Tweeter Etc。
TUJEETER ETG.
O n August 16, 1996, Sandy Bloomberg, founder and CEO of Tweeter etc., reflected on the recent history of his small, upscale New England retailer of consumer electronics. Tweeter had grown from a 13-store chain with $35 million in annual sales in 1991 to a 21-store chain with $82 million in annual sales in 1996. Bloomberg had always attributed part of this growth to Tweeter 's ' 'Automatic Price Protection" policy, which had been implemented in 1993. Under Automatic Price Protection (APP), Tweeter monitored local newspaper ads and automatically mailed a refund check to a consumer if an item purchased at Tweeter during the past 30 days was advertised for a lower price by a competitor. Two recent developments in the marketplace gave Bloomberg reason to reflect on APP, however. First, on May 16, 1996, Tweeter ventured outside its traditional New England base and purchased a controlling interest in Bryn Mawr Stereo, another small, high-end consumer electronics chain based in suburban Philadelphia. One year earlier, Bryn Mawr had adopted Tweeter 's "Automatic Price Protection" policy, but up to the time of Tweeter 's purchase, had failed to see any significant impact on sales. Second, on June 16,1996, Nobody Beats the Wiz ("The Wiz") opened a 50,000 square foot electronics retail outlet in suburban Boston, the second of ten outlets planned for the New England market and the first in Greater Boston. The Wiz, a nationally recognized New Jersey-based discount retailer, threatened to change the playing field in the already highly competitive New England audio and video consumer electronics market. Three years earlier, Tweeter 's introduction of APP had received national press coverage in T h e Wall Street Journal (see Exhibit 1). Now, Bryn Mawr 's seeming lack of m~ssion Harvard Business School. of
The Consumer Electronics lndustrq
The United States M a r k e t
In 1995, consumer electronics was a $30 billion industry in the United States, as measured
O n August 16, 1996, Sandy Bloomberg, founder and CEO of Tweeter etc., reflected on the recent history of his small, upscale New England retailer of consumer electronics. Tweeter had grown from a 13-store chain with $35 million in annual sales in 1991 to a 21-store chain with $82 million in annual sales in 1996. Bloomberg had always attributed part of this growth to Tweeter 's ' 'Automatic Price Protection" policy, which had been implemented in 1993. Under Automatic Price Protection (APP), Tweeter monitored local newspaper ads and automatically mailed a refund check to a consumer if an item purchased at Tweeter during the past 30 days was advertised for a lower price by a competitor. Two recent developments in the marketplace gave Bloomberg reason to reflect on APP, however. First, on May 16, 1996, Tweeter ventured outside its traditional New England base and purchased a controlling interest in Bryn Mawr Stereo, another small, high-end consumer electronics chain based in suburban Philadelphia. One year earlier, Bryn Mawr had adopted Tweeter 's "Automatic Price Protection" policy, but up to the time of Tweeter 's purchase, had failed to see any significant impact on sales. Second, on June 16,1996, Nobody Beats the Wiz ("The Wiz") opened a 50,000 square foot electronics retail outlet in suburban Boston, the second of ten outlets planned for the New England market and the first in Greater Boston. The Wiz, a nationally recognized New Jersey-based discount retailer, threatened to change the playing field in the already highly competitive New England audio and video consumer electronics market. Three years earlier, Tweeter 's introduction of APP had received national press coverage in T h e Wall Street Journal (see Exhibit 1). Now, Bryn Mawr 's seeming lack of m~ssion Harvard Business School. of
The Consumer Electronics lndustrq
The United States M a r k e t
In 1995, consumer electronics was a $30 billion industry in the United States, as measured