Best Buy is a household name among the electronics industry. In recent years they have seen a decline in profits and are forced to close fifty stores in an attempt to restructure. In an attempt to understand the competitive forces that Best Buy must overcome and determine their strategic position in the electronic marketplace I will utilize the Porter six forces framework. Porter’s Six Forces | | SupplierPower:MODERATE to HIGH * Panasonic * Sony * Samsung * Vizio | Threat of Substitution: LOW | Threat of Entry:MODERATE to HIGH * E-commerce * Amazon * QVC | IndustryRivalry: HIGH * Wal-Mart * Sears * Radio Shack * Hhgregg * Apple | | | BuyerPower: LOW | Complements: NONE | |

Industry Rivalry
Industry rivalry is the most significant force of Porter’s six forces; the electronics retail industry ranking very high in rivalry. There are several major companies that sell predominately electronic products and several specific niche markets; hhgregg, Sears, and Radio Shack are among the major players. Unfortunately companies like Wal-Mart and Target who are considered companies outside the electronics industry and are discount retailers prove to be significant competition in an already competitive market. The ability to shop elsewhere at little or no cost contributes to the high competition. Best Buy does not offer differentiated products; their products can be purchased at all electronic stores and retail chains like Wal-Mart. Because of the lack of differentiated products the competition can wage a price battle and offer other incentives to customers who shop with them. The collapse of Circuit City and their inability to raise inventory turnover is an example of a fiercely competitive industry. The high level of competition intertwined with market and economic conditions can prove fatal to an already struggling company like Best Buy.