The Role of Labor Costs in Retail Electronics

Read the case “The Role of Labor Costs in Retail Electronics”, and answer the questions below:1. What are the differences in the cost cutting measures implemented at Best Buy and Circuit City? Do you believe that the compensation changes at Best Buy are a major reason for its current difficulties?2. Are there larger problems in the competitive landscape for Best Buy that cannot be solved by compensation strategy changes alone? When customers look to buy electronics, what options do they have other than Best Buy and why would they choose these options over Best Buy? Where do customers “test drive” the product and where do they buy it? Can compensation changes address these challenges? Explain.

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