...All Hands on Deck: Best Buy Fights for Traction Organizational Change October 1, 2013 All Hands on Deck: Best Buy Fights for Traction Best Buy was incorporated on October 20, 1996 and is a multinational retailer of consumer electronics, computing and mobile phone products, entertainment product, appliances and related service (Reuters, 2013). In the early to mid-1990s, Best Buy was growing aggressively throughout the United States; however, as they grew the company had grown too big to function effectively (Gibson & Billings, 2003, p. 10). Net store operating profits were not keeping pace and stocks were dropping (Gibson & Billings, 2003, p. 10). Most of this was based on most of the stores being managed by the brash energy of young management teams (Gibson & Billings, 2003). It was early on in Best Buy’s evolution that they needed to move from inexperienced organization to more practiced and seasoned business strategy. In order to gain back their momentum, Best Buy leadership had to do something never done before with such a large organization: implanting transformational, cultural and process change in a company of over 30,000 people with a small team of internal change agents and the support of a consulting team (Gibson & Billings, 2003, p. 10). In order to create this change, Best Buy created a change implementation team (CIT) that focused on changing the way employees would think and behave in the workplace. The CIT team developed...
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...BA 301 – Homework Assignment #2 October 23, 2014 Symptom: Best Buy’s overall Revenue decreased %19 over a period of four years and is projected to continue to decrease over the next 5 years. Gross profit margin has been also gradually decreasing and Best Buy’s Operation Margin is extremely unstable. Possible Causes: 1. Customers are exhibiting “Showrooming” behavior at Best Buy. The act of showrooming occurs when a potential buyer comes to a store to try out a product, but instead of purchasing it from the place they visited, they will search for a better price online. Best Buy started to release their concerns to shareholders about this in 2012 and enacted strategies to attempt to overcome this type of consumer behavior, but unfortunately still struggles with this phenomenon. Best Buy has used to combat this is launching a Customer Loyalty Rewards program called My Best Buy Rewards.™ The most common objective that drives companies to use this sort of program is to maintain sales levels and increase repeat-customer purchases. Although Best Buy’s program appears to have the best buy customer in mind, My Best Buy Rewards™ might dangerously increase company spending and has a cumbersome enrollment process. Best Buy believes that loyal customers will be less price-sensitive, will spend more at their retail locations, and will recommend the loyalty program to their peers. Unfortunately, as Grahame R. Dowling and Mark Uncles of the MIT Sloan Review pointed out, there...
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...ABHINAV NATIONAL MONTHLY REFEREED JOURNAL OF REASEARCH IN COMMERCE & MANAGEMENT www.abhinavjournal.com CHANGE THE GAME: A NEW MANTRA FOR FUTURE SUCCESS IN RETAIL INDUSTRY? A CASE STUDY OF TESCO’S SUCCESS IN KOREAN RETAIL INDUSTRY Dipanjay Bhalerao Assistant Professor, Indira Institute of Management, Pune Email: dipanjay.bhalerao@indiraiimp.edu.in INTRODUCTION Today’s exponentially growing retail market of around USD 15 trillion (2011) is worth watching as lots of new practices and strategies are being adopted by the retailers around the world. Today there is an increasing need for every giant company to look for the emerging economies for growth. But in that growth pursuit are they slipping from the home grounds or the established markets! Also when the retail company enters into new established markets for expansion, they need to do something innovative which also suits those markets. So what should the retailers do to balance the growth of the established & emerging economies for the expansion! What provokes this thought is Tesco’s rare success in the Korean market. Why to call it rare! As Korea is the retail market where the Retail Giants like Carrefour had bowed to the knees in the battle of retail with the Korean retailer E- Mart, Lotte, the Market Retailer of Korea. Knowing such a market back ground Tesco did something, which stormed the market & brought Tesco into the big league of Korea. Before going into what Tesco did, let’s learn about Tesco and the Korean...
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...83% of U.S. consumers go online to research electronics, computers, books, music and movies before buying those items in bricks-and-mortar stores [Understanding How U.S. Online Shoppers are Reshaping the Retail Experience, - PricewaterhouseCoopers LLP.] As consumers and companies have become more sophisticated, the omni-channel retail system has emerged. This model is predicated on the idea that the new-age shopper interacts with retailers across multiple channels. Optimists have applauded this evolution, as traditional brick-and-mortar locations have benefited from consumers’ ability to shop from home. Skeptics have voiced concern over the emergence of showrooming behavior, in which consumers use brick-and-mortar locations to examine products before purchasing goods online. The answer to this controversy remains unanswered, and has resulted in widespread doubt regarding the future and current utility of brick-and-mortar...
