...Best Buy BAD 318 Mher Kandoyan 1. Comment on Best Buy’s customer-centric strategy. Is this a viable approach for breaking out of the commodity status associated with electronics retailing? Becoming customer-centric means looking at an enterprise from the outside-in rather than the inside-out. That is, through the lens of the customer rather than the producer. It's about understanding what problems customers face in their lives and then providing mutually advantageous solutions. It's the approach Best Buy took and it's a key reason why the company has survived in the tumultuous consumer-electronics marketplace, while Circuit City is gone. Best Buy took the time to understand who its customers are and what they need and then started selling solutions instead of products. As part of its research, for example, Best Buy discovered that 55 percent of its customers were women, and that for the most part they loathed their shopping experience at the retailer. Men look for a specific product at a discount price. Women want not just a digital camera, but a printer, cable, and other accessories--and they care far more about these things than price. Equally important, they want help with installation, while most men prefer to try to put things together themselves. Accordingly, Best Buy adopted mostly common-sense solutions once it understood the issues involved. Related products were bundled together. In many stores, kids now have special play areas while...
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...Competitive Strategy Best Buy Best Buy Group D9 THEME: How Best Buy has maintained and enhanced its Competitive Advantage over the years by constantly seeking a favorable competitive position in the Consumer Electronics retailing industry 1 Table of Contents Contents Objective of the report Executive Summary Part I – Early beginnings & Hyper-growth Part II – Initiating Change at Best Buy -- Recognizing the need for change -- First attempt at change (formulating the Standard Operating Platform) -- Head-Heart-Hands approach to change management (Overcoming Cognitive Inertia) -- Institutionalizing the Change Management Process (Overcoming Action Inertia) -- Impact of the SOP on the Best Buy's operations Part III - Revisiting the Drawing Board -- Building new skill sets -- Formulating Customer Centricity (deploying a new game strategy) -- Implementing Customer Centricity (reconfiguring the value chain) -- Reaping the gains from Customer Centricity Part IV – Staving off Competition: Click & Mortar model -- Industry going through a phase of Intermediating Change -- Where does Best Buy go from here? -- Experimenting may payoff but need to commit References used Page no 2 3 4-5 5-9 5 6 6-7 7-8 8-9 9-12 9-10 10-11 11 12 13-14 13 13 13-14 15 1 Objective of Report Best Buy Co., Inc has been a leading player in the Electronics & Appliances retailing industry for several years now. It has withstood several cycles of churn in the Industry; seen many of its competitors...
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...Executive Summary Currently Best Buy maintains the distinction of being the largest big box electronic retailer in the United States. The company has a top-ranked internet retail website and the number one customer loyalty program of its kind. Best Buy has more than 1 billion visitors to their websites and 600 million visits to their stores each year. Although this would seem to carry a significant market advantage, consumer purchasing practices has evolved from a direct contact, feel and touch experience to a remote, internet based method of research and shopping. The Consumer Electronics market has seen a steady decrease in revenue over the last three years. It has only been maintained in the margins by Smartphone and Tablet sales. The shrinking market and loss of market share to online retailers such as Amazon has taken its toll on Best Buy’s bottom line. Best Buy hopes to change this by making their sales associates and Geek Squad agents the authority on consumer electronics, delivering unbiased, knowledgeable advice hundreds of millions of times a year and offering unmatched support for the lifetime of the products they sell. These are all portions of Best Buy’s efforts to Renew Blue. This marketing plan also recommends two additional opportunities to increase market share. Developing an All in One system that allows Best Buy customers to receive system integration similar to Apple products for any product purchased from Best Buy, regardless of manufacturer. Additionally...
