...Best Buy Inc. – Dual Branding in China Summary When Best Buy decided to go beyond the domestic market in the United States in December of 2000, the company had found Canada to be the logical first step. The Canadian CE market was fragmented, having only one dominant player which was Future Shop. Best Buy’s original objective was to set up its own stores in various Canadian cities to compete directly with Future Shop stores. Its plan was to open several stores in the Toronto area in 2003, then begin its three-year expansion program that would launch about fifteen stores in Canada. In August of 2001 the founders of the two companies met and decided over the course of three weeks that they could accomplish more together than they would if they stayed in competition with one another. By January 2002, Best Buy had acquired 100% ownership in Future Shop. When the time came to finalize the integration, the management of Best Buy decided to retain the Future Shop brand and let it compete with Best Buy as an independent brand which was a strategy that had no precedent within the company. The dual-brand strategy was an initiative being tested for the first time by Best Buy. Best Buy had plans to expand into China over time. Problem/Suggested solutions In examining prospects of the dual-branding strategy in China, Noble had to make a call on whether it would serve as well in China as it did in Canada. He had to define the road map for implementing the strategy in China. In a broader...
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...customers, which is very efficient. Another move I’d like to talk about Sears is the change of target consumer. In the mid-twenties, Sears switched its target focus from “only the farmer” to “both the farmer and city population”. The reason is that the low-income groups desired to buy the same goods as the middle and upper class. The country was becoming one big homogeneous market. And Sears noticed the trend and was aware of the consumer shopping habits, so they made changes accordingly. This strategy made me think of Starbucks in China. The consumer of Starbucks in America is almost for everyone, but in China, the target consumer is mostly for the wealthy upper and middle class. College students won’t pay 30 yuan for a cup of coffee because they can buy 6 bottles of CocaCola instead. Starbucks was really smart when they decided their target consumer in China. Since coffee is still not a common drink for Chinese, carrying a cup of expensive Starbucks is seen as a symbol of success or some little personal luxury for the middle class. Starbucks premium pricing strategy fits the market demand very well because the middle class and affluent consumers are growing, which means the market of Starbucks in China will be huge in...
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...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...
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...due to the reform era lead by Deng Xiaoping. During the early 1980’s FDI was restricted to a small number of markets in certain regions. FDI policies evolved with time in the mid 1990’s and in the millennium, government policies relaxed and unified with domestic companies. Foreign companies are enticed into the Chinese market by its rising gross domestic product (GDP), favorable foreign exchange regulations, licensing requirements, tariffs, and taxes (Hale & Long, 2012, p. 2) Many U.S born businesses hop on the bandwagon in globalizing in economically stable countries. Hamlin & Li (2010) stated, “In 2010, China surpassed Japan and became the second- largest economy in the world “(as cited in Gio, 2013, p. 174). Torres (2011) further states, “China is projected to surpass the U.S economy and become the largest economy by 2030” (as cited in Gio, 2013, p. 174). China has many motives for foreign investors to tap into its markets, and with the prediction of surpassing the United States only further entices...
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...Best Buy is no longer the all-powerful super store that it has been known as the past couple of decades. With today’s rapid increase in e-commerce, it makes it hard for “big-box” stores such as Best Buy to cope with the changing customer preferences. As a result, Best Buy’s 2011 financial performance fell subpar, with a 2.4% revenue decrease, and an overall loss of $1.23 billion. In response to this financial loss, the store is going to close 50 stores and fire 400 corporate staff members (Savitz). This report will provide a detailed internal and external analysis of Best Buy’s operations that have resulted in the company’s current market position. Best Buy’s previous strategy of relying on “big box” stores is being replaced by a new strategy of a higher number of smaller stores. Best Buy plans to open 100 new small stores to replace the 50 big stores that they are closing. Best Buy realized that the big stores were starting to be used for “showrooming”. This allowed consumers to come into the stores and experience the products, only to go online and purchase the product cheaper. In 2011, over 15% of volume sales were taken by internet retailing (Euromonitor). On top of the slipping sales, the expenses of the “big box” stores are not something to be forgotten. Best Buy believes that by 2015 $800 million will be saved by closing the larger stores. Also, the smaller stores will allow for more customer interaction, which Best Buy learned is one of the main reasons the “big box”...