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...People who engage with a brand through multiple digital channels buy as much as four to eight times more as those who simply interact with retailers through one channel,” according to Maginus digital marketing executive Amanda Mulquiney. ARTICLE HIGHLIGHTS: While retailers may consider showrooming to be a threat, the power of in-store Wi-Fi and displays shouldn’t be underestimated. M&S’s free next-day-delivery-to-store proposition has supported 54 percent of the orders placed or collected in-store since launch. What began as a marketing gag generated engagement about the Bloomingdales brand’s use of cool technology to create excitement about the Super Bowl. If that is the case, doesn't it make sense for retailers to use digital in-store, providing the types of devices with which omnichannel shoppers are already used to interacting with? While retailers may consider showrooming to be a threat, the power of in-store Wi-Fi and displays to enable consumers to access product information, reviews, and prices shouldn’t be underestimated. Let’s look at three examples of retailers innovating with digital technology to improve their in-store experience and drive engagement and sales. Marks & Spencer’s Digital Flagship Department Stores: M&S has been providing more ways to access products, including the introduction of new browse-and-order points, large digital screens that play catwalk videos to showcase products, and virtual makeover counters with facial recognition technology...
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...small but growing Retail Travel Daily Deals $5 $4 $3 $3 $6 $10 2013 $14 2014 $8 $18 $22 $25 $10 $14 $12 $6 Forecast for US eCommerce Sales ($B) $2 $4 $6 2012 2015 2016 2017 rrester Research Mobile Commerce Forecast, 2012 to 2017 (US) des tablet commerce and game/app downloads, auctions le of two retailers! Retailer 1 $100,000 A mobile-optimized site Retailer 2 $5,000,000 Multiple apps, extensive mobile marketing program custom mobileoptimized sites obile investment ctivities affic from mobile 8% 1.5% 10% 1.5% ales from mobile 3 retail use cases smartphones: ead email from etailers se the store ocator eceive texts with pecial offers orrester-Bizrate Insights Flash Survey, Q3 2012 e showrooming controversy arted with this “What we aren’t willing to do is let o only retailers us our!stores as showroom!we will be challenging y develop an assortment that will b competitive and profitable!” -day dynamic pricing illustrated sekeeping e evening reception is starting, please m ur way outside to the Lighthouse Courty drinks and appetizers. nner will be served at 6:30pm in the hthouse and California Courtyards. ase proceed to the Grand Ballroom at 00pm for a presentation by Brian Krzan tel Corporation’s Chief Operating Officer Building Global Conn Collaborate. Innovate. Accel Q &A Building Global Conn Collaborate. Innovate. Accel...
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... Consumers can decide which retailer that they want to purchase their electronics from. They have the option of purchasing it directly from that particular retailer or even just ordering it online. Because of the high exit barriers, increasing buyer demand, and increasing sales, it is recommended that Best Buy continues to try to change its strategy to be able to gain its past sales trend again in the consumer electronics industry. In the beginning, Best Buy started off strong with increasing sales and profits, but over time this trend started to change. As shown in Exhibit 7, Best Buy is the only competitor within the consumer electronics industry that has experienced a recent trend of decreasing sales. Some of this has to do with showrooming. Consumers are not making their purchases from Best Buy. They are coming into the store to learn more about the product, and they go out and purchase the product elsewhere after comparing prices. The driving forces of the industry (Exhibit 3) are what is currently pushing the industry forward. The innovative products, diffusion of technical know-how, revenue...
