midterm report

Aaron Rodriguez, Robin Gines, Stephanie Hernandez

Marketing 3100-07

October 12, 2016

RadioShack Mid-term Report

Table of Contents

1. A Brief History of RadioShack (Robin & Stephanie) …………………...……........pg. 3-4
2. Report Body
1. Business Mission & Objectives (Robin) ……………………………..……. pg. 4-5
2. Problem Definition (Aaron) …………………...…………………………... pg. 5-6
3. Situation Analysis (Stephanie) ……………………………………………. pg. 6-7
4. Marketing Research Plan (Robin,Aaron) …………………………………...pg. 7-8
3. Bibliography ……………………………………………………………………... pg. 9-10
4. Appendices …………………………………………………………………………. pg. 11

A Brief History of RadioShack:

According to Wolf (2015), RadioShack started in Boston in 1921 as a small ham radio shop. In 1963, after 42 years, RadioShack nearly went bankrupt but it was saved when it was acquired by Tandy Corporation, a leather retailer. After that RadioShack slowly started to pick up momentum, quickly establishing a reputation of the to go store for all your electronic needs. In the 1970’s RadioShack was the leading retailer of CB Radios. In 1977, RadioShack introduced the TRS-80, the first mass produced computer, outselling every competitor and becoming one of the best companies of the time. After this peak in RadioShack’s history they remained stagnant, causing Dell and IBM to pull ahead and become more powerful computer companies working through multiple channels (Solomon, 2014).

Despite RadioShack falling behind, they tried their best to keep up with the changing market, making concentration stores that focus on specific items (i.e. Computer City to sell computers). This new direction proved to be unsuccessful and all of RadioShack’s new focused stores were closed by the 1990’s. Although RadioShack tried to keep up with the market by switching their focus from radios to computers, to calculators, and then finally to mobile phones and TVs, the company began moving into the shadows of new companies like Best Buy. Enough though RadioShack was starting to fall out of the spotlight, their initial success allowed them to retain their reputation for being the go to store for technology gear (Solomon, 2014). Between the years 2004 to 2013 RadioShack hardware sales fell 31 percent as they lost 42 percent of their store base (Wolf, 2015).

In RadioShack’s prime they were the go to spot for a hobbyist to get the parts they needed to assemble their own tech gadgets, they were the place people wanted to get their standard radios, speakers, or new phones from. In the early 2000’s, RadioShack was on top of the market and a major part of the technology industry, selling  parts and offering a wide variety of gadgets including cell phones. In the late 2000’s technology started advancing and people’s preferences started to shift, the way people were buying things was changing. While other companies started to approach the market at different angles in an attempt to keep up with their changing target market, RadioShack remained stagnant, this lead to RadioShack being left behind in the technology industry. In 2015, after 11 consecutive quarter losses, RadioShack filed for Chapter 11 Bankruptcy (Corrigan, 2015). Today RadioShack is struggling to find its way back into the spotlight after being in the shadow of other companies for so long. RadioShack is currently attempting to reestablish their brand as “your neighborhood electronic store”.

Business Mission & Objectives:

RadioShack is a currently a customization and retail business operating in the technology industry. Their goal as of 2014, according to their CEO Joe Magnacca, is to work together with the community and continue trying to be their customers’ neighborhood tech store; they’re also trying to connect with their customers through their slogan “Do it Together”, which promotes a relationship between RadioShack and their customers (Carracher, 2014). RadioShack plans to regain relevance by revamping their old stores and creating a new atmosphere, fixing their old reputation of customer service and strengthening what they were originally known for which are their DIY(Do-It-Yourself) products.

RadioShack is focused on building strong relationships with their customers and establishing a friendly, helpful, welcoming environment (Carracher, 2014). They are also trying to keep up with technological trends as so they will not fall behind and become irrelevant again. RadioShack is looking to redesign their store with a new look and focus on what they do best, DIY products. They want to work together with the community and be that go-to place where comes to satisfy their technological needs.

Problem Definition

RadioShack needs to fix their reputation and reestablish their brand while also reducing total costs because RadioShack is running out time and money. We are also focusing on strengthening customer service by providing exceptional technological support to ensure that our customer are satisfied and likely to return. Reducing costs is an important challenge RadioShack must overcome because they are losing more and more money with each passing quarter and to reestablish their brand and become relevant again they need time, reducing costs will help buy more time.

Another problem Radioshack is facing is that they’re still heavily relying on their physical stores instead of shifting their attention to e-commerce which has become increasingly popular. According to Isodore (2014) “once upon a time RadioShack (RSH) bragged about its network of stores, saying that 90% of the U.S. population lives or works within a few minutes of a RadioShack location. But today, when people can easily order the items online, those brick-and-mortar stores are dead weight. The stores are so close to one another they are essentially competing with themselves and are dragging the company down to its third-straight year of losses”. In this quote Isodore is saying that RadioShack’s expansive network of stores is not necessarily helpful to them because the internet is a major convenience factor that is prefered by most customers. RadioShack must improve their online presence because it is weak and most people don’t leave their homes no matter how close a store is to them.

Situation Analysis

As far as strengths go, RadioShack has competitive advantages with their customer excellence strategies. RadioShack is focused on providing excellent customer service. RadioShack associates are talented and passionate about helping customers, they are specifically trained to help make, create, innovate and solve problems with people everyday (Magnacca, 2014). RadioShack also has very broad product and service offerings which in turn leads to having a broader target market. The fact that RadioShack has been around for 90 years is also a strength because it means the brand is already well known.