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...1.0 Executive Summary 1 1.1 Section I. 2 1.2 A) Company History 2 1.3 Strategies and Tactics used by Best Buy 3 1.4 B) Mission Statement (implied).……….……………………...……………………………………...4 1.5 Analysis of the Mission 4 1.6 C) Objectives 5 1.7 Analysis of the Objectives 5 2.0 Section II …………………...……………………..…………………………………….……………6 2.1 Financial Analysis...………………………………………………………………….…..…………...6 2.2 A) Ratio Analysis………..…………………………………………………………………………...6 2.3 B) Evaluation of the Income and Balance Sheet…………………………………..........................…6 3.0 Section III …………………….………………………………………………………………………7 3.1 A) Strenghts.………………………………………………………………………………….……….7 3.2 B) Weaknesses…..……………………………………………………………………….……………7 4.0 Section IV…………………………………………………………………………………………......8 4.1 C) Opportunities………………………………………………………………………………………8 4.2 D) Threats 8 5.0 Section V 9 5.1 A)Strategic concern 9 6.0 SectionVI…………………………………………………………………………………………….10 6.1 Salient Strategic Concern…………………………………………………………………………….10 7.0 SectionVII……………………………………………………………………………………………11 7.1 Strategic Alternatives…………………..……………………………………………………….……11 8.0 Section VIII……………….………………………………………………………….………………12 8.1 Recommendation 12 9.0 Section IX 13 9.1 A)Implementation Plan 13 9.2 B)Time lines 13 9.3 C)Budget 13 9.4 Evaluation and Control 14 10.0 Section X……………………………………………………………………………………………15 10.1 Bibliography…………………...…………………………………………………………………...15 10.2 Appendices…………………….……………………………………………………………………16 Table: Balance...
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...Case study on Best Buy Submitted to; Mr David Valdes Submitted by; Ouvais Aslam ub 30110356 Naveed Waqas 2014 Executive summary Best buy is one of the leading electronics retail store in USA. It has made multiple attempts to enter in international arena. It had been successful in a few countries but a failure was waiting in the European market. Best buy entered UK by a joint venture with carphone warehouse. Initially company had planned to open up more than 200 stores but due to unsatisfactory performance it had to roll back the 11 launched stores. Along with many small reasons the major causes for this failure seem to be poor choice of country, underestimating the competition in the market, blunders in the location of stores and failing to recognize the changing behavior of the target consumers. The trends in electronic retail are changing all around the world. People now go for online purchasing, so the whole structure of stores should be reviewed. A complete analysis of country should be made before targeting it. The competitive forces should be analyszed properly. Many data and marketing companies provide consumer and competitor behavior details, these services should be applied every time a new big international investment is made. Best buy a case study Best Buy Inc. is an American multinational and multibillion retailer that deals with the consumer electronics. The headquarter...
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...Should Chinese Men Buy a House? Mr. Zou, who did not get married until he bought a house when he was 35 years old, sold his house last year and earned an extra profit about 200,000 RMB. In China, much more men did not get married because they did not own a house; however, housing price keeps soaring. According to National Bureau of Statistics of China, from 2001 to 2011, during the 10 years, the average selling price of commercialized buildings in China has increased 147% from 2170RMB to 5357RMB per square meter, especially in metropolitan cities like Beijing, Shanghai which increased 243% and 310% respectively. Nowadays, most youth and their parents in China are concerned about the price of apartment and hesitate to buy it; however, during the hesitation, the price has reached a high record. In my opinion, Chinese men should not only buy a house but purchase it as soon as possible because of the impact of traditional custom, fierce marriage market and the best investment strategy. To begin with, if people especially men want to get married; they would better possess a house at first because of the traditional customs. Confucius, who was born in 2500 years ago, was a philosopher of the Spring and Autumn period of Chinese history. The philosophy of Confucius has a great, deep and persistent impact on each generation in China until now. One of his most famous proverbs is “to rightly govern the state, it is necessary first to regulate one's own family” (Dawson, 1915) which...
