F.T. Consulting FirmRadioShack Corporation Analysis

Who is F.T. Consulting Firm

Industry SWOT Analysis

Industry Benchmarks

RadioShack 1st Strategic

Orientation Marketing Plan Market Segments New Store Layout Costumer Experience

Agenda 2nd Strategic Orientation Comparison Recommendation Summary Q & A

F.T. Consulting Firm Established in 2008 “Making your future transitions possible…”

Assisted following companies: Caron Furniture A.H. Belo Corporation F.T.

Future Transitions Consulting FirmBusiness Analysis & Consulting

Strengths Ability to keep being

innovative Growth potential Investors Increased efficiency

Weaknesses Innovation

Industry SWOT Analysis Opportunities

Hispanic population (Spanish speaking)

Digital TVs & gaming Need for innovation

Threats Globalization Competition Recession

Industry Benchmarks

100%

Theoretical Construct and Dimensions Measures Chosen?

Firm Performance (computed from

data in case)

Benchmarks

External(Industry Norms)

Internal(Goals)

Operating Performance

Financial Performance

Financial Position Current Ratio 2.8 1.82 2.5

Profitability Profit Margin 4.9% (thestreet.com )

3.8% (Yahoo Finance)

4.9% profit margin

Market Performance Market Share 6.96% 10% in 5 yrs

Organizational Health Employee Growth -3.85% .98% .5%

Survey Results

17%

83%

Slogan Recall

Recall Slogan

Don't know slogan

18%

61%

18%

3%

Competitors

Fry

Best Buy

Wal-Mart

RadioShack

13%

17%

57%

13%

Consumer Wants

Atmosphere

Knowledgable Staff

Convenience

Quality Products

Potential Buyers

87%

13%

Would buy fromRadioShack

Will not buy fromRadioShack

Strategy 1RadioShack

Consistency Contract Customer

Store layout Slogan Training Marketing Plan

Product mix Company

size

Service Product demands Product Demos Spanish Website

Message: Identity of RadioShack High-quality products Superior customer service Convenient locations

RadioShack. Connecting consumers with technology.

Ad #1: Transition of RadioShack Ad #2: Going Green Customer Experience

Strategy 1 Marketing Plan

Advertising Budget

New Store Layout

Younger Generation (Pre-teens and teens) Interesting website Going Green Newest products Store layout

Middle Generation (20’s-40’s) Focus on value Convenience Demos

Market Segments Baby Boomers(50’s and above)

Customer Service Convenience Demos

What type of experience does RadioShack want to give its customers? Simplicity Superior customer service “Try before you buy” Inviting atmosphere Information

Customer Experience

RadioShack.com

AfterBefore

Strategy 2

Keep product mix

Improve Kiosks

Increase store format Increase services More employee training

Strategy 1 Pros:

Transitions RadioShack Capitalizes on Industry

forecasts Positions RadioShack in

mind of consumers Reduce affects of

recession on business

Cons: Employees need

training Financial risks

Strategy #1 vs. Strategy #2

Strategy 2 Pros:

Familiarity Managerial and

employee training improved

More services offered

Cons: Not feasible Large financial risks Competition Ignores industry

analysis Calls for expansion Minimal transitions

Recommendations Strategy 1 Recommended

Industry analysis supports strategy Feasible Easy to implement Likelihood of success

Action Plan

NPV

Positive NPV supports proposed strategy # 1

NPV

(In Millions, USD)   Initial Investment 2009 2010 2011 2012 2013

Cash Flow -305.1 170.68 175.36 180.17 185.09 190.13

(1.1285) (1.1285)^2 (1.1285)^3 (1.1285)^4 (1.1285)^5

NPV =   $289.95      

(in millions)

Risk free rate (rf) 0.14% Total Debt $ 590.60

Beta (β) 1.64 Total Equity $ 1,760.00

Expected market return (rm) 11% Total Firm Value $ 2,350.60

Discount rate (k) 12.85%

Share Price $ 11.94

Cost of Equity 17.95% Volume 1,987,300

Cost of Debt 5.06%

WACC 12.85% ROI 20.12%

Corporate Tax Rate 35.75%

Summary F.T. Consulting Firm best choice Industry remains promising The answer to Who is RadioShack? Strategic Orientations Recommendation Call to action

Q & A

Alisha Thomas, Sr. ConsultantLareal Hudson, Sr. ConsultantTrevor Hussey, Sr. ConsultantJennifer Carey, Sr. ConsultantKenneth Connally, Sr. ConsultantWhitney Fitzgerald, Sr. ConsultantJamal Abdul-Rahman, Sr. Consultant

Organization

We recommend making no changes to the organizational structure.

Product Liquidation