A major weakness that affected RadioShack in the early 2000’s was their inability to adapt to their market. The presence of the internet changed the way people shop, E-Commerce became very important in the retail world but RadioShack did not adapt to their online market causing them to fall behind their competitors (Brown, 2014). Problems that RadioShack is facing today are the company’s increasing irrelevance and its financial struggles. Because RadioShack failed to adapt to its changing market they have been left in the shadows of bigger tech companies like Amazon and Best Buy that were able to successfully grow with their market. RadioShack is now a distant memory for most customers in the technology industry and is struggling to come back into the spotlight and reclaim relevance. Since failing to adapt to its changing market place RadioShack has been consistently losing money and finally filed for Chapter 11 Bankruptcy in 2015 (Wolf, 2015).

An opportunity RadioShack can capitalize on is expanding their products and services. For example RadioShack can try to expand their product inventory and reach out to different target markets as well as make more co-branded partnerships like they did with Nick Cannon and the NCredible Headphones that are exclusively sold at RadioShack. Another opportunity RadioShack can capitalize on is the increase in customer spending in the United States. Consumer spending has been steadily increasing since 2013 (See Appendix). This increase in consumer spending is an opportunity for RadioShack because people are spending more money at stores, potentially RadioShack.

A threat that RadioShack is facing is that there are many well-known competitors, like Amazon and BestBuy that are able to offer products at lower costs because they are mass merchandisers. RadioShack is also threatened by the increase in minimum wage. Along with the rise of minimum wage comes the rise of operational costs which impacts RadioShack because they are already losing profit and cannot afford to lose much more (Wolf, 2015).

Marketing Research Plan

RadioShack was once one of the top tech retail companies but has recently failed to adapt to the changing market of technology. They have lost recognition in the market place as Best Buy and Amazon, some of their competitors, continue to attract most of the young adults, ages 18-29, in their market.According to Anderson (2015),  68% of Americans have smartphones and 45% of them have tablets (See Appendix). In this generation where technology is being used everyday, everyone wants to buy the latest gadgets, which is what RadioShack has to focus on.

If RadioShack shifts their focus to having the latest gadgets they would be able to better compete with other companies in the technology industry like Best Buy and Amazon. To get our old customers back we need to approach the market at a different angle. Advancements in computer processing power and data storage in recent years are enabling myriad opportunities that were once impossible, both technologically and economically (Sollomi, 2016). RadioShack must focus on trends in technology to understand what our customers want. Through research we must find out how many people build their own technological devices, and the geographics and demographics of those people making their own devices.

To fulfill our research objectives we need to access qualitative data to understand how many people are still interested in building their own products and quantitative data to understand technology trends so we are able to stay on top of customer wants and needs. To find this information we need to explore data on tech users and distribute questionnaires as well as observe social media to get feedback about what people currently use and see if they are interested or willing to learn how to make their own products. Understanding our customers’ wants and needs is really important because it will allow us to make sure we can leave our customers feeling satisfied with their visit.

Bibliography:

Anderson, M. (2015, October 29). Technology Device Ownership: 2015. Retrieved October 12, 2016, from http://www.pewinternet.org/2015/10/29/technology-device-ownership-2015/

Bowen, K. (2015, March 23). Value Prop: How Radio Shack lost its way by losing sight of its ideal customer, Pt. 3 | MarketingExperiments Blog: Research-driven optimization, testing, and marketing ideas. Retrieved October 12, 2016, from http://www.marketingexperiments.com/blog/marketing-insights/radio-shack-value-prop-part.html

Carracher, J. (2014, March 19). RadioShack CEO Joe Magnacca: Bold Moves at an Iconic Retailer. Retrieved October 12, 2016, from https://www.cta.tech/News/Blog/Articles/2014/March/RadioShack-CEO-Joe-Magnacca-Bold-Moves-at-an-Iconi.aspx

Chaffey, D. (2016, April 27). Mobile marketing statistics 2016. Retrieved October 12, 2016, from http://www.smartinsights.com/mobile-marketing/mobile-marketing-analytics/mobile-marketing-statistics/

Corrigan, T. (2015, September 30). RadioShack Wins Final Approval of Chapter 11 Plan. Retrieved October 12, 2016, from http://www.wsj.com/articles/radioshack-wins-final-approval-of-chapter-11-plan-1443641043

Isidore, C. (2014, December 29). Time is running out for RadioShack. Retrieved October 12, 2016, from http://money.cnn.com/2014/12/29/news/companies/radioshack/

RadioShack Corporation; RadioShack Unveils New Brand Positioning Inspired by Collaborative, Do-It-Together Spirit. (14, February 15). Retrieved October 12, 2016, from http://la7ll5bk4f.search.serialssolutions.com/?ctx_ver=Z39.88-2004

Sallomi, P. (2015, October 11). 2016 Technology Industry Outlook | Deloitte US | Technology, Media & Telecommunications. Retrieved October 12, 2016, from http://www2.deloitte.com/us/en/pages/technology-media-and-telecommunications/articles/technology-industry-outlook.html

Solomon, S. D. (2014, September 16). A History of Misses for RadioShack. Retrieved October 12, 2016, from http://dealbook.nytimes.com/2014/09/16/for-radioshack-a-history-of-misses/?_r=1

United States Consumer Spending | 1950-2016 | Data | Chart | Calendar. (n.d.). Retrieved October 12, 2016, from http://www.tradingeconomics.com/united-states/consumer-spending

Wolf, A. (2015, February 16). RadioShack: A Brief History Of Time. Retrieved October 12, 2016, from http://www.twice.com/news/retail/radioshack-brief-history-time/56040

Appendices