...Summary: Best Buy Co. Inc. (NYSE: BBY) was established in 1966 and since it inception has become one of the largest specialty retailers in the United States. Best Buy is a multinational electronics and appliance retailing company, specializing in consumer electronics, household appliances, software, and home-office products. Best Buy employs nearly 170,000 people with over 1,400 locations. Strengths • Physical Stores • No. 1 electronics retailer • Knowledgeable personnel • Smart acquisitions Weaknesses • Physical stores • Reorganizations diluting customer service experience Opportunities • Growing online demand • Private Branding • Mobile broadband (phones, tablets) Threats • Intense online competition • Local discount retailers • Constrained credit availability Strengths: Physical Stores – One of Best Buy’s biggest strengths is also one of its biggest weaknesses – it’s physical stores. “Brick and mortar is where every dimension of the brand comes alive for us to see, feel, smell, touch, taste, and hear. The store does what technology cannot — allows us the full usage of our senses.” (Excerpt from the article ‘Let’s Not Forget the Store: Why Brick and Mortar Still Matter in a Multichannel World’, 2012). No. 1 Electronics Retailer – Best Buy Co, Inc. is the largest consumer electronics retailers in the US holding 20% market share in 2011 and is ranked no. 5 on Interbrands Best Retail Brands 2012. (Interbrand.com, 2012) Knowledgeable Personnel...
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...Ghoreishi Best Buy: Strategic Audit June 8, 2015 Current Performance: Best Buy’s historical advantage has always been pricing. However, now that other specialty electronics retailers have dropped out of the market with the fall of Tweeter and Circuit City, Best Buy now must compete with discount retailers such as Kmart, Wal-Mart, Target, Sam’s Club, Costco, as well as online retailers like Amazon. Consumers no longer have to go to Best Buy to purchase DVDs because buyers can get them through dozens of online sellers or stream them online via NetFlix or Amazon. You can buy a Blu-ray player or camera at a discount online. Televisions and appliances are the two products Best Buy sells that many people are less likely to purchase online because of their size and prohibitive shipping costs. If Best Buy wants to continue to be the number one seller of electronics and electronics related accessories such as games, DVD's, and electronic wiring, Best Buy needs to focus on shoring up television and appliance dominance to ensure sufficient foot traffic. Best Buy must also address the phenomenon of 'show rooming', which is the practice of shopping for merchandise in a brick-and-mortar store and later buying online at lower prices. In the past, Best Buy has provided only one week training sessions for new hires. However, as a first step to prevent show rooming, Best Buy will provide...
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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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...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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...Best Buy Annual Report Project Summary and Conclusions 1. Company’s Performance: Profitability: (Gross Margin, Profit Margin, Return on assets, Return on shareholder’s equity, Return on Market Equity) * In recent years , Best Buy Co., Inc. has seen revenues shrink from $50705M USD to $45085 USD, and the company‘s net income from $1317USD to -441M USD. * Activity: * Poor Inventory Management * Total assets turnover is 2.99 in 2013, total assets management of the company is seems higher than Store competitors Radioshack, hhgregg , Aaron’s, Inc. * Inventory Turnover is turn down year to year 7.19 to 6.08 * Low Account Receivable Turnover ratio implies, the company should re-assess its credit policies in order to ensure the timely collection of imparted credit that is not earning interest for the company.(2009 to 2013 recespectvely;37.35 to 19.62) Solvency: Liquidity Enhanced Quick Ratio: The amounts of cash equivalents at February 2, 2013, and March 3, 2012, were $740 million and $343 million, respectively, * Declining Liquidity Cash Flows: Goodwill Impairment, Restructuring Charges, Interest Expenses, Loss from Discontinued Operations, Net Earnings from non controlling interest Increasing label of inventory year after year (more investment on inventory) 2. Company’s Strength/Doing well and Improving Areas: * Geek Squad expertise and knowledge, * Total assets management, assets turnover is improved continuously since...
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...Ramberg Brenna O’ Regan James Morrison Tweeter, etc. is an audio/video company that faced pricing strategy problems in 1993 that made the history books for adverse pricing strategies. Sandy Bloomberg formed the company in 1972 and the company faired well in the 1970’s and 1980’s. It grew to 13 stores when they implemented the Automatic Price Protection pricing strategy. This strategy nearly drove the company into bankruptcy. The company still faces unremitting problems which this paper will address. This is our proposal as RU Consulting, L.L.C. First, we will examine how the company evolved. Second, an analysis of the company’s strengths, weaknesses, opportunities and their threats will be considered and an analysis of their corporate strategies will be given. Third, we have included our solutions and recommendations for this company. Last, we would like to give our recommendation to you as the stockholder on what you should do with the stock you are holding. Tweeter started out as a small retailer of high-end audio/video equipment right outside of Boston University. This store was a success and soon expanded into 13 stores through out New England. [1] It began to get a reputation for its excellent service and quality products and sales soared. However, in the late 1980’s, the bottom fell out of the electronic market and caused two things: price wars with local competition;...
