Best Buy Business Strategy Essay

They offer many name brand electronics from companies like Sony, Apple, and Hewlett-Packard along with many house brands that include Five Star, Magnolia Audio & Video, and Best Buy Mobile. In additional to electronics, they offer technical service through their “Geek Squad”. Merchandise found in a Best Buy store includes different types of electronic gadgets, movies, computers, and

- Best Buy tap on the reputation of Jiangsu Five Star Appliance Company because it is the largest retailers of consumer electronics and appliances in China.

These changes were necessary with the growing instability in Europe and with the ever changing economy in China so in the meantime “Best Buy has decided to explore more profitable growth options for the Best Buy brand in these markets, including the option to reopen two of the closed stores in China at a later date”.()

In 1985, the company successfully raised $8 million in an IPO on NASDAQ. Best Buy debuted on the New York Stock Exchange in 1987. Schulze introduced a new store concept dubbed-Concept II in 1989 to set Best Buy apart from its competitors. Concept II replaced dimly lit industrial-style stores with brighter and more fashionably fixture stores. Stores also began placing all stock on the sales floor rather than in a stock room, had fewer salespersons and provided more self-help product information for its customers. Best Buy remove commissioned salespeople and took sales staff off commission. The number of employees per store was reduced by about a third, resulting in significant cost savings. In 1992, the company achieved $1 billion in annual revenues (http://www.fundinguniverse.com/). In 1993 Best Buy became the second largest consumer electronics retailer in the U.S. Best Buy introduced Concept III which included expanded product offerings, interactive touchscreen kiosks that displayed product information for both customers and employees, and demonstration areas for products such as surround sound stereo systems and videogames (https://www.revolvy.com/) The company initiated a massive makeover, scaled back operations and controlled inventory more tightly. The company added almost 50 new stores in 1996 and moved into additional new territories, including Philadelphia. Revenues rose to more than $7 billion in fiscal 1996 from 1995 revenues of $3 billion. Net profits

Best Buy Co., Inc is a “multi-national, leading retail provider who sells consumer technology products and the largest company who is well known for selling products, such as “electronics, appliances, computing and mobile phone products, entertainment software and other related services.”

A long tail strategy for Best Buy would involve offering a great variety of products through its online store, even if those products are only attractive to a small percentage of the population.

Satisfying the customer’s desires should be a major focus with any business in order to be successful. The way to complete this is through some sort of business level strategy. “Business level strategies detail actions taken to provide value to customers and gain a competitive advantage by exploiting core competencies in specific, individual product or service markets.” (Business Level Strategy) Best Buy’s unofficial mission statement: “Our formula is simple: we’re a growth company focused on better solving the unmet needs of our customers—and we rely on our employees to solve those puzzles. Thanks for stopping.”

Best Buy leverages themselves fairly different from their main competitors. Most of their competition focus on cost savings to pass on benefits to their consumers, but Best Buy does things a little differently. Rather than focusing on price, and only price, the company adds value through their unique mixture of physical and digital stores; something you won’t see at amazon.com or Walmart. One of the main benefits to this outlined by the case is that 40% of Best Buys online purchases are picked up in stores. This provides ample opportunity for the blue shirts to attach more accessories and service plans (both of which are high in margin). Also unlike the retail giants amazon.com, Walmart, and Target, Best Buy is a consumer electronics retailer.

In the future, online shopping will develop better than now, and this is an unstoppable trend. For Best Buy, the first thing is to increase online sales. Now a lot of companies provide online shopping services such as Amazon and EBay. People often compare the price between different web sites and choose the low prices to buy. Therefore price matching is very important. How to get faster price matching will be a key factor to get competitive advantage. Another important factor that can help Best Buy gain the competitive advantage is accurate and fast delivery time and better pre-sale and after-services. Pre-sale consultation and after-sale maintenance return service are also important for the retail store. Best Buy can put its strategic position

According to Kotler, P. & Keller, K.L, Best Buy is the world’s largest consumer electronics retailer, with $34.2 billion in sales in fiscal 2009. Thanks to its expansion and risk decision, Best Buy was able to increase sales. One example is putting staff on salary instead of commission pay. With this decision, the results created a friendlier atmosphere and low-pressure shopping. Moreover, Best Buy faced new competition like Costco and Walmart. What made Best Buy distinguished from the new competitors was the implementation of a selling product services. Focusing on providing customer services, and offering personal services like installation and at-home delivery.

Best Buy’s mission statement is “Our formula is simple: we’re a growth company focused on better solving the unmet needs of our customers—and we rely on our employees to solve those puzzles. Thanks for stopping.” Their company perspective is the following “Our vision is to make life fun and easy. Our business strategy is to bring technology and consumers together in a retail environment that focuses on educating consumers on the features and benefits of technology and entertainment products, while maximizing overall profitability. We believe our stores offer consumers meaningful advantages in store environment, product value, selection and service, all of which

Best Buy is a multinational retailer that sells both products and services through three primary channels: about 1,500 retail stores, online, and call centers. It sells consumer electronics and a variety of related merchandise, including software, video games, music, DVDs, Blu-ray discs, mobile phones, digital cameras, car stereos and video cameras, in addition to home appliances (washing machines, dryers, and refrigerators), in a non-commissioned sales environment (Hoovers, 2013). It has also branded store banners that include Best Buy, Best Buy Express, Best Buy Mobile, Five Star, Future Shop, Geek Squad, Magnolia Audio Video, and Pacific Sales.

When Joly assumed the role of CEO in September 2012, Best Buy was immersed in problems ranging from rapidly declining sales, intense rivalry from online retailers such as Amazon the leading retailer of technology products, services and solutions, with approximately 1600 stores in North America and more than $40 billion in annual revenue including individuals who sale their electronic equipment online at much lower prices.

While the bottom spot has familiar faces the top spot also has familiar faces, with 15 out of the e first 20 major brands coming from the USA, out of the first 20 brands the first 6 had an unchangeable status maintaining their position from 2013-2014 (Appendix 1). From my observation at the top 20 amazon stood out of the bunch rising 5 spot from their previous position in 2013-2014. Based on their everything store mission they have expanded their reach into different variety of market ranging from Fire TV, Amazon Prime, Fire phone etc. (Bestglobalbrands.com, 2014).

Michael Porter provided a framework that models an industry as being influenced by five forces (Porter, 1980). Theseinclude the threat of new entry, the threat of substitutes, and the power of buyers, the power of suppliers and competitive /Degree of rivalry.