You are currently browsing the monthly archive for March 2009.


Today is the last day of life for Circuit City. The bankrupt company announced it will close the last of its stores this evening. Thus ends the tragic tale of a company that in 2001 was cited in Jim Collins’ book Good to Great as one of the best-run American businesses. As with most corporate failures, the seeds of Circuit City’s destruction were sown long ago.

One of the first signs of trouble came with the decision to abandon the core business as the principal driver of growth. A determination was made by management to look elsewhere for innovation. The result was the launch of CarMax, a used-car chain. At the time, Circuit City was the largest consumer electronics company in the world. Archrival Best Buy wasted no time in exploiting the distraction, overtaking Circuit City and never looking back.

Circuit City was further distracted by the launch of DIVX. The technology platform was developed to compete with DVDs, but famously failed, costing the company over $100 million. By the time Circuit City jettisoned CarMax and exterminated DIVX, Best Buy had become the strong front-runner in the race.

Refocused on its core business, Circuit City began to explore ways to improve the store experience and revive the brand. But on March 28, 2007, the company shot itself in the foot by firing over 3,000 experienced employees to replace them with lower-priced staff.  The move famously backfired as the quality of customer service and employee morale sunk to new lows. Employees never again trusted management and consumers lost patience with the brand. The company continued to plummet, but the free fall ends today.

What lessons can we take from this brand fatality? Circuit City and Best Buy operated with similar product lines, prices and locations. But Best Buy took care of its employees, consumers and its brand – Circuit City didn’t. And the rest is history.


From Good to Great to Bankruptcy: Jim Collins’ book revisited

Learning from Circuit City’s Mistakes

Fortune Most Admired Companies

Fortune Most Admired Companies

Spend much time reading today’s headlines and you’ll get the impression that big businesses are just decaying hulks of greed and corruption. But a new article in Fortune reminds us that many corporations are not only surviving, but earning the admiration of their peers.

The list of the world’s most admired companies includes innovative consumer brands like Disney, Apple, Google and Southwest Airlines, along with respected holding companies like Berkshire Hathaway and Procter & Gamble. Skim through the top 50 and you’ll be reminded there are still leaders in this world.

Brand-builders should note there are two key qualities exhibited by most of the companies on the list: The vision to avoid the crowd and the wisdom to build long-term stability. As always, individuality and predictability are the building blocks for great brands.

The Top 20:

1    Apple
2    Berkshire Hathaway
3    Toyota Motor
4    Google
5    Johnson & Johnson
6    Procter & Gamble
7*    FedEx
7*    Southwest Airlines
9    General Electric
10    Microsoft
11    Wal-Mart Stores
12    Coca-Cola
13    Walt Disney
14    Wells Fargo
15    Goldman Sachs Group
16    McDonald’s
17    IBM
18    3M
19    Target
20    J.P. Morgan Chase