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...A STRATEGIC BUSINESS PLAN FOR CHINA TELECOM Prepared June 11, 2008 for Dr. Kevin Qing Hua Dong Lu 17, Hai Dian District, Bei Jing, China, 100237 Dr. Kevin Basic idea: Making a great profit after the new company set up and also have a forecast for our company; this plan is a program for doing this in CAU, China. Prepared by Wu Lei Alexander 0614810342 Wang Yang Ocean 0614810221 Liu xiao tian 0614810193 Deng Yu ning Jill 0614810292 Phone number: 010-8345287 010-8345288 EXECUTIVE SUMMARY The method we used to analyze the new china telecom is much traditional method. We will use SWOT and PEST to show the most important information about the company. This has made planning easier and more profitable. 1. Our situation Our company is combined with old CHINA TELECOM and CHINA NETCOM’s CDMA net system. It has another two companies in china will have the right to get the license for 3G service. Market opportunities - We have the most telephone customer (not mobile phone customer) and CDMA net system have the advantage for upgrade 3G system. 2.Weapon resources Our advantageous positions are tow main parts; One is we have we new kind of high-technology that is differ from the old kind of the 3G net service And the technology is our patented product .The orther is our high quality service,we deeply believe that the customer is the god and their require...
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...Best Buy Case Write-up | | Best Buy Case Write-up | | I. Company Problems Best Buy is experiencing several difficulties that have arisen due to problems within the internal and external environment that Best Buy is operating in. The largest problem, as we see it, is that Best Buy has failed to adapt to the current age of retail. Currently consumers have seem to have a preference to buying electronics online (Amazon), directly from the manufacturer (as in Apples case), or from a more convenient location where other products can be purchased (Walmart). Although Best Buy does have an online store it simply cannot compete with the powerhouse of Amazon. Amazon has a firm grip on online retail that Best Buy is not likely to make a dent in. Best Buy simply cannot undercut Amazon. Aside from not adapting to the current market place, Best Buy has problems elsewhere. Best Buy has made crucial mistakes in its overseas ventures that have turned some of their international stores into business disasters. In order to compete in an international market Best Buy needs to do better research regarding the demands of consumers in EACH international market they enter to avoid more embarrassing situations such as what happened in Turkey and China. II. General Environment Threats/ Opportunities Some opportunities in the general environment that Best Buy has is the opportunity to successfully integrate into the Asian and European markets...
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...STRATEGIC MANAGEMENT Assignment 1: Best Buy Brooke Martin Date: Executive Summary (5%) Best Buy is a multinational retailer of technology, electronic and entertainment products and services, with locations in the US, Canada, Mexico, China and Europe. Best Buy operates roughly 4,000 stores in Canada, US, Mexico, China and Turkey, and they represent about 19% of the market. Best Buy as a company has expanded from what was a small retail operation to include many subsidiaries including Geek Squad, Magnolia Audio Video, Pacific Sales and Future Shop. Best Buy needs to be aware of their competition not only in terms of other large retail electronic stores, but their competition now also includes such big box stores as Walmart and on-line retailers such as Amazon.com. Best Buy has a few major challenges that they must be aware of, and continue to improve upon. Firstly, with the downturn of the economy and the consumer cut backs on spending, they must deal with consumers spending less on the products that Best Buy offers. They must focus on differentiating themselves from both physical and online retailers. This is where their customer commitment is vital to their success. Secondly, Best Buy must continue to place a large focus on their customer service, and the knowledge of their staff. Even if customers aren’t buying new products, they continue to have previously purchased products that will need to be serviced. Best Buy needs to offer a unique “shopping experience”...