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...Ramberg Brenna O’ Regan James Morrison Tweeter, etc. is an audio/video company that faced pricing strategy problems in 1993 that made the history books for adverse pricing strategies. Sandy Bloomberg formed the company in 1972 and the company faired well in the 1970’s and 1980’s. It grew to 13 stores when they implemented the Automatic Price Protection pricing strategy. This strategy nearly drove the company into bankruptcy. The company still faces unremitting problems which this paper will address. This is our proposal as RU Consulting, L.L.C. First, we will examine how the company evolved. Second, an analysis of the company’s strengths, weaknesses, opportunities and their threats will be considered and an analysis of their corporate strategies will be given. Third, we have included our solutions and recommendations for this company. Last, we would like to give our recommendation to you as the stockholder on what you should do with the stock you are holding. Tweeter started out as a small retailer of high-end audio/video equipment right outside of Boston University. This store was a success and soon expanded into 13 stores through out New England. [1] It began to get a reputation for its excellent service and quality products and sales soared. However, in the late 1980’s, the bottom fell out of the electronic market and caused two things: price wars with local competition;...
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...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. ...
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...Best Buy 47 of Fortune’s 500 Constance Bartram MGT 521 April 16, 2012 Louise Stelma A mutual fund manager looking to invest in Best Buy would want to know the strengths, weaknesses, opportunities, and threats (SWOT). This provides information concerning the health and stability of Best Buy. Conducting a SWOT analysis shows if the company is implementing strategies gained from a SWOT analysis. This can reveal Best Buy’s future existence and success. The mutual fund manager also needs to identify the external and internal stakeholders and how Best Buy meets the wants and needs of the stakeholders. SWOT The strengths of Best Buy include high brand recognition, affordable prices, special offers, convenient locations, and a strong online presence. Best Buy is large enough to afford marketing so that it can use prime time television and radio spots to reach its potential customers. The weaknesses of Best Buy range from impersonal customer service to costs of maintaining huge warehouses and stores. This year already Best Buy lost 1.7 billion. Recently Best Buy announced it is closing 50 of its stores and is planning to open smaller stores and work on a stronger online presence. This will help them avoid what happened to Circuit City and also help compete with Amazon (USA Today, 2012). Potential opportunities are new gadgets and electronics with the latest digital cameras, cell phones, video games, and new television models becoming more popular. If Best...
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...Best Buy Co., Inc. Sustainable Customer Centricity Model Case Study Analysis Amber Keita ADMIN404 November 16, 2013 Table of Contents Executive Summary 3 Introduction and Company Overview 4 Mandate 4 Core Purpose 4 Vision & Major Goals 5 Core Values & Guiding Principles 5 Stakeholder Analysis 6 External Analysis 7 Opportunities 7 Economies of Scale 7 Complementors 7 Global Expansion 8 Threats 8 The Internet 8 Big Competition 9 Government Regulation 9 Internal Analysis 10 Strengths 10 No Commission Sales 10 Customer Centricity Model 10 Broad Market Coverage 11 Multiple Product Lines 11 Weaknesses 12 High Debt – Low Cash 12 Pricing Pressures 12 Legal Issues 13 Short Product Life Cycles 13 References 14 Exhibits 15 Executive Summary Best Buy Co., Inc. is a leading retailer of consumer electronics in the U.S. and Canada with nearly 4,000 stores worldwide. Among the extensive range of products marketed, are mobile phones, televisions, gaming systems, appliances and computers, along with all of their components and accessories. The company pursues a differentiation strategy based on excellent customer service, no commission, highly informed sales staff, and a plethora of end-to-end services. Best Buy was started in 1966, and has acquired seven companies in the path of its growth, all of which either provide a complementary service and/or additional products for its customers. The external analysis identifies...
