The Problem of CPI Company

Categories: Business Company Customer

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INTRODUCTION

CPI Corp, a St Louis-based company, provides portrait photography services to young children, individuals, and family. The company operated over 1500 studious under license agreements with retail giants Walmart, Sears, and Babies Us. CPI had a long-time history of success in the portrait industry and well known for providing inexpensive family portrait services to the customers. However, the company suddenly closed all its underperforming outlets in April 2013, which devasted 4200 employees and shocked customers. The reasons for the failure of CPI are not responding to changing technology and customer preferences in time and continuing its traditional business model when the changes such as centralized printing, in-store facilities are needed.

What were the concerns about the direction of CPI?

The customers had to wait for a long time for their photo sessions and receiving portraits.

The company's dependence on a central printing location made the deliveries of portraits to customers lengthy.

The company had to attract new customers by modernizing backdrops and traditional posing styles.

They had a vast customer base across the country, but they did not try to implement the changes and accommodate the needs and wants of the customers.

Why did CPI fail to read and respond to the changing environment in which it conducted business?

At first, CPI was a steady organization without having any changes with the evolving technology, and it turned out to be more unpredictable.

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Tactlessly, the company did not respond effectively to the concerns that the CEO made in 2006. In the meantime, the more competitors entered into the market with innovative ways, and the CPI continued to its traditional model for doing business which came about customer disappointment.

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CPI did not increase the required sources so that they can develop new technology and satisfy the desires of the customers. In fact, the company tried to cut the cost which in the long run brought about the shutdown of the CPI.

As technological trends and consumer behaviors and attitudes changed, why did CPI hold on to its own success model?

With the 60-year history of success and a huge network of convenient store locations, CPI had more confidence to survive in the portrait industry with continuing its own traditional model for doing business. The management did not realize that an organization's survival relies on customer satisfaction. CPI was more comfortable with the current status of the organization, and the management did not want to start any change which can result in some investment because the company had loan commitments of $98.5 million. Eventually, the company was not able to provide the services what was expected by the customers.

As business competitors within the industry weigh their future, how will they pay attention and adjust their business strategies in order to remain viable and avoid the CPI fate?

To remain viable and avoid CPI fate Companies should

Have to know their business first by knowing what product configuration and store facilities provide their customers with the best experience. CPI addressed concerns about wait times and in-store experience, but the management ignored these concerns which resulted in customer dissatisfaction and reduced the company's revenue.

Improve and innovate their products to address the current demands in the market. For example, In the portrait industry, Customer expectations changed towards digital photography and instant sharing of their photographs. CPI failed to improve and innovate their portrait services to fulfill customer demands in the industry. In the meantime, companies such as picture perfect, scan my photos.com started offering one hour digital and online photography services to customers that helped these companies to survive in the industry.

Increase their customer base by entering into untapped markets. To explain, Life touch expanded its portrait services to students, toddlers, families, and places of worship. On the other hand, CPI limited its services to family, and it did not attempt any strategy to increase its market.

CONCLUSION

Because of not responding in time to changing technology and customer favorites, CPI lost its market share in the portrait industry. The company did not prepare to change its business strategies when its rivals were coming with innovative ways to the industry. Eventually, CPI failed to attract new customers and keep existing clients and disappeared in the portrait industry. Companies should respond earlier to meet the current demands of customers in their respective industries to survive in the business.