RadioShack

RadioShack was founded in 1921. The industry it was primarily in was retail electronics.
Although RadioShack has run into various problems over the years, the most recent problem
it faced was that it was unable to reposition itself according to the rapid technological
changes. As the technology evolved, online shopping, especially for electronics, increased
rapidly, and with the US, RadioShack’s market, being at the center of this change,
RadioShack ran into trouble.
The problems faced by RadioShack were:
1. Not only was there a paradigm shift in the electronics industry, but people also started
associating RadioShack with obsolete technology as they continued their previous
practices. It was still stuck in following brick and mortar model. (positioning
problem)
2. RadioShack lost its focus on its main customers as they made mobile phone sales their
priority. By 2014, mobile phones alone accounted for 50% of the company’s total
sales. This was a precarious strategy and proved to be fatal after the rise of
competitors like the iPhone. (performance problem)
3. RadioShack did not go digital when it should have and found itself out of favor in the
digital era. The competitors, like Amazon, in the digital landscape, kept on rising,
which further made matters worse for the company. Not only digital but even in the
retail store industry, it found it tough with the rise of competitors like Apple stores.
(competition problem)
4. RadioShack mostly sold its private label, which customers did not recognize as a
quality label, and thus there was no loyalty for the brand. (performance problem)
5. The rise in technology made it easier to compare the price of products with others and
thus reduced the switching cost. (competition problem)
6. Even the location of RadioShack stores was a problem as they were primarily located
in small malls, which itself was facing problems due to a reduction in footfall.
(location problem)
7. The company had too many stores closer to each other, which led to the
cannibalization of its sales. (location problem)
The impact of this problem was that RadioShack’s sales kept on declining as they kept losing
their customers to the competitors. The customers lost faith in the company and found many
superior alternatives. RadioShack went through a series of problems one after the other.
Eventually, it went bankrupt, and it filed for bankruptcy protection.
The solution on what it could have done differently is
1. It should have conducted thorough marketing research to understand the discrepancy
between the desired and actual state of the customers and understand the changing
nature of the market.
2. It should have looked at ways to reposition itself. Instead of sustaining the existing
model, they should have included online retailing as a part of their business model
earlier. They did not do it quickly enough and were left behind.
3. Instead of focusing on mobile phone sales, it should have identified the market it
serves and focused on the DIY crowd, the market it had a great hold over compared to
any other company. It should have catered to that market and should have looked to
strengthen its position in that market.

Another problem that RadioShack faced was that of brand personality it had created.