Even the Cars couldn't save Circuit City. The electronics retail giant is shifting from Chapter 11 to Chapter 7 bankruptcy, and as early as tomorrow will begin liquidating all 567 of its stores' merchandise and laying off over 30,000 employees.
What are the lessons for other businesspeople from Circuit City's demise? Now is a good time for me to point you toward an interview I did with Paul Carroll, author of Billion-Dollar Lessons, a guide to some of the most devastating business failures of all time and why they happened.
The most relevant lesson seems to be about a failure to change, and a harmful tendency for companies to adopt a "stay the course" mindset. Caroll cites Kodak as an example. He says Kodak failed to adequately anticipate the changes that digital photo technology would bring to its market space. One could say the same thing about Circuit City and the effect that online retail has had on the market for consumer technology. Competitors like Best Buy have found ways to be successful even in a world where online retail is growing.