countries might have the ability to impact performance or critical objectives. Federal Profession Commission's antitrust suit versus the merger took up important time of the company's elderly monitoring suggesting that 'political' factors can have severe ramifications for an international service.

Economic Factors: Financial factors such as the appearance of local business in the global scenario suggest that Circuit City Stores Inc B is flourishing in an environment where there is potential development of organisations. In addition to this, truth that store consumers are mainly trying to find office products for office recommends that the market has an increasing fad of entrepreneurs as well as home based businesses.

Social factors: Social trends in the economic climate reveal that clients are trying to find ease as well as attractive costs. Marketing research shows how the customer for Circuit City Stores Inc B lacks understanding regarding locating solutions which can provide a mix of ease as well as affordable.

Technical factors: Innovation plays an essential role in Circuit City Stores Inc B's organisation strategy specifically as the organization is piloting Modern technology facilities which would provide modern technology sales and assistance in the kind of memory upgrades, peripheral installments. (Summary of INSECT in appendix 2).

OB Issues and also Effects.

Numerous underlying Organizational Actions concerns can be seen in Circuit City Stores Inc B's case as highlighted in this area.

Apprehensions regarding cultural change: There is worry about a cultural adjustment that would occur once Todd Krasnow leaves from his position as the Executive Vice President of Advertising And Marketing with the majority of the staff members currently revealing discontent over this potential relocation. This anticipated change has actually produced stress in the office which has actually been combined with the past stress and anxiety of preparing the company for a potential merger with Residence Deport.
Pest Analysis
Demanding Task Setting for Newcomers: There is shortage of employees that can match the demanding atmosphere of a hectic company. Not just does this cause trouble in discovering the right individuals, it places anxiety on brand-new hires as can not withstand the pace and also pressure that the organization anticipates them to bear.

Double Reporting Lines: Novices discover this business society cumbersome as well as tough to handle specifically as populated line relationships are implied to be weak generally and also unbiased setup and also performance analysis is still done by the solid line supervisor. This suggests that newcomers can shed clearness concerning their particular functions and also purposes particularly as dotted line coverage does not keep them in direct communication with the strong line supervisors.

Resentment From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower as opposed to Bridget Coles although it had actually been guessed that the last would certainly take Krasnow's placement came as a strike to her morale. Lewis may have been qualified as well as suitable for the work however the fact that Kransnow's departure would make Coles a direct report to Lewis may have been the reason for Coles' resignation from solutions.

Worry & Job Instability: Concern and also instability can be determined as two major problems that Lewis would certainly be managing especially as the merger has actually now be terminated and two senior executives of the marketing division would be leaving. The entire duty of the division would be dropping on Lewis's shoulders that would certainly not just supervise of brining regarding a social modification but would also have to confirm herself in her new role.

Inappropriate Administration Style of Leader: Lewis's monitoring design and also its incompatibility with the marketing department's function can additionally be seen as an OB challenge particularly as she has actually been used to handling problems in the operations department where employees are instructed to focus on procedures and obtain them. The marketing division on the various other hand can be seen as a group of people who are made use of to being supported by Krasnow who concentrated more on outcome than processes.

Interdepartmental Disputes: Interdepartmental arguments in between 3 departments, advertising, merchandizing and also operations specifically over the appropriation of the advertising mix can be recognized as one more OB worry. Although the marketing department does not share the exact same vision as the other 2 departments concerning the aloocation of the marketing mix twoards promos and advertsing, the merchandizing as well as operations divisions do not agree over the advertising mix appropriation amongst each other either.

Disintegration in Advertising Division: Fragmentation in between the marketing and advertising divisions can be identified as an additional OB issue which might need further focus. The fact that the marketing and advertising areas in the advertising and marketing division are detached is avoiding both departments from gaining from each various other's experience as well as competence. Combination of marketing with retailing and also operations would certainly come to be more difficult if the marketing department itself is disintegrated which can be another prospective OB concern.

Circuit City Stores Inc B Analysis

Numerous theories have been used to discuss the conditions to get more clearness regarding the circumstance handy.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Concept X, many supervisors think that juniors are easy as well as lazy, have little passion and also withstand adjustment. The tough variation of this concept emphasized threat, tight controls, dangers as well as punishments. In time it produces low productivity, subtle sabotage as well as rivalry (Deal, 2003). The circumstance at Circuit City Stores Inc B is not entirely adhering to Theory X, it can be seen that brand-new hires are locating this setting instead stressful which may at some point lead to a greater inclination of the management in the direction of Theory X. Based on McGregor's advocated sight, which he called Theory Y, the important task of the management is to prepare business problems to ensure that individuals can attain their very own goals best by guiding their initiatives in the direction of business benefits. If individuals discover no complete satisfaction in their job, the administration would have little option but to count on theory X as well as external control (Deal, 2003). Also while assessing Lewis's monitoring design, concept X might have been suitable in the operations department to some extent but the Marketing division would certainly call for dependence on Concept Y to get the imagination and creativity from the teams.

Tuckman's Teamwork Concept: As far as Lewis's concern about bringing consistency in between the advertising and marketing division is worried, this would at first lead to contrast as talked about by Bruce Tuckman in his 'Synergy Theory'. (Tuckman, 1965). As per Tuckman's theory received appendix 3, during the preliminary stage of group advancement, people may not bond, as they are active locating their place in the team. By integrating the advertising and marketing division's job, there might coincide preliminary disconnect which could lead to the second phase of 'storming' where the groups test each other. It is just throughout the third phase or 'norming' when they would come with each other to share suggestions prior to the team can bring around harmony in the fourth stage 'performing'.

