Innovation in a Reinvented World: 10 Essential Elements to Succeed in the New World of Business

Industry Snapshot: Retail—Circuit City Stores, Inc.

Founded by Samuel S. Wurtzel as a television store in 1949, Circuit City Stores was incredibly successful in the 1980s and 1990s by pioneering the concept of the electronics superstore that offered a broad variety of products in a cavernous setting. Poor leadership, basic inventory management, and bad customer service contributed to the demise of a one-time retail giant that filed for bankruptcy in November 2008 and closed its doors shortly thereafter.

Ultimately, the company waited too long to reinvent itself and then attempted to do so in the midst of the Great Recession.

Complacency and slow response. In the face of fast-moving retail changes and a downturn in the economy, Circuit City's disjointed actions began a snowball effect that the company never recovered from, after losing its crown as No. 1 American consumer electronics chain to Best Buy in the 1990s.

Spin-off of CarMax. The company let many of its best and most experienced people go at a time when their skills were most needed.

Failed to secure prime real estate early on. Consumers were tempted to check out competitor Wal-Mart since both were located in out-of-the-way locations.

Poorly executed CEO's turnaround plan. The skill sets needed for such an aggressive turnaround were either missing or not leveraged.

Slow response to Best Buy's purchase of Geek Squad. Circuit City's installation business, called Firedog, a high-margin service that generated $300 million in ...