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...Table of Content Summary 1 Introduction 1 Situational analysis 3 PESTEL Analysis 3 SWOT Analysis 7 Competitive Edge Analysis 7 Recommendation 9 STP Analysis: 9 Marketing Objective and Goals (SMART) 16 Marketing Mix (7Ps) 16 Conclusion 20 Reference 21 Summary This report is focusing on the washing machine sector of Whirlpool Corporation in the UK market, firstly give a situation analysis of the broad market, which including using PESTEL SWOT and Competitive Edge, analysing both internal and external environment of the business combined to demand of customers; secondly offer several recommendation to the business using STP, SMART and 7Ps models; finally a brief conclusion is given. Introduction Washing Machine is one of the most common household appliances in the UK, with many global brands sharing, such as Hotpoint, Bosch, Beko and LG etc. Whirlpool is one of them with a range of washer and dryer products. Even though these global brands compete in other home appliance sectors as well, washing machine marketing competition seems less fierce than other short life appliances. The market share of Whirlpool's washing machine can be calculated either by value of sales of customer possession. Graph 1(Westgarth, 2014) showed the market shares of several brands in the UK market by value. It is clear that Whirlpool only counted 3%, which is the lowest, only one tenth of the market leader Hotpoint. Graph 2(Westgarth, 2014) illustrate another picture of...
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...Are Online and Offline Prices Similar? Evidence from Large Multi-Channel Retailers Alberto Cavallo∗† MIT & NBER This version: April 18, 2016 Abstract Online prices are increasingly being used for a variety of inflation measurement and research applications, yet little is know about their relation to prices collected offline, where most retail transactions take place. This paper presents the results of the first large-scale comparison of online and offline prices simultaneously collected from the websites and physical stores of 56 large multi-channel retailers in 10 countries. I find that price levels are identical about 72% of the time for the products sold in both locations, with significant heterogeneity across countries, sectors, and retailers. The similarity is highest in electronics and clothing and lowest for drugstores and office-supply retailers. There is no evidence of prices varying with the location of the ip address or persistent browsing habits. Price changes are un-synchronized but have similar frequencies and average sizes. These results have implications for National Statistical Offices and researchers using online data, as well as those interested in the effect of the internet on retail prices in different countries and sectors. ∗ Email: acavallo@mit.edu Financial support for this research was provided by the JFRAP at MIT Sloan and the NBER’s Economics of Digitization and Copyright Initiative. I thank Maria Fazzolari for her outstanding work implementing...
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...1 How Amazon and Same-Day Delivery Will Effect Retail Commercial Real Estate by: Ryan Mitts FIN 5433 Dr. Tony Ciochetti 03/30/2013 2 TABLE OF CONTENTS EXECUTIVE SUMMARY....................................................................................Pg. 1 INTRODUCTION.................................................................................................Pg. 2 THE STATE OF RETAIL REAL ESTATE.........................................................Pg. 3 THE THREATE OF E-COMMERCE TO RETAIL REAL ESTATE..............Pg. 4 IMPLICATIONS OF SAME-DAY DELIVERY.................................................Pg. 7 THE FUTURE OF RETAIL REAL ESTATE.....................................................Pg. 9 CONCLUSTION...................................................................................................Pg. 11 REFERENCES......................................................................................................Pg. 12 1 EXECUTIVE SUMMARY Real estate throughout the world suffered a huge shock during the financial downturn of the late 2000's, and while the vast majority of other sectors are on the mend, the retail sector still seems to be having a bit of trouble getting back to where they were before the crash. A large reason for this has to do with Amazon and other online retailers taking up a larger and larger share of the available sales forcing many companies into rethinking their business plan, leading to store closures, downsizing, and even...
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...SMART PHONE IMPACTS AND THE YEARS TO COME Introduction Smart phones have become a vital part of our everyday existence both in positive and negative ways. Very few of us can go an hour without checking our phones. Whether we are shopping, banking, listening to music, looking up ailments, or texting, we use our phones. Passwords, account numbers, and photos can all be stored on a tiny SD card usually no more than 16 gigabytes. Smart phones have impacted our relationship with music, changed the way we shop, and modified the way we manage our finances. Smart phones have drastically changed the way we live today, and will only continue to develop and reshape our lives in the future. Summary of Key Findings One major impact that smart phones have had is in the music industry. Today one doesn’t even have to leave home in order to buy the newest CD. All one has to do is download the music off one of the many free MP3 applications. Most smart phones are equipped with an MP3 player so users can listen to their favorite songs. This has caused a dramatic decline in revenue for stores that sell music. In fact, according to Ex TuneCore CEO, Jeff Price," In 2011 in the U.S., just eight years after the launch of iTunes, digital music sales generated more revenue than physical music sales in the United States” ( Smith, 2012). Napster set the stage and many others quickly followed. Artists have felt the pinch from the sources of music piracy as well. Smart...