Bridges' Transition Version: As per William Bridge's theory (appendix 4), people are quite awkward with change, which is obvious by the circumstance at Circuit City Stores Inc B The situation can be seen as a regular training course of life if is researched according to Bridge's theory where he clarifies that individuals undergo three stages of shift when they experience change. 'Ending, shedding and also Releasing', The Neutral Area and also 'The New Beginning' (Bridges, 2004). When individuals are presented with change, they enter stage one therefore there might be emotions like sadness, unpredictability, disappointment, rage, fear, rejection and also disorientation.The circumstance at the marketing department of Circuit City Stores Inc B is comparable so Lewis can get comfy with the idea that it is not remarkable habits. In the second stage, there may be a demand to connect the space in between the new and also old culture so Lewis may need to face this experience when Krasnow leaves. There might be reduced spirits and also low performance at this phase which ought to not be taken as an obstacle. It is throughout this phase that Lewis will need to give guidance to the division to ensure that they can discover an orientation. It can be seen how Krasnow has actually currently made this shift easier by making Lewis get involved in the department a year prior to his real separation. Based on Bridges' Version, phase 3 will produce openness to learning, High energy as well as commitment as people will welcome the modification (Bridges, 2004).
Vrio Analysis
Maslow's Need hierarchy: The OB issue related to insecurity at the work environment has actually been activated firstly by the change in administration as well as second of all by the reality that the merger will certainly no longer be initiated. Abraham Maslow in his Theory of 'Requirements Power structure' (appendix 5) has discusses the value of 'security needs as being a reduced degree requirement of a human for activating motivation. As seen in the pyramid cooperated appendix 3, we can see how 'the need to really feel protected and also unharmed' goes to the 2nd level of demands. Before a staff member can be made to establish emotionally, he needs to have his 'Physical 'as well as 'Safety' needs fulfilled. This suggests that unless the employees are made to really feel secure regarding their current work status in Circuit City Stores Inc B they may not get to 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Circuit City Stores Inc B Case Study

Ramification of Analysis.

The OB analysis has actually considered various concepts to comprehend just how to handle the current scenario at hand. The complying with three alternatives have been suggested to aid Lewis handle the business challenges in the marketing department. Each of these alternatives has actually been proposed for relieving the shift needed to bring the advertising division in line with the demands of the market as well as for making the social modification that would certainly comply with once the present leader leaves.

Assimilation of advertising and marketing features. Separating Adverting and also Production features. Assimilation of Advertising And Marketing with Procedures.

Assessment of Alternatives.

Judith Shapiro who has actually earlier been talked to by Lewis throughout the earlier merging days has know-how in business-to-business advertising along with agency and retail advertising experience. When Krasnow leaves, Lewis can hire Shapiro as an EVP for marketing to handle both advertising and marketing and also advertising functions.

The advantage of this technique is that it will certainly incorporate the two functions while reducing the need for working with an added source for advertising and marketing. In addition to this, Lewis would certainly be heading the advertising and marketing division as well as all the same her substitute would certainly be required for the present role that she is carrying out. The negative aspect of this option is that external hiring might cause resentment from interior personnel that may be looking at the position of EVP after Lewis takes over Krasnow's position.

Separating Adverting and also Manufacturing: Provided the affordable pressures and also high quality work called for from the ad agency, it is suggested that Lewis needs to allow the manufacturing system to be a separate feature from the advertising device. Given that most advertising agencies had these 2 features as different devices, it makes more sense to adhere to the standard. Both features may be able to concentrate on their core turns on more effectively. Nonetheless, the negative aspect of this method would be that additional prices would certainly need to be birthed for setting up different production functions. Along with this, a manufacturing head may need to be employed which can raise expenses for the organization.

Assimilation of Marketing with Operations: Considering that Lewis is already taking care of the advertising and marketing and operations departments all at once; it makes good sense to integrate the two functions considering that she has actually been successfully caring for both ends. The truth that both divisions already have significant distinctions over allotment of resources recommends that this assimilation may be able to produce harmony particularly as Lewis would certainly be heading both ends.However there are different negative aspects of this relocation especially as it would put way too much worry over Lewis's shoulders. The reality that Lewis needs to adjust her administration style for the marketing department recommends that these two departments would certainly be culturally varied. Lewis may not be able to use one kind of management design to both divisions which could result in inadequacy in either one of the 2 functions.


An assessment of the three alternatives indicates that combination of marketing as well as procedures would certainly not be a viable action as a result of the huge distinctions between both departments despite the fact that currently Lewis is taking care of both. While separation of the production function might have been a desirable relocation for the advertising and marketing department, the truth that it would certainly indicate positioning a 3rd feature under Lewis's wing suggests this need to be avoided. The integration of the marketing division is the very best alternative in terms of obtaining the ideal results from the department. An action prepare for this choice is reviewed listed below.

Action Plan.
Lewis will certainly take over the duty of EVP Marketing after Krasnow leaves.

Marketing and advertising features would certainly be merged.

Judith Shapiro will be employed to take Lewis's area as SVP of advertising and marketing.

Manufacturing function will continue to be part of advertising under marketing function.

Lewis will divide herself from procedures.

An autonomous management style with staff member empowerment will be used in marketing division.

Open door policy as well as focus on cross departmental interaction will certainly be focused on eliminating dissonance.

Contingency plan.

If the integration does not work out as intended, a contingency strategy would certainly adhere to which would certainly separate the manufacturing function from the advertising and marketing function to lower the tons on the SVP of advertising and marketing. In case Judith Shapiro does not obtain employed, Lewis will certainly be heading the advertising and marketing division without an SVP. In that case the production feature will most definitely be divided by positioning it under an SVP production.