Businessmodel of RadioShack

Customer Segments

RadioShack has a mass market business model, with no significant differentiation between its customers. Its customer base primarily consists of individual consumers.

Value Proposition

RadioShack offers three primary value propositions: accessibility, price, and brand/status.

The company offers accessibility through its wide distribution. It operates 1,743 physical outlets across the United States. While this figure is a far cry from its previous peak of over 4,000 stores, it still makes it one of the largest electronics retailers in the country.

The company offers benefits in terms of price. A significant portion of its lineup consists of private label items. These are typically less expensive than brand-name items, offering consumers a bargain. In addition, RadioShack’s website offers many opportunities for savings. These include free shipping for all online purchases over $40, and “weekly ads” with specials such as “buy one, get one 50% off”.

The company has a high-profile brand. It was one of the very first specialty electronics chains, making it well-known and established. In addition, it was one of the top electronics retailers for many years. Despite its current status, its name still gives it an advantage in terms of shopper awareness.

Channels

RadioShack’s main channels are its collection of company-owned stores, of which there are 1,743, and its nearly 500 independent dealer locations. The firm’s outlets are primarily located in major shopping malls, strip centers, and individual storefronts. RadioShack also sells items through its website. The company promotes its offerings through that site, its social media pages, and online and TV advertising.

Customer Relationships

RadioShack’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. That said, there is a personal assistance component in the form of e-mail support through its website.

Key Activities

RadioShack’s business model entails developing and manufacturing its products for customers. The company operates eight manufacturing plants in the United States and China.

Key Partners

RadioShack’s main partners are the major retail chains and the network of independent dealers who distribute its products.

Key Resources

RadioShack’s main physical resources are its manufacturing plants, its three distribution centers that ship products to retailers and dealer outlets, and its network of service centers that repair personal computers and consumer electronics products.

Cost Structure

RadioShack has a cost-driven structure, aiming to minimize expenses through low-price value propositions. Its biggest cost driver is cost of sales, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.

Revenue Streams

RadioShack has two revenue streams:

• Product Sales - The revenues it generates from sales of its name-brand and private label products within its stores and online.
• Service Commissions – The revenue it generates from wireless service providers through commissions they pay for obtaining new customers (or upgrading existing customers).