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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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...Fortune 500 Companies Nose-Dive in the Chinese Market Candice Tabb International Business MGMT 338 5 December 2014 Duane A. Beaudoin Abstract Fortune 500 companies Home Depot, BestBuy, and Mantel have all failed in the Chinese market. External forces such as competitors and sociocultural effect the companies’ ability to overturn a profit resulting in a complete withdraw. The ideal profitability of China’s market has shown resistance to standardized companies. The unwillingness to adapt and conform to consumers and the lack of preparation on all three companies serves as a lessons learned and displays the true setback of standardizing a product vs. adapt or formulate a new. Fortune 500 Companies Nose-Dive in the Chinese Market China’s Foreign Direct Investment (FDI) and its economy have changed dramatically since the 1980’s. Revolution was widely 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...
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... Matt Bridges Re: Case #4: Best Buy Inc., Dual Branding in China Date: December 2, 2013 The Situation: The situation presented was Best Buy Inc., the number one retailer of consumer electronics (CE) in the United States, had acquired ownership in the Chinese company Five Star, the third largest CE chain retailer in China. The problem occurring from this ownership of Five Star was the international expansion of Best Buy and how it would be handled while expanding into China. In 2002, Best Buy had acquired 100% ownership of the largest Canadian CE chain retailer, Future Shops, in their beginnings of international expansion. Senior vice president, John Noble, was at the head of the Best Buy International and steered the company to implement a dual-brand strategy in launching Best Buy into Canada. What this means by dual-branding was that even though the two retailer were owned and operated by the same mother company, they went into a head-to-head competition as separate entities of the single companies. This was the first of this strategy that Best Buy had ever implemented and it was deemed to fail because the company was not used to this type of operation. But within the first year of full competition between the two brands, upper management had seen this tactic become very successful. In the decision of how to approach this situation there was much controversy on how this would be handled. There was always the option of Best Buy to completely absorb the Future...
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...Best Buy Corporation - S. Bensen, A. El Haddi, K. Fitzsimmons, A. Hussein, H. Marotske -- UST EMBA [1] “Best Buy Corporation: Strategic Management Analysis” S. Bensen, A. El Haddi, K. Fitzsimmons, A. Hussein, H. Marotske Strategic Management University of St Thomas, College of Business Executive MBA program, Cohort 62 Abstract Best Buy’s news coverage of the last few years has been consistently negative. The company’s performance and reputation suffered greatly. Its Earnings per Share fell by more than 200% in 2012 alone. These negative events were the result of governance problems, a changing market landscape (cloud computing, music streaming, online purchasing, online gaming, etc.) and a significant leadership turnover in a period of crisis. The company’s value stream is in a state of flux and could be said to be a master of none at this time. This paper presents strategies to deal with these problems by creating a strategic road map that will first stabilize Best Buy and eventually put it on a growth path. As a result of our analysis, we recommend that the company employs new strategies that include growing its online business by capitalizing on Geek- Squad’s expertise and exploring an internal fix-it strategy with the development of a compelling mission and vision. Finally, we recommend that BB explore the formation of an alliance with its rivals and leverage opportunities presented by new markets. 1. INTRODUCTION The purpose of this paper is to examine Best...
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...Best Buy MGT/521 - MANAGEMENT BUSINESS Description Best Buy or BBY is one of the leading developers of technology products and technology services. Best Buy is broken down into two segments; domestic and international, and works under a variety of names. In the domestic region there is Best Buy, Best Buy Mobile, Magnolia Audio Video, Pacific Sales, and Geek Squad. The international regions include; Canada, China, Mexico and Europe and use the brand names; Best Buy, Cell Shop, Best Buy Mobile, Five Star, Future Shop, Connect Pro, Geek Squad, The Carphone Warehouse, Geek Squad, and The Phone House. (Reuters, 2012) Best Buy stores currently make their money in six categories: • Consumer Electronics – Video products like TVs, DVD and Blu-ray players. Audio products like MP3 players, home theater audio systems and components, • Entertainment – Video games, DVDs, Blu-rays, CDs, and computer software, • Services – Installation from home theater and mobile audio, warranties, and repair, • Computing and Mobile Phones – Laptops, desktops, tablets, and printers, • Appliances – Major and small appliances, Other – Snacks and beverages History To understand the history of Best Buy, one would have to know the history of its founder, Richard M. Schulze. Mr. Schulze and a partner started Sound of Music, Inc. in 1966 with their first store in St. Paul, Minnesota. Four years later Schulze bought out his partner and decided to expand. His first step to expand came in 1982...
