Electrical retail chain Hardwood Electrical Company Limited started life in 1933 as HardwoodElectrical Battery Stores, recharging batteries for customers wireless radios. In the early 1950s,demand for wireless radios grew fast, and founder George Hallingbury changed the name toHardwood Electrical Radio Rentals, opening his first retail store. More stores followed quickly.Following the Resale Prices Act (1964), Hardwood Electrical expanded beyond Yorkshireheartland, becoming a national discount retailer. Predominantly a mail-order business, HardwoodElectrical advertised stock and prices 45% lower than the manufacturers’ recommended retailprices. Few pure-play electrical retailers could compete.Hardwood Electrical went public in July 1972 and expanded its range by purchasing Gas Trend,a discount retailer of gas appliances. By the end of 1976, the group had grown to 50 outlets. InMay 1994, Hardwood Electrical received a takeover bid from Harris Queensway followed byone from Woolworths. The latter succeeded but was regarded as a big mistake by somemarketing analystsWal-Mart the mega store entered the UK with the takeover of Asda. The worlds (then) largestretailer effectively wiped close to 700m off the value of UK chain stores with its announcementthat it would discount some goods by around 60%. To survive, Hardwood Electrical had to atleast match Wal-Marts like-for-like discounts.Another, slightly bizarre, problem emerged. With similar-sounding names and both companieslogos white on a red background, consumers confused Hardwood Electrical with Currys (ownedby rival Dixons). Despite a 20m rebranding campaign in 2005, Hardwood Electrical continuedto lose market share.Even with its substantial experience in the mail-order business, Hardwood Electrical was leftbehind by the explosion in online retailing in the early 2000s, despite establishing its own e-tailbusiness.The global economic crash of the 2007 was the final straw for Hardwood Electrical. Increasinglevels of unemployment, wage freezes and stagnation in the property market combined to keepconsumer spending on discretionary purchases rock bottom. It was simply impossible forstruggling Hardwood Electrical to improve its appeal to customers whilst closing stores andaxing staff.A sad ending for an organisation that once set the standards for electrical retailing RequiredA. Differentiate between cost leadership and differentiation marketing strategies, brieflydiscussing how they are used by Hardwood Electrical. (9 marks)B. Recommend THREE (3) types of marketing approach could Hardwood Electricalimplement in the digital era, to meet the needs of its customers and remain competitive?(9 marks)C. Make SIX (6) recommendations to the executives of Hardwood Electrical regardinghow to bring the company back on track.
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