1. Thinking back to our discussion in the chapter section, Caveat Emptor—Be An Informed Consumer, evaluate whether the replacement of highly paid workers with lower-paid workers did or did not cause Circuit City to perform so poorly. How confident are you in your evaluation? Why?
Yes,
definitely the replacement of highly paid workers with lower-paid-workers cause
Circuit City to perform so poorly. The main reason behind is trying to copy the
compensation strategy of its rival Best Buy, which was working in different
business strategy.
I am pretty
confident with my findings since its rivals strategy was for different business
process. Best Buy had self-service stores where consumers directly look into
what is needed. Here less experienced sales person are useful since they have
to only guide the customers to the place where its goods were located rest its
customers can do on their own with just basic guidelines. But in case of
Circuit City, it had tradition of informing its customers about the new
products availability where experienced employees were needed.
2. Do you believe that the compensation changes at Best Buy are a major reason for its current difficulties?
No, there
is nothing to do with the change in compensation scheme with Best Buy.
They had
learnt the change in current environment in electronics gadget and people's
choice has changed. They wanted to open small outlets where it could sell only
mobile phones rather than selling all the electronics items. It showed that
mobile phones are frequently bought rather than other electronics goods. The
online competitors like Amazon and the big physical giant like Walmart had
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