...Critical Analysis: Best Buy: Grasping at Straws By tuc70402 | November 2012 Zoom In Zoom Out Page 1 of 2 Critical Analysis: Best Buy: Grasping At Straws Best Buy Co., Inc. is an American public company that is a specialty retailer of consumer electronics in the United States, accounting for 19 percent of the market (1). Over the last fifteen years, Best Buy, like many retailers, is “competing with a perfect storm of disruptive technologies (2)”. It is hard to compete with those companies embraced with innovations, such as Apple and Amazon. Best Buy has lost $1.23 billion and 2.4% decreasing of revenue last year. In order to create a delighting customer atmosphere, Best Buy should focus on: engaging in innovations of e-commerce, training employees, and focusing on the target market. Engaging in innovations of e-commerce is the best way to differentiate with the competitors. The remaining advantages of brick-and-mortar have been systematically eroded. On the other hand, e-commerce has been increasingly popular, “through technical and business innovations that include embedded video on their sites, highly credible customer reviews and peer advice, free or subsidized overnight shipping, easy returns and extended warranties, and phone or on-page video chat for customer support”(2). If Best Buy can try to create a cheaper alternative, offering customers a faster, more convenient, and less-expensive online shopping atmosphere, perhaps Best Buy can have a dramatically...
Words: 332 - Pages: 2
...Preliminary Audit Plan for Best Buy Co., Inc. OBJECTIVES OF THE ENGAGEMENT Audit of the financial statements of Best Buy Co., Inc. for the year ended March 3rd, 2012. BUSINESS AND INDUSTRY CONDITIONS Best Buy is a multinational retailer of consumer electronics, computing and mobile phone products, entertainment products, appliances, and related services. The company operates retail stores and call centers and conducts online retail operations under a variety of brand names such as Best Buy, Best Buy Mobile, The Carphone Warehouse, Five Star, Future Shop, Geek Squad, Magnolia Audio Video, Pacific Sales, and The Phone House (Bestbuy.com, 4). The domestic segment consists of all operations within the United States, while the international segment includes all operations in Canada, Europe, Mexico, and China. During the 2012 fiscal year the domestic segment opened 135 new stores and closed five. The international segment 219 stores and closed 119 stores. Best Buy expects to see a reduction in the number of large-format stores and the square footage for those stores, and an increase in the growth of small-format Best Buy Mobile stores (Bestbuy.com, 5). The Best Buy's success is contingent on the market's demand for electronics. new products The company's strategy is to provide good customer service combined with lower prices (news.cnet.com). Best Buy's success is directly related to economic conditions, the cost of goods, and fuel prices, to name a few. The company's strategy...
Words: 2084 - Pages: 9
...ACCOUNTING BEST BUY FINAL PROJECT General Student’s Discussion and Analysis History: Best Buy Inc is a leading provider of consumer electronics. The company is a top rated Fortune 500 company and is considered to the largest specialty retailer within its sector throughout the United States. It accounts for about 21 percent of the market. Best Buy Inc also is present in the Canadian, Chinese and Mexican market places. The company was founded in 1966 and is a public company, listed on the New York Stock Exchange as BBY. The company is headquartered in Richfield, Minnesota and the founder, Richard Schulze, is still on board and is chairman for the company. This retail business is specialized in consumer electronics. In 2008, Best Buy Inc has revenue of more than 40 billion dollars with 12.7 billion in assets. The company also employs about 150,000 people (2008 numbers.) Best Buy Inc also has a number of subsidiaries. This includes its computer repair service The Geek Squad, Magnolia Audio Video and Pacific Sales. The company operates both Best Buy retail stores and Future Shop label products and stores in Canada. Best Buy Inc is an aggressive company and set out to become one of the country's best providers of consumer electronics from the beginning. The most recent announcements for plans of the company included a statement in 2007 of pushing for a 40 percent increase in its operations. The company plans to operate more than 1800 retail stores around the world. Of these...
Words: 3145 - Pages: 13
...ST. JOHN'S UNIVERSITY (NY) [pic] Best Buy Swindled Out of $31 Million Internal Control Issues Joseph Chung Professor Jay Ranade ACC 628 Internal Auditing Overview of the Case An Illinois couple allegedly swindled computer giant Best Buy Inc. out of $31 million dollars over the duration of four years (2003-2007). Russell Cole and his wife Abby was allegedly accused of masterminding a multi-million dollar online bid-rigging scheme along with former Best Buy employee Robert Paul Bossany, who pleaded himself guilty in February 2009 to 29 counts of conspiracy to commit mail fraud and money laundering. Investigators found that the Coles had reported $15.5 million dollars in income from 2003-2007, with $14.2 million suspected to be in connection with the fraud. The Chicago Tribune said that Russell Cole called his $2.75 million dollar home in Deerfield, IL "the house that Best Buy built," but was under scrutiny by investigators who claim that the money was obtained through fraud. The Coles lavish lifestyle also included owning a Ferrari coupe, a Lamborghini convertible and nine other luxury/high performance vehicles with a total worth of about $2.8 million dollars that was confiscated by authorities. The Coles' attorney told the Chicago Tribune that the Coles' "did not engage in a fraud against Best Buy...We intend, at this point, to present evidence to the contrary if they've ever charged." As for Bossany, he cooperated fully with...
