Radioshack
- Submitted by: fgavidia
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- Category: Other
- Date Submitted: 08/19/2010 09:22 AM
- Pages: 4
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Company
The Shack is an electronic retailer with over 6,500 locations worldwide and 35k employees, that offers an array of world renown brands as well as private brand electronic equipment.
Key Findings
After years of decreasing sales for the company and with the lagging economy forcing many businesses into bankruptcy in 2009, the former RadioShack somehow managed to have a 1.3% increase in sales year over year. Their gross profits had a slight increase as well while their net cash more than doubled from $116M in 2008 to $238.8M in 2009.
In the letter to shareholders, C.E.O. Julian C. Day begins by pointing out one of the main strategic areas of focus: the launching of the company’s new platform – The Shack, which according to Day, helped the company eliminate the consumer perception that came with the name RadioShack: that the brand was old and irrelevant.
Day also points out the company’s financial discipline, which helped the company deliver solid results, something they had not been able to achieve in recent years due to a seemingly non-existent financial strategy.
Judging by this letter to shareholders one can see that The Shack’s business strategy relies strongly on the profits generated by the mobile technology and connectivity products that they are able to offer nationwide to nearly 95 percent of the American consumers. In 2009, with the addition of T-Mobile, The Shack now offers three of the top four major cellular carriers to their customers as they continue to leverage their unchallenged distribution advantage.
Other key points for the company are discussed in their MD&A which points out their gross margin increase of 40 basis points and their decrease in SG&A expense, which was helped in part by their decrease in advertising expense, which can have negative effects in brand recognition, especially when the brand has recently changed.
Successful Strategies
With The Shack and their checkered history in operational...
The Shack is an electronic retailer with over 6,500 locations worldwide and 35k employees, that offers an array of world renown brands as well as private brand electronic equipment.
Key Findings
After years of decreasing sales for the company and with the lagging economy forcing many businesses into bankruptcy in 2009, the former RadioShack somehow managed to have a 1.3% increase in sales year over year. Their gross profits had a slight increase as well while their net cash more than doubled from $116M in 2008 to $238.8M in 2009.
In the letter to shareholders, C.E.O. Julian C. Day begins by pointing out one of the main strategic areas of focus: the launching of the company’s new platform – The Shack, which according to Day, helped the company eliminate the consumer perception that came with the name RadioShack: that the brand was old and irrelevant.
Day also points out the company’s financial discipline, which helped the company deliver solid results, something they had not been able to achieve in recent years due to a seemingly non-existent financial strategy.
Judging by this letter to shareholders one can see that The Shack’s business strategy relies strongly on the profits generated by the mobile technology and connectivity products that they are able to offer nationwide to nearly 95 percent of the American consumers. In 2009, with the addition of T-Mobile, The Shack now offers three of the top four major cellular carriers to their customers as they continue to leverage their unchallenged distribution advantage.
Other key points for the company are discussed in their MD&A which points out their gross margin increase of 40 basis points and their decrease in SG&A expense, which was helped in part by their decrease in advertising expense, which can have negative effects in brand recognition, especially when the brand has recently changed.
Successful Strategies
With The Shack and their checkered history in operational...