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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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...Best Buy SWOT Analysis The following SWOT analysis is for Best Buy. Best Buy is an electronics and appliance retailing company that specializes in consumer electronics, home-office products, entertainment software, and household appliances. It is one of the largest specialty retailers in the United States, serving a diverse customer base. Best Buy’s current competitors include specialty home-office retailers (Staples, Office Depot); retail discounters (Wal-Mart); wholesale clubs (Costco, Sam’s Club); and online competitors (Amazon, Circuit City). Strengths * Revenue of $16.26 Billion and profit of $651 million in 2011 * Operate more than 1,150 stores in the U.S. and abroad * Retail class leader based on customer satisfaction surveys * Leading U.S. retailer in computers, televisions, tablets, and cameras * Implementation of green initiatives to reduce electronic waste Weaknesses * Initially established image as a lower quality retailer * Impact of class action lawsuit settlement in 2011 * Previously neglected niche market for higher end products Opportunities * Purchase of Carphone Warehouse Group interest (U.S. / Canada) * Growth in sales of mobile phones and tablets * Improving inventory management through long-term relationship with suppliers * Further expansion of chain by opening “mobile” stores * Increasing availability of higher end merchandise Threats * Online competitors * Pressure from competitors to reduce prices * Rising labor wages * Current economic...
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...many reasons within the bad economy at the time of their existence, and decreased consumers spending and companies poor management. Lack of customer’s support, recognition and bad management lead to the companies threat of opportunities to strategize when the economy changed after Circuit City failed in innovating strategies of improving their competitive advantage. Best buy gained a competitive advantage over Circuit City non-existence by external factors of customer taking advantage of Circuit City no longer being in existence. The decisions of leaders can determine Organizational change played a huge role between vital areas of change and potential areas of both companies as in the strengths and weaknesses of the two. There were plenty of opportunities of growth for Circuit City. Lack of Internet presence was a major factor when it came to Circuit City demise, during a time where Internet use and shopping were gaining more popularity. If the company had taken advantage of the growth of the Internet that had developed over time then maybe the outcome would have been drastically different (Yukl, 2013). Best Buy on the other hand took advantage of the online shopping experience, as well as many other critical areas in which Circuit City failed to deliver. In this p Yukl, G. (2013). Leadership in Organizations (8th ed.). Retrieved from The University of Phoenix eBook Collection...
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...1. To set Best Buy apart from its competitors, Schulze introduced the warehouse-like store format in 1989 and took sales staff off commission. The number of employees per store was reduced by about a third, resulting in significant cost savings. This concept was crucial to Best Buy’s ascent to become the second largest consumer electronics retailer in the U.S. by 1993. strategy of non-commissioned employees to give customers more control during the purchasing experience. 1966 Richard M. Schulze & partner establish Sound of Music, Inc., a home and car stereo store in St. Paul, Minnesota. 1971 Richard Schulze buys out his partner 1982 Sound of Music Inc. expands to include household appliances. 1983 Sound Of Music Inc. becomes Best Buy Co. Inc. 1985 Best Buy Co. Inc. goes public, with an initial offering of $8.3miilion. New symbol is witnessed on the New York Stock Exchange. BBY 1989 Company introduces its Concept II stores, which have a warehouse format and no commissioned sales help 1992-1993 Best Buy surpasses the $1 billion mark in annual revenues 1994 Concept III stores, with hands-on information displays introduced 1999 Revenues surpass $10 billion 2000 Website www. Bestbuy.com is launched; Acquires Magnolia Hi-fi Inc. for $88 million , adding 13 more stores to the West coast Fundamentally, Best Buy's strategy is to reduce square footage, increase margin, reduce costs, and grow standalone businesses By 1993, Best Buy had become the United States...
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...Case Study Analysis Best Buy Co., Inc: Sustainable Customer Centricity Model November 13, 2012 Best Buy is the largest national electronics chain and the only one that remains since the closing of Circuit City in 2009 and Comp USA before that. Founded in St Paul, Minnesota in 1966 as the Sound of Music Store, it was rebranded as Best Buy in 1983 with a single flagship store in Burnsville, Minnesota. By 1993, Best Buy had become the United States second-largest consumer electronics retailer, breaking into Fortune magazine’s annual ranking of top 500 companies two years later at number 373. A partnership with Microsoft in 1999 help to boost the company’s profile and lead to the opening of its first retail store in Shanghai which was followed by stores in Canada, Mexico, Turkey, and nine European countries (Lowe, 2008 May 8). Best currently operates 1,105 big box stores in the United States. In addition to personal computers, computer equipment, and consumer video and audio products, Best Buy outlets, which are on average 44,000 square feet in size, also offer large and small appliances, and entertainment software that includes DVD’s, compact discs, video games, and computer software (Funding Universe, n.d.). Best Buy’s subsidiaries include Geek Squad, Magnolia Audio Video, Pacific Sales, and in Canada, it operates under both the Best Buy and Future Shop labels. Best Buy differentiates itself from its closest competitors, Walmart and Amazon.com, by not...
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