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...February 28, 2014 Volume XL, Issue II Bed Bath & Beyond Inc. Nasdaq: BBBY Dow Jones Indus: 16,321.71 S&P 500: 1,859.45 Russell 2000: 1,183.03 Index Component: S&P 500 Initially Probed: Volume XXXVIII, Issue VII & VIII @ $69.77 Last Probed: Volume XXXIX, Issue XI & XII @ $76.52 Trigger: No Type of Situation: Business Value Price: Shares Outstanding (MM): Fully Diluted (MM): Average Daily Volume (MM): $ 67.82 209.7 212.3 (1.2%) 2.6 Market Cap (MM): Enterprise Value (MM): Percentage Closely Held: $ 14.2 $ 13.4 Insiders ~4% 52-Week High/Low: 5-Year High/Low: $ 80.82/56.37 $ 80.82/19.52 Trailing Twelve Months Price/Earnings: Price/Stated Book Value: 13.8x 3.4x Net Cash & Investments (MM): Upside to Estimate of Intrinsic Value: $ 781 Dividend: Yield: $ NA NA Net Revenue Per Share: LTM: 2012: 2011: 2010: $ $ $ $ Earnings Per Share: 2012: 2011: 2010: Overview Bed Bath & Beyond Inc. (“BBBY” or “the Company”) is a major operator within the retail sector. BBBY operates roughly 1,500 stores and employs approximately 57,000 people throughout North America, and the firm generates annual revenue of over $10 billion. The stores are primarily located in the U.S., and consist of the following brands: Bed Bath & Beyond, Christmas Tree Shops, Harmon, buybuy BABY, and Cost Plus World Market. BBBY’s product line includes a wide range of domestic merchandise and home furnishings. Examples of BBBY’s...
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...Go to www.bestbuy.com, click on the investor relations section (i.e., Four Our Investors), and explore Best Buy’s latest annual reports and 10-K (SEC) filings to see if you can identify the key elements of Bust Buy’s strategy. Provide an overview of Best Buy and use the framework provided in Figure 1.1 to help identify the key elements of Best Buy's strategy. One of the key element of Best Buy’s success is its competitive advantage. Competitive advantage as stated by Thompson et al. (2012) is the “ability to meet customers needs more effectively, with products or services that customers value more highly, or more efficiently, at lower cost; (p. 6). Best Buy has always taken an innovative approach to retailing. The company is aware of the types of customers that it drew, by creating their Customer Centricity model. The model consisted of five customer groups, each was given a name of its own. The company’s employees were given extensive training and was taught how to specifically handle each different customer segment, while merchandise, promotions and even entire stores were changed to target each market segment. Address what approach toward winning a competitive advantage does Best Buy seem to be pursuing? One of the biggest challenge Best Buy is facing is the stiff competition from online retailers. Customers are able to buy the same quality product at a lower price from online retailers such as Amazon.com and Walmart.com. Facing the loss of retail sales to...
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...MIS 446 Unit 2 Review Music 1. Review the evolution of the music industry. a. Old Model: Go on tour for free (or little) in order to achieve higher sales with record label. i. Record Labels had all power in contracts, musicians made very little in all reality ii. Originally only way to hear music was live, so records were a big deal to be able to listen at home iii. Bundling in albums iv. Record companies had the power, tried to sue customers b. Newer Models: v. Promoting self as a brand, like “Kanye” vi. Use of video as a medium: YouTube (allows for long tail content) vii. Internet breaks the bundle, people can buy single songs viii. Give away music for free or very little (Spotify, iTunes, YouTube, Pandora) in order to make money on mega tours, on merchandise, on brand itself ix. Avoid record deals/buy out of record deals x. Capitalize on people paying for the experience, you can’t download or torrent the experience xi. Use of metadatamakes iTunes work (crowd sourcing of track names) c. General Trends: xii. Listening to music at home has become private, go to shows for actual crowd experienceUsed to be records with speakers in order to listen, group activity xiii. Music is now an experience/service/information goodUsed to be a physical commodity 2. How did the internet force the music industry to change? What are...
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...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...
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