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...Unit 6 Assignment 2 Capella University 3/28/2013 Nasir Khan Best Buy Company Analysis | Best Buy Co., Inc. is a multinational retailer, which provides consumer electronics, home office products, entertainment products, appliances and related services. The company operates through two business segments: Domestic and International. The Domestic segment is comprised of the operations in all states, districts and territories of the U.S., operating under various brand names, including but not limited to, Best Buy, Best Buy Mobile, Geek Squad, Magnolia Audio Video, and Pacific Sales. The International segment is comprised of all operations outside the U.S. and its territories, which includes Canada, Europe, China, Mexico and Turkey. The company also markets its products under the brand names: Best Buy, Audio visions, Best Buy Mobile, The Carphone Warehouse, Five Star, Future Shop, Geek Squad, Magnolia Audio Video, Napster, Pacific Sales and The Phone House. The company changed its name from Sound of Music, Inc. to Best Buy Co., Inc. in 1983. Best Buy was founded by Richard M. Schulze in 1966 and is headquartered in Richfield, MN (BestBuy.com). Through its different brands, Best Buy has offerings in 6 different revenue categories: consumer electronics, home office, entertainment software, appliances, services, and other. Best Buy is considered a Oligopoly. A market where a very few large sellers dominate an industry and they each know how the other will react to changes...
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...In the case of Best Buy Inc.-Dual Branding in China, a strategy is explored as to how the existing consumer giant will potentially coexist with a company that it also will own in a new market. Best Buy was founded by Richard Schultz in 1966, which at the time was called the Sound of Music, specializing in the sale of retail audio components. Upon further expanding, the company departmentalized the categories of devices, connections and content which aided the growth of the sales of digital products to an increasing demand by consumers. Best Buy had tremendous growth rates year over year, at an average 17.5% yearly. By 2006, profits were at $30.9 Billion and ownership of 20% of the US market share of consumer electronic sales. Best Buy moved its headquarters to Minneapolis, MN where it fostered a median between technology and consumers and its goal of educating the consumer in a new digital age. The target customer for Best Buy were identified as being males between the ages of 15-39, educated and maintained a good standing financial situation. As the company grew, leaders created Standard Operating Platform that identified the highest revenue generator, customer segmentation, positioned stores to meet needs of consumers and empowered sales associates to continue to drive customers into the stores. In the early 2000’s the company had explored entering the international market and further expanded northward to Canada, where it would acquire a top Canadian CE retailer...
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...ADMIN 404 STRATEGIC MANAGEMENT Assignment one Best Buy Co. Inc : Sustainable Customer Centricity Model? Executive Summary Best Buy is a multinational retailer of consumer electronics. It operates as a retail store and online operations under several brand names in multiple countries, USA, Canada, Mexico, China and Europe. In Canada it operates under Future shop and Best buy names, offering in five revenue categories: Consumer electronics, Computing and Mobile phones, Entertainment, Services and other. Best buy’s mission is to become the leading multi-channel retailer by serving their customers and making a meaningful difference in their lives. Introduction and company overview Incorporated in Minnesota USA in 1966 as Sound of Music, Inc., Best Buy today is a multi-national, multi-channel retailer of technology products, including tablets, computers, televisions, mobile phones, large and small appliances, digital imaging and related accessories. It employs approximately 140,000 full-time, part-time and seasonal employees worldwide, it offers to its employees company-paid, full benefits that vary from location to location. Best buy’s success relies on the design and execution of appropriate business strategies. Best buy’s current strategy includes transformational change to many areas of business including online and in-store customer experience, employee-engagement, partnership with vendors and cost control, these strategies were adopted since 2012 as a result...
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...Is Best Buy the Best? Is Best Buy the Best? Best Buy is one of the leading retailers in electronics and electronic services. With the growing popularity of online shopping, some retail stores are experiencing less physical business and more e-commerce. Best Buy has adapted to this trend and is still able to maintain many stores throughout the nation. The company simultaneously provides an easily navigated website to reach all of its client preferences. To maintain a structure as this, a company must have superior management and functionality. There are four basic fundamentals that encompass the management of a successful business such as Best Buy. The traditional functions are planning, organizing, leading, and controlling. These functions are affected by several external and internal factors such as globalization, technology, innovation, diversity, and ethics. Five Common Factors In 2010, Best Buy separated itself as a company into three divisions; the Americas, Asia and Europe. Each division was created with an executive vice-president running each area who would report to the Chief Executive Officer (Ernst & Young Global Limited). When the company planned this out, it created a self-paced region instead of the entire company proceeding as a whole. In other words, Asia can progress at a different pace then the Americas in all aspects. This plan enabled all regions and the Chief Executive Officer (CEO) to use their brains and ideas from clients to develop more efficient...
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