Words: 3271 - Pages: 14
...December 3, 2012 Disclosure Analysis Paper Best Buy Co. Inc. is a publicly traded company. Best Buy is a multinational retailer of consumer electronics, computing and mobile phone products, entertainment products, appliances and related services. Best Buy Co operates retail stores and call centers and conduct online retail operations under a variety of brand names such as Best Buy (BestBuy.com, BestBuy.ca), Best Buy Mobile (BestBuyMobile.com), The Carphone Warehouse (CarphoneWarehouse.com), Five Star, Future Shop (FutureShop.ca), Geek Squad, Magnolia Audio Video, Pacific Sales and The Phone House (PhoneHouse.com). Best Buy Co. Inc. is a global corporation with domestic and international segments. Inventory Merchandise inventories are assigned cost of unsold units left on-hand (Kieso, Weygandt, Warfield, 2007). Merchandise inventories are recorded at the lower of cost using either the average cost or first-in first-out method, or market. In-bound freight-related costs from our vendors are included as part of the net cost of merchandise inventories. Also included in the cost of inventory are certain vendor allowances that are not a reimbursement of specific, incremental and identifiable costs to promote a vendor's products. Other costs associated with acquiring, storing and transporting merchandise inventories to Best Buy retail stores are expensed as incurred and included in cost of goods sold. Over the past three years Best Buys merchandise inventory has reduced gradually...
Words: 932 - Pages: 4
...Executive Summary Best Buy Co.,Inc. is an American multinational consumer electronics corporation, the company was founded by Richard M. Schulze and Gary Smoliak in 1966. Globally, with over 100,000 employees, Best Buy was named “Company of the year” by Forbes magazine in 2004. The company achieved its early success by using low cost strategy. As a leading company in the consumer electronic retail industry, Best Buy understands the importance of high quality customer service. The company’s lead market position is attributed to its differentiation strategy, reputable brand name, and series of acquisition. The external analysis indicates that the highest competitive force in the company is the internal rivalry and risk of new competitor to enter into the market. The performance of Best Buy and other competitors in the consumer electronic retail industry really depends on macro environmental factors. The biggest threat that most industries in the global market are facing, is the threat caused by the current economic situation. The internal analysis indicates that strength of the company is their reputable brand name, size, and market presence. Best Buy built its reputation by offering consumer high quality service and new shopping experience. The company expands its business into different market through series of acquisition. The company’s biggest weakness is that company have too much long term debt , which could damage investor’s trust on the company’s performance. ...
Words: 2302 - Pages: 10
...THE EMERGENCE OF TECHNOLOGY AND ITS ADVANTAGE TO BEST BUY COMPANY INC. Course project on; Managerial applications of information technology -IS535 Devry University, Keller graduate school of management. June 2013 Table of Contents Abstract Company Background Discussion of Business problem High Level Solution Approach Business and Technical Approach Benefits of Solving the Problem Conclusion and Recommendations References THE EMERGENCE OF TECHNOLOGY AND ITS ADVANTAGE TO BEST BUY COMPANY INC Abstract Many companies have been struggling recently due to the shift and the constant increase of online marketing and sales. The internet has created an entire new market. This has posed serious problems to Best Buy company Inc., as it profit and revenue seems to be on the down turn .In 2013 fiscal second quarter, Domestic comparable stores sales saw a 1.6 percent...
Words: 2940 - Pages: 12
...Warranty) Case I feel of the three approaches to accounting for the extended warranty, approach Deferral of Revenue is best. My reasoning for this is because it allows you to view and potentially process the total transaction into two separate transactions making it easier to track and account for. This approach also gives you the potential to resell the warranty contracts to a third party provider if you find that the program is not profitable or does not conform to the way you want to handle operations of the extended warranty. I would account for and process each sale as one, the product being a separate transaction and two, sale of the extended warranty as another transaction. Any given sale could differ from another given sale in that maybe “customer A” buys a product and an extended warranty and “customer B” only buys the product. How do you account for different transactions of the same product? I propose you do this by viewing and accounting them as two separate and individual transactions. As the case states the revenue is not fully complete because services rendered have not been earned until the extended warranty period is complete. You can still earn interest on the money by putting it into a separate account maybe something like an escrow account and tracking it that way until the contract is complete and you can enter the remaining portion as net profit. By accepting this approach of accounting you can also adjust any numbers that may fall short...