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...overall strategic decision and focus on how it will be done. These will be made by department directors and heads of departments. One way DSGi have done this is to try increase customer service. Another example for DSGi which Niall O’Keeffe, DSGi marketing director made, is the recent advertising campaign which featured Star Wars characters, R2-D2 and C-3PO, which was focused to highlight the dual branded Currys and PC World megastores, which have recently undergone a reformatting part of the strategic plan to raise the brands identity (Baker 2010). This advert is part of how DSGi intent to accomplish the overall strategic decision. Operational decisions are made to address present issues and focus on how resources are to be allocated best; they can be made quickly allowing the overall desired strategic outcome to be achieved. An example for DSGi could be where to put new stock in the shops; this will be different for each store so shop...
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...ROWE Program at Best Buy Craig Doss John Mitchell Leadership and Organizational Behavior BUS-520 8/30/2011 Abstract Previous to the implementation of the Results-Only Work Environment or ROWE for short. Best Buy had a really high turnover rate. Jennifer Janssen works in the finance department at Best Buy. She was often called to put out fires at her job that may have required her to stay late at the risk of not being able to pick up her children. She was definitely a team player and wanted to do what she could to help the company which employ’s her. However, her demanding schedule was causing havoc or her other tasks outside of work. For people like Jennifer, Best Buy created a program where you take the time you need, come in when you want. Leave or take off if needed as long as the job was done. And while there was some hesitation and apprhension when this program was first implemented. With time people have come to value this new system and retention has improved among employees. When anyone mentions where to purchase the newest electronics, most people first thought is Best Buy. It has become a consumer favorite. Over the years, Best buy has become a household name. Best Buy is a multinational retailer of technology and entertainment products and services with a commitment to growth and innovation. The Best Buy family of brands and partnerships collectively generates more than 45 billion in annul revenue and that...
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...at 7am or you can rock up at 3pm. You can work whatever hours you like … and still get paid a full-time wage. Sounds too good to be true, right? Well, it actually exists. It was a trend that was started in 2004 by Best Buy, a retail chain in the US. The organisation introduced a system in their head office of 3000 workers called ROWE – Results Only Work Environment. In essence, it meant one thing: employees were judged on their performance, not their presence. The result was a 35 per cent increase in productivity as employees started working at more convenient times and during periods when they were more energetic. Since then, ROWE – or variations of it – has been rolled out in just a few companies. It is an innovation so radical, for now at least, that the vast majority of businesses prefer to stick with what they know, the nine-to-five grind. Only the brave attempt it, and one of those that's taken the plunge in Australia has been BigCommerce, a fast-growing SME of 65 employees, specialising in online stores. Advertisement: Story continues below BigCommerce’s co-founder and co-CEO is Eddie Machaalani. I asked him why he put such an extreme version of flexibility in place. “From day one we set about creating a supreme company culture in order to attract the best talent and keep our people happy,” he said. “We wanted to create a performance-driven culture. Performance doesn't start at 9am and end at 5pm. Sometimes it starts at 10am, sometimes it ends on Saturday morning...
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...competitive intensity and therefore attractiveness of a market. These strategies affect the ability of a company to serve its customers and make a profit. A change in any of the strategies normally requires a company to re-assess the market place. Bargaining Power of Customers Is high when buyers have many choices of whom to buy from and low when the choices are few. By offering your customers high quality fresh food, they will come to your café instead of your competitors. One way to reduce buyer power is to implement Loyalty Programs. A Loyalty Program that can be implemented in the Corner Shop Cafe is to have a customer purchase card. Every time a customer makes a purchase, this card gets "stamped" and after 7 purchases of a sandwich, their 8th one is free or 50% off. Bargaining Power of Suppliers Corner Shop Cafe will want its supplier power to be low. The café should seek out and search suppliers that will offer the lowest price. Since there are many suppliers of basic commodities (e.g., flour, sugar, bread) they all will be vying for your business. A private exchange or a reverse auction could be done in order for you to get the best possible price from your suppliers. Threat of Substitute Products Ideally, you would like to be in a market where there are few substitutes for the product or service you offer. It is true that a potential customer can ultimately make their own sandwich or cup of coffee. Yet do these customers have the time and resources to...
