Sample Details
Subjects
Business
Case Study
Type
Essay
Reviewed by
Dr. Olha Stoliarchuk
Pages
1
Words
456
Updated:

Circuit City’s Decline: Management Failures and Inability to Adapt Essay

Exclusively available on Available only on IvyPanda® Written by Human No AI

The Reasons of the Company’s Downfall

Circuit City was one of the first successful electronics stores in the US. However, its sales decline over the years, leading to its collapse. The company’s failure can be attributed to organizational resistance to change and poor management decisions (Bright Sun Films, 2016).

The first reason is their inability to find the best investment direction. While Circuit City decided to invest in disposable disks, they failed to gain momentum with the appearance of DVD, beating on failing technology. This string of failures led to the second part of the problem related to the failure to manage stores properly. The second reason is connected with poor management and the provided decisions. Everything from location to misdirection of customer service and consequent misguided firing of employees caused the company’s ruin.

Management’s Oversight of External Retail Industry Shifts

Both of these reasons reflect the company’s inability to recognize significant changes occurring within the external environment of the retail industry and its failure to adapt to them. As mentioned, its misguided investment in disposable disks instead of DVDs is one example. Moreover, Circuit City seemed to realize this problem, as it tried to mimic and change its business to be similar to that of Best Buy. However, it was too late, and the execution of this transformation was done poorly, resulting in the loss of valuable human resources.

Internal Challenges and Their Role in the Company’s Decline

This fact shows that internal issues were responsible for the company’s ills. However, as in the case of other companies, it was not a result of massive corruption or embezzlement. It was a management issue, as it failed to manage the company properly and set the right direction for growth. In one instance, the management made terrible decisions from a business perspective in locating the stores in remote areas, extremely confident in its market appeal and lack of competition. This resulted in Best Buy monopolizing customers and growing its market share.

Top Three Reasons for the Company’s Failure and Strategies for Prevention

Overall, Circuit City’s failure is due to the inability to adapt and poor management, as mentioned previously. In addition, it is also worth bearing in mind that all decisions made affect the company’s history, exposing it to reputational and potential investment risks. The current situation thus directly destroys all the values accepted before, and it is necessary to focus first and foremost on solving this issue. Circuit City could have avoided these issues by investing and researching more appealing electronics and managing the store’s location and customer service better. The case study for these better choices could be Best Buy, which succeeded in the failure of Circuit City and is still standing to this day.

Reference

Bright Sun Films. (2016). Abandoned – Circuit City [Video file]. Web.

Cite This paper
You're welcome to use this sample in your assignment. Be sure to cite it correctly

Reference

IvyPanda. (2025, July 2). Circuit City’s Decline: Management Failures and Inability to Adapt. https://ivypanda.com/essays/circuit-citys-decline-management-failures-and-inability-to-adapt/

Work Cited

"Circuit City’s Decline: Management Failures and Inability to Adapt." IvyPanda, 2 July 2025, ivypanda.com/essays/circuit-citys-decline-management-failures-and-inability-to-adapt/.

References

IvyPanda. (2025) 'Circuit City’s Decline: Management Failures and Inability to Adapt'. 2 July. (Accessed: 15 July 2025).

References

IvyPanda. 2025. "Circuit City’s Decline: Management Failures and Inability to Adapt." July 2, 2025. https://ivypanda.com/essays/circuit-citys-decline-management-failures-and-inability-to-adapt/.

1. IvyPanda. "Circuit City’s Decline: Management Failures and Inability to Adapt." July 2, 2025. https://ivypanda.com/essays/circuit-citys-decline-management-failures-and-inability-to-adapt/.


Bibliography


IvyPanda. "Circuit City’s Decline: Management Failures and Inability to Adapt." July 2, 2025. https://ivypanda.com/essays/circuit-citys-decline-management-failures-and-inability-to-adapt/.

More Essays on Case Study
If, for any reason, you believe that this content should not be published on our website, you can request its removal.
Updated:
1 Star2 Stars3 Stars4 Stars5 Stars
LoadingLoading...
This academic paper example has been carefully picked, checked, and refined by our editorial team.
No AI was involved: only qualified experts contributed.
You are free to use it for the following purposes:
  • To find inspiration for your paper and overcome writer’s block
  • As a source of information (ensure proper referencing)
  • As a template for your assignment
Circuit City’s Decline: Management Failures and Inability to Adapt. Page 1
Circuit City’s Decline: Management Failures and Inability to Adapt. Page 2
Circuit City’s Decline: Management Failures and Inability to Adapt. Page 1
Circuit City’s Decline: Management Failures and Inability to Adapt. Page 2
1 / 2