Words: 347 - Pages: 2
...BestBuy Case Study TROYFONTAINE MACON: M6marketing [2011] [Best Buy is considering reducing their current store sizes, and changing their operational infrastructure. This is a good idea, and a typical retrenchment strategy, but I believe there to be better alternatives. Executive Summary According to multiple media sources, Best Buy is considering reducing their current store sizes by 10%, and changing their operational infrastructure. This is a good idea, and a typical retrenchment strategy, but I believe there to be better alternatives. Implementing Subway restaurants inside of Best Buy‟s instead of reducing the size of Best Buy stores by 10% may have the same financial underlining but not the same market impact. Subway is a restaurant chain that has (1) Brand Recognition (2) Good Public Image “healthy”, “fresh”, “Inexpensive” (3) Strong Independent Advertising Campaigns (4) Profitability within a Growing Industry. Subway restaurants promote and advertise timely events such as movies, athletic events, months, holidays, etc. to go along with Subway‟s existing promotional deals such as the “$5 Footlong” sandwich deals. Subway creates daily incentives for customers and provides a multitude of product offerings that allow Subway not to get stagnant or predictable to consumers. “Take your pick; eat a sandwich on a budget and lay out $5 for a 12‟inch submarine, or eat a fresh, healthy one to train like Michael Phelps, lose tons of weight like Jared Fogle (Subway spokesman)...
Words: 6499 - Pages: 26
...Best Buy Competitor: hhgregg Executive Summary Company Best Buy (“BBY”, or the “Company”) specializes in consumer electronics. They are one of the largest specialty retailers operating as an e-commerce and physical retailer across the United States, Europe, Canada, and China. BBY stores offer video products, including televisions, e-readers, navigation devices, digital cameras, digital camcorders, DVD and Blu-ray players. The Company also offers audio products, such as MP3 players and accessories, home theater audio systems and components, musical instruments, and automobile electronics like car stereos and satellite radios. Each store also carries a variety of computing and mobile phone products, such as notebook and desktop computers, tablets, monitors, and mobile phones, together with the related subscription service commissions, hard drives and other storage devices. BBY outfits offices with the necessary networking equipment, office supplies and printers. The Company also caters to a recreational market with their various entertainment products, including video gaming hardware and software, DVDs, Blu-rays, CDs, digital downloads, and computer software. BBY provides customers with services in addition to merchandise; the Company offers delivery and installation services for home theaters and mobile audio and appliances, service contracts, extended warranties, product repair, and even offers snacks and beverages. BBY operates retail stores and call centers, as...
Words: 5602 - Pages: 23
...Critical Analysis: Best Buy When Best Buy first opened it was an event that an electronics store could hold such a variety of products, have knowledgeable employees, and offer competitive prices at the same time. Although in 2012 it was reported that revenues for Best Buy increased, the company still fell victim to the problems of having a decrease in net income and operating cash flow. “The company reported revenues of (U.S. Dollars) USD 50,705.00 million during the fiscal year ended March 2012, an increase of 1.93% over 2011. The operating profit of the company was USD 1,085.00 million during the fiscal year 2012, a decrease of 54.30% from 2011. The net loss of the company was USD 1,231.00 million during the fiscal year 2012, as against a net profit of USD 1,277.00 million during 2011 (Strategic Analysis 1).” It is obvious by these numbers that Best Buy, a company that has been historically successful, has been running into some recent troubles. In this report I will identify all of the potential reasons for Best Buy’s recent poor performance, as well as offer my opinion for the primary reasons for Best Buy’s recent sub-par performance. As a company, Best Buy can be held at fault for some of its performance struggles purely from an internal point of view. Best Buy is categorized as the “leading global electronics and appliance specialist retailer (Passport 4).” They have obtained such success from their warehouse type stores, with specific services offered inside (Geek...
Words: 1202 - Pages: 5
...structures may come in all shapes and sizes. Best Buy Co. is a great example of a large business that has a solid organizational structure and it shows how being organized can take your small mom and pop type business and grow it into the retail giant it is today. When you first examine the organizational structure of Best Buy Co. it can be a bit confusing. Though the company is one big organization, it has many smaller sub organizations, for example Geek Squad and Best Buy Mobile. Though they are one company Geek Squad offers computer repairs as well as computer and home theater installations and trouble shoots, and Best Buy Mobile offers cell phones, while Best Buy as a store sells electronics. The Best Buy Co. organizational structure appears to be a hybrid of a functional and a divisional structure. The store is setup with different departments and each department has a lead or a supervisor that is in charge of meeting sales and financial goals. Above the department supervisors, there is a sales manager and then a general manager that is in charge of everything and everyone in that retail location. That is the part that is more of a functional structure. The divisional structure comes in the separate sub organizations. Best Buy Mobile, though it is in the same retail location most of the time, has its own separate budgets, and sales goals, its own payroll allocation and manager, making Best Buy Mobile a separate entity within the store (Best Buy Co. , 2011). With a functional structure...