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...Best Buy On the Brink Background Best Buy and Circuit City were the two major brick and mortar stores where consumers were able to purchase electronics. With the rising technology and E-commerce, Circuit City was not able to adapt to the changing environment and now Best Buy is on the same path as its former competitor. Best Buy had to close down fifty stores and fire over 400 employees due to its poor financial performance. Best Buy CEO Brian Dunn explained that there was no innovation by the company to adapt to the changing market on how consumers were purchasing electronics. Consumers are now price comparing with Best Buy’s products with online retailers. Online competitors of Best Buy are utilizing the new emerging technologies to help make purchasing of products convenient to the consumers. Problem Statement Best Buy is on a slow downward slope towards bankruptcy, if the company does not have any new innovation in the way it sells its products to consumers. Best Buy needs to understand how consumers are purchasing electronics and restructure how its employees are interacting with customers. Amazon is taking advantage of being an online retailer which means that Best Buy has to take advantage of their physical locations. Alternative Solutions One of the strategies Best Buy can implement is to offer a price match guarantee to the customers if they can find a lower price than Best Buy’s products then Best Buy will match the price. This strategy will attract more customers...
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...BA 3103 Section 008 4th April, 2014 Best Buy Hits Rock Bottom Best buy the specialty retailer of consumer electronics in the United States is no longer the all-powerful super store that it used to be. Over the last fifteen years Best Buy, like many retailers, is “competing with a perfect storm of disruptive technologies (Savitz 2)”; making it hard to compete with companies such as such as Apple and Amazon that are embraced with innovations. As a result, Best Buys 2012 financial performance fell subpar, with a revenue decrease of 2.4% in the brick and mortar sector and operating profit plummeting by 54.30% in 2012. The net loss of the company was $1,231.00 million for 2012, against a net profit of $1,277.00 million during 2011 (Global Data 1). Lastly, Best Buy appears to be having cash flow problems in terms of declining liquidity of $1125 million (41.28% drop) for the year 2011. 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 conduct a situational analysis of potential causes of Best Buy’s problems and identify the major causes for declining revenue, net loss and declining cash flow position. Revenues Declining Best buy’s main source of revenues is contributed from the US market (76%) out of which the traditional brick and mortar accounts for 94% of the revenues and rest is from e-commerce segment (Passport). Best buy’s report card showed declined revenue...
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...determine the structure. The company that I choose to discuss in this paper will be Best Buy. In this paper I will compare and contrast Best Buy to other compnaies structure, and also I will eveluate the company marketing, finance, human resources, and operations etc. I will also explain the company designs such as geographic, functional, customer-based, product, service, hybrid, matrix, marketing channels, and departmentalization. Best Buy Structure Best Buy was founded in 1966 by Richard M. Schulz and Gary Smoliak. The store itself started out being the name Audio Speciality store, and when the company itself expanded the company switched ober to Best Buy in 1983. Best Buy is multi business that has expanded throughout the entire world. Best Buy has designed to have maximzed the business by providing different business situations, for different individulas and different businesses. The indivudlas who help run the organizational structure are President, Vice Presidents, Board of Directors etc. Over 2000 stores and 155,000 employes Best Buy is keys and responsible to share that they are communitating like they are a smaller compsny, knowing they are a large company. Best Buy organizitional strucuture is more towards the vertical organization. The company itself has expaned, and still growing because of the company organizontal structure. The companies that I will compare with Best Buy is...
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