The History Of Staples And Circuit City

Executive summary

In this formal report I will be comparing two big companies, Staples and Circuit City. Both come sold computer accessories and Electronics such as TVs, Computer, printers and ink etc. This report will give in depth details of why Circuit City went out of business and Staples is still in business.

This formal report will show the history of Staples and Circuit City. Why did Staples is still in business as of today and why is Circuit City out of business? What were the business model or strategy used by Staples, and the strategy used by Circuit City? This report will analyze the history, business strategy, and financial history of the companies. The case also highlights the importance of sound strategic business decisions, target marketing, and customer input. Moreover, the case points to the need for a retailer in such a competitive marketplace, with both brick and online competitors, to find its competitive advantage and adhere to it.

Background

History of Staples

I will start with the history of Staples. Myra Hart, Leo Kahn and Thomas G. Stemberg founded Staples in the late 1980s. The company opened its first store in Brighton, Massachusetts on May 1, 1986. Staples, Inc. is the country's largest operator of office supplies superstores, offering a vast selection of products at low prices, primarily to small business owners. Staples pioneered this concept in 1986 and grew rapidly after opening its first store in the Boston area. The company subsequently expanded to areas outside the Northeast; by the early 2000s, there were about 1,300 Staples outlets located both in major metropolitan areas and smaller markets in 45 states, the District of Columbia, and 10 Canadian provinces. In addition to the retail oper...

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...ty’s implementation of Superstores. These companies, however, were better able to see the advantages and disadvantages of the superstore, and parlay that knowledge into quick growth rate and a higher return on equity than Circuit City. On November 3, 2008, Circuit City announced that it would close 155 stores and lay off 17 percent of its workforce by year-end as a result of its ongoing struggle for profitability. Days later, 700 corporate employees were laid off from Circuit City’s headquarters and the 1,000 remaining corporate employees were merged into a single building in an effort to further cut costs. On November 10, 2008 Circuit City filed for bankruptcy. Circuit City had lost more than $5 billion in stock market value over the past two years. The company’s goal was to emerge from bankruptcy protection in mid-2009.

Fig 2. Circuit City Financial statement