Words: 1047 - Pages: 5
...BEST BUY [pic] [pic] Making Life Fun & Easy! [pic] Tiago Alves Andrew Bornstein Mae Brana Grace Tan Meredith Walters Table of Contents Business Summary 2 Vision Statement & Corporate Values 2 Rankings 2 Market Share 3 Stock Chart – 5 Year Performance 3 Financial Highlights 4 History 5 Key Executives 6 Strategy 7 Customer Centricity 7 Value-added Services Business 9 Supply Chain and IT Systems 9 New Store Openings 10 Mergers & Acquisitions 10 Employees 11 Key Competitors 12 5-Year Performance vs Key Competitors 13 Appendix 14 Business Summary Best Buy is a specialty retailer of consumer electronics, home-office products, entertainment software, appliances and related services in a superstore format. It operates retail stores and commercial Web sites in the U.S., Canada and China, under the brand names Best Buy (BestBuy.com and BestBuyCanada.ca), Future Shop (FutureShop.ca), Magnolia Audio Video (MagnoliaAV.com) and Geek Squad (GeekSquad.com and GeekSquad.ca). As of Feb 25 2006, Best Buy operated 742 Best Buy stores, 20 Magnolia Audio Video stores and 12 Geek Squad stores in the U.S.; and 118 Future Shop stores, 44 Best Buy stores and five Geek Squad stores in Canada. Best Buy operates two reportable segments: Domestic and International. The Domestic segment is comprised of all U.S. store and online operations, including Best Buy, Magnolia Audio Video and Geek Squad....
Words: 23684 - Pages: 95
...12 BEST BUY CO. INC.: SUSTAINABLE CUSTOMER CENTRICITY MODEL? 12 BEST BUY CO. INC.: SUSTAINABLE CUSTOMER CENTRICITY MODEL? CASE # 3 Best Buy Co. Inc.: Sustainable Customer Centricity Model? MGT403 Strategic Management Prepared for Tanvir H DeWan Coordinator of College of Business IUBAT Prepared by Serial Number | Name | ID | 01 | Shahriar Rawshon (Group Leader) | 09102095 | 02 | Md. Zakiruzzaman | 09102151 | 03 | Suchona Akter Swarna | 09102163 | 04 | Shahara Akter Eva | 09102156 | 05 | Kanij Fatama | 09102165 | 06 | Ruksana Aktar | 09102130 | 07 | Md. Al Amin | 09302012 | Section: B International University of Business Agriculture and Technology Date of Submission: 29th May, 2012 Current Situation: Best Buy was a specialty retailer of consumer electronics. It operated over 1,100 stores in the United States, accounting for 19% of the market. With approximately 155,000 employees, it also operated over 2,800 stores in Canada, Mexico, China, and Turkey. The company’s subsidiaries included Geek Squad, Magnolia Audio Video, and Pacific Sales. In Canada, Best Buy operated under both the Best Buy and Future Shop labels. From a strategic standpoint, Best Buy moved from being a discount retailer (a low price strategy) to a service-oriented firm that relied on a differentiation strategy. In 1989, Best Buy changed the compensation structure for sales associates from commission-based to non- commissioned-based, which resulted in consumers...
Words: 3311 - Pages: 14
...Failure Analysis/Change Strategy Learning Team A LDR/531 Organizational Leadership October 21, 2014 Dr. Nancy Atkins Failure and Change Strategy for a Business Circuit City was one of the top selling electronic retailers in the United States. The company was based out of Richmond, Virginia started by Samuel S. Wurtzel in 1949. Some say bad real estate deals, lack of focus on being the low cost seller, mistakes with its sales force and straying from its core led to their demise in 2009. The success of Amazon has much to do with Jeff Bezos, the founder and Chief Executive Officer (CEO). His unique combination of character traits and business strategy has driven Amazon to the top of the online retail world. In 2011, Amazon.com was posting revenues of nearly $50 billion per year (Price III, 2013). Part 1: Business Failure/Success Analysis Circuit City Objective (Carolyn Whitaker) Circuit City is dedicated to the highest quality of customer service which is done with the highest respect. With a highly praised customer service and satisfaction, it will improve our sales performance. For Circuit City to effectively sell products to customers, sales representatives will try to understand and fulfil the customers’ needs. With a highly trained team of associates, Circuit City will be successful in the long run. Circuit City Vision/Mission Statement (Carolyn Whitaker) Respect - “Our Associates are our greatest assets. We expect every Associate to demonstrate that they...
Words: 2215 - Pages: 9
