It had a thriving business model for several years. It sustained the 2008 economic crisis while its competitors like Circuit City and CompUSA went bankrupt. Best Buy has had a rough run since the beginning with ups and downs. However, Best Buy’s continued efforts to diversify its products targeting specific market segments are considered to be the key reason for the company avoiding the downfall that its competitors (Circuit City, CompUSA) faced during the economic crisis of 2007. (Fehr, 2010)
Revenue continued to double throughout the nineties. In 1995, Best Buy’s revenue was $3 billion, but there was no profit. They trained their employees to believe that customers were in charge of sales, not salespeople, and that they were there to assist in purchases, not be pushy. The consumer of the millennium was less needy for assistance in buying electronics; audio, video, and computer systems were commonplace in households of the time. Customers were allowed to help themselves to items on shelves, much like a grocery store setup, and check out when ready. This bolstered customer satisfaction rates. Revenue was above10 Billion in 1999. (Company Histories)
Best Buy is one of the best electronic retailers in the North America and the leading name in the electronics industry. Best Buy has more than 4000 stores within U.S., Mexico, Canada, Turkey and China (Hoffman, 2010). Best Buy practices differentiation strategy by using customer centricity model that provides end-to-end service. Best Buy was first established in 1966. They changed their name from “Sound of Music” to the “Best Buy” in 1983. Globally, Best Buy has made great business by increased market share and acquisitions of companies. They acquired companies like Geek Squad, Magnolia Audio Video, Pacific Sales and most recently The Future shop.
The Headquarters of Best Buys is found in Richfield Minnesota. It is a large company with approximately 155,000 employees and 1,100 stores in the United States alone. It also has about 2,800 stores in other countries outside the Unite States. These countries include: Canada, Mexico, China and Turkey. To add on to this, it has a number of subsidiaries namely the Geek Squad, Pacific Sales, Future Shop and Magnolia Audio Videos. Its mission is making life fun and easy by making technology solve customer needs and helping the same customers to appreciate the benefits of technology. It also aims attaining sustainable growth and earnings through constantly changing its business model to suit the needs of the customers (Lal, 2006). It also strives to sell quality products along with maintaining a high level of employee training program in order for them to have extensive product knowledge.
By having the best price, Best Buy can afford to have window shoppers. They will be able to see all of the new merchandise and if they do comparison shop, the will return to Best Buy.
Best Buy is a multinational retailer of consumer electronics, computing and mobile phone products, entertainment products, appliances, and related services. The company operates retail stores and call centers and conducts online retail operations under a variety of brand names such as Best Buy, Best Buy Mobile, The Carphone Warehouse, Five Star, Future Shop, Geek Squad, Magnolia Audio Video, Pacific Sales, and The Phone House (Bestbuy.com, 4). The domestic segment consists of all operations within the United States, while the international segment includes all operations in Canada, Europe, Mexico, and China. The Best Buy 's success is contingent on the market 's demand for electronics. The company 's strategy is to provide good customer service combined with lower prices (news.cnet.com). Best Buy 's success is directly related to economic conditions, the cost of goods, and other things like fuel prices. The company 's strategy depends upon the ability to offer customers a broad selection of name-brand products; therefore, leading its success to depend upon satisfactory supplier relationships (Bestbuy.com, 8). Best Buy, as it is included in the retail segment, is a seasonal store. Their stronger quarter is the fourth quarter, which they can contribute to the holiday season for their success.
The consumer electronics giant, Best Buy, was first established in 1966 with a single location and a staff of three in St. Paul, Minnesota, selling audio equipment targeted at 18-25 year old males. Initially Sound of Music/Best Buy grew through acquisition, expanding to nine locations in the Twin Cities area by 1978. The name, Best Buy, and expanded product line, ranging from audio and video equipment to large appliances, were a result of a “best buy” sale of damaged inventory at bargain prices in 1981. In the mid-1980s, Best Buy launched superstores similar to those of their main competitor, Circuit City and expanded by 15 stores between 1985-86. In 1989, Best Buy launched itself as a
Best Buy Co., Inc. is a multinational retailer of technology and entertainment products and services in the U.S., Canada, and Mexico. The multinational retailer sells both products and services through more than 1,600 retail, mobile stand- alone, and smaller express stores under the Best Buy, Best Buy Express, Best Buy Mobile, Five Star, Future Shop, Geek Squad, Magnolia Audio Video, and Pacific Kitchen and Home Sales banners. Its stores sell a variety of electronic gadgets and wearables, tablets, movies, music, computers, mobile phones, and appliances. On the services side, it offers design, delivery, installation, repair, maintenance, technical support, and subscriptions for mobile phone and Internet
In the operating level, the biggest objective of the Best Buy operating department is to expand its growth domestically and internationally and reduced its operating expenditures in-store. By 2012, the total number of stores in US is 1103, opened 7 and closed 3. In the same year, the total number of stores in Europe, Canada, China, and Mexico are 2393, 256, and 204, 8 respectively, opened 145, 31, 41, and 2 respectively, closed 109, 2, and 3 respectively (United States Securities and Exchange Commission, 2012). However, Best Buy operating department is not able to achieve its second objective until it implements a good strategy to reduce these expenditures.
Best Buy infrastructure has to be its primary strength starting with its operations, merchandise and services, distribution, and suppliers both in the domestic and international segment. Best Buy store operations are divided into districts and are under management of a retail field officer who oversees store performance through district managers. District managers monitor U.S. Best Buy store operations and meet regularly with store managers to discuss merchandising, new product introductions, sales promotions, customer loyalty programs, employee satisfaction surveys and store operating performance.
Best Buy Co., Inc. is currently the world’s largest retailer for consumer electronics. The company has 1,400 brick and mortar stores and is a popular online retailer as well. The stores serve as display room for various online retailers. Best Buy consumers can purchase electronic products such as mobile, corded and cordless phones, televisions, cameras, personal computers, laptops, appliances and more (David & F.R., 2015). Today’s society relies on convenience and technology, forcing companies to implement new ideas and projects in an effort to maintain their ability to compete with other companies. For continued success the company must look at the internal and external issues the company may face as well as their competitors and their best practices that are contributing to their success.
Best Buy is a company that has 40 years of history with a very accomplished sense of success. In 1966 Best Buy was a small electronics store in that originated in St. Paul Minnesota by Richard Schulze and an acquainted business partner. Considering that technology changes so rapidly, Best Buy has had to transform from just being the little electronics store down the way into a competitive, customer-driven, talent-powered company that emphasizes on pleasing the customers as it pertains to the life of technology. In 1993 Best Buy was recognized as the nation’s second largest electronics retailer and was recognized by
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” (bestbuy.com). The company has an objective to to provide the best technological products and service solutions to customers throughout its markets. Best also has as an objective to provide expert services to customers at prices that are described as unbeatable. The objectives also include the company having sustainable growth and earnings. The company marketing the products that is based on an operating model that is considered as customer centricity achieves the sustained growth and earnings. Best Buy uses a strategy that focuses on helping customers to be able to realize what they needed to stay connected with technology and the products that are desired. The company also spends time monitoring the needs of its customers, which
According to this case, and concerning about the strategy that Best Buy has created, retailers can similarly create a retailer-led product strategy to leverage their customer knowledge for product differentiation and to understand what the needs of the customers are; they must discover what satisfies the customer and what not. In addition, the retailer can seek for news partnerships, new stores, new countries and new categories and services in order to increase their net sales and their share market. It’s very important invest in marketing study aiming to discover what the other companies are doing. Besides, with the time, the smaller retailer can increase significantly even more than the