THE RETURN OF THE KING?
A CD-R King Case Study
HISTORY
CD-R King is a Filipino retail chain outlet founded in the early 2000s, known for selling affordable electronic products. Their wares range from gadget accessories to appliances. Its mission is to be the No. 1 media and technology provider in the Philippines. Its vision is, "to provide every Filipino with the latest technology at an affordable price." At its peak, the store has about 500 outlets scattered across the country.
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The business started as a small store on Paterno Street at Quiapo in 1997. Initially, they sold only compact disks or CDs, the preferred storage back then, thus their name. Their first branch eventually shut down. They then opened a few branches near colleges and universities- moving the brand closer to its target market.
CD-R King steadily expanded their domain. Their imports mostly came from China. They also started branding generic products with their names, effectively selling them under their brand. With their cheap and accessible products, people, especially students, acknowledged the store as the one-stop-shop for electronics.
Although business is booming for the CD-R King, several complaints are still surfacing against the electronic monarchy. CD-R King started having difficulties attending to the concerns. An example of this is their slow transaction because even when printed receipt is already customary for shops, they are still using pen and paper. By 2019, there have been lapses in the condition of the electronic store. People are starting to notice that the branches have been decreasing. With the onslaught of the pandemic, the existence of CD-R King became more shrouded to the public.
Currently, contrary to popular belief, CD-R King is still operating. From about 500 operating branches, only less than ten branches are functioning now. The rise of online business platforms, such as Lazada and Shoppee, can be considered the reason for the death of the store. Other theories also suggest that CD-R King fell off after trying to sell other things. Before the pandemic, they were selling CCTV cameras, solar panels, and even actual windmills. All of which are very far from their initial products.
Still armed with their mission and vision, CD-R King is ready to reclaim the throne, sort of. Their downfall is now their stepping stone. Since humanity is now in the era of an online and technology-based society, the company can't miss this opportunity. Their goal, for now, is to stabilize their business by gaining a steady inflow of income.
SWOT ANALYSIS
Point of View:
Bautista, Nadine (Business Analyst)
Canoza, Juan Lupe (Business Analyst)
Time Context:
2021
STATEMENT OF PROBLEM
How can they attract customers to stabilize their business and slowly regain their previous market position in the long run?
STATEMENT OF OBJECTIVE
Regaining their customer share by focusing on their online business transaction, refining their outlets in all aspects, and improving their products while still making them affordable.
AREAS OF CONSIDERATION
Internal Environment
Assets of the business have declined through the years. The organization also experienced a change in ownership. Employees were removed, customers declined, the flow of income fell off. Their social media accounts are still existing but posts were removed and their name and logo are the only things that can be seen on their Facebook page wherein it was uploaded last July 20, 2012, 9 years ago- meaning they have been inactive physically and online. CD-R King’s customer service is not idealistic, especially in this 21st century time. They have always been engaged in a traditional way of service.
External Environment
Outside the organization, the first thing that needs to be considered are the several competitors that have appeared. The online business platform where almost everyone can sell will be a huge problem. Not to mention, several run-in-the-mill electronic shop outlets also popped out everywhere.
The pandemic was a huge blow considering that CD-R King, despite them being a technology-related business, still uses manual transactions. They also rely heavily on their several scattered outlets, favoring their physical stores rather than the virtual.
Task Environment
Strengths
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Import of supplies is directly from manufacturers.
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CD-R King’s products are affordable to the mass.
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Their products are also accessible to customers of any gender.
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They are already known by the public.
Weaknesses
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Slow in attending inquiries of customers especially on emails.
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Their Social media is still there but isn’t sure if it’s still functioning/ operating.
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Slow on attending to customers concerns and suggestions
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They are known for selling low-quality goods
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They are still engaged in the traditional process of selling their products (receipts are not computerized).
Opportunities
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Taking the opportunity of opening up online platforms/ online business especially on lazada, shopee, and etc.
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Having the opportunity to collaborate with businesses in relation to electronic and technology products.
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The age of technological advancement is upon us. Electronic products will never lose their place in the market
Threats
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There’s already a number of competitors present today (they are not the only ones that sell affordable electronic products).
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They are not used in operating the business online.
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Their reputation for selling low-quality products may influence their customer inflow.
ASSUMPTION
CD R-King’s operation was unstable over the past years. The continuous decline of customers resulted in the sudden change of ownership and shut down of most of their branches. There are still some customers concerned that they haven’t been able to attend. Another reason is the rise of competitors or similar electronic shops.
Since the business is making its way to stand up again, it will progressively regain its loyal customers back along the way. It may not be soon, but progress is still progress. The business’ future is still uncertain, but they are striving to accomplish all goals.
AREAS OF CONSIDERATION
Course of Action 1
Focus on improving their online business platform.
Course of Action 2
Open their improved physical outlets at strategic locations that will ensure the inflow of customers.
Course of Action 3
Improving the quality of their products while still maintaining the concept of them being easily accessible and affordable.
ANALYSIS
Course of Action 1
Advantages
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Since online business platforms such as lazada and shopee are the current trend and norm, it will be advantageous to use this.
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After the recent pandemic, people are still anxious about going out. Online businesses will be much more favorable in this situation than physical outlets.
Disadvantages
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Low-quality goods from online shopping are frequent. With CD-R King’s reputation of selling poor products, it may affect their business.
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Online business is a very inclusive platform giving everyone a chance to become a seller. It will mean more competitors.
Course of Action 2
Advantages
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A number of individuals are already going outside the house- some of them can already visit supermalls.
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Starting now will give them an early advantage since they’re part of the first one to establish business after the pandemic.
Disadvantages
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Most customers, although eager, are still anxious to go out to buy at physical stores.
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After using it for a long time, some may favor online shopping permanently.
Course of Action 3
Advantages
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High-quality products will improve their reputation and will merit customer’s satisfaction. It will also mean they will attract new and old customers.
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Improved quality will lessen return and defect products- meaning lesser additional expenses.
Disadvantages
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Quality product improvement takes/ needs a lot of investment.
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The company will need to tank the financial difficulties in the early game until they have a steady inflow of customers since selling improved products at low prices is quite a toll.
CONCLUSION
PROFITABILITY
REGULATION/RESTRICTION
COMPETITVE ADVANTAGE
COST EFFICIENCY
TOTAL
CA1
CA2
CA3
3
2
1
3
1
2
1
2
3
3
2
1
10
7
7
Course of action no. 1 (Focusing on improving their online business platform) seems to be the most logical and economical choice where they can maximize its premise which suits their situation very well. In conclusion, based on the criteria of profitability, regulation/restrictions, competitive advantage, and cost-efficiency improving their online business platform is the best course of action