(Best Buy Co Inc.)
Industry Analysis
➢ Group map ➢ Barriers to Entry
Economies of Scale High
Differentiation High
Total Capital requirements High
Switching Cost (at Individual level) Low
Switching Cost (at Business level) High
Advertising High
➢ Barriers to Exit
Specialized in assets making High
Level of Fixed Costs High
Commitment Level Low
Management Level Low
Contractual level of Commitment High
➢ Rivalry
Concentration Level High Low Rivalry
Rate of Growth Steady Rivalry level is Low
Company’s Fixed Cost Ratio High Rivalry level is high
Switching Cost Low Level of Rivalry is High
Differentiation High Low Level Rivalry
Exit from Barriers High Rivalry level is High
➢ Available Substitute
Electronics Goods
E-Commerce
Retailers Big Box Stores
Merchandize
Retailors Digital contents
Distributers
Amazon.Com eBay Wal-Mart
Costco
Target iTunes
Netflix
➢ Complementors
Both internal and external Complementors are present in the industry.
Internal External
Complementors that are act as itself
Computers and computer Software
Video Games
Video games System/TV
Acquisition of Greek Squad Payments
Processing
Industry
Industry
Shipping Industry
Technology
➢ Globalization
In this industry Economies of scale reaches at global level while Best Buy fulfill customers demand on National level as per culture and choice of countrymen. As this industry becomes very grooming industry that’s why level of competition not only increased but also it reaches at
(3) In an effort to replace foreign- sourced goods sold at Wal-Mart stores with American-made ones, Wal-Mart developed its “Buy American” program. By 1989, the company estimated it had converted or retained over $1.7 billion in retail purchases that would have been placed or produced offshore, and created or retained over 41,000 jobs for the American work force.
Wal-Mart, the multi-billion company and the second largest employer in the world, is the most controversial corporation in the world. Wal-Mart is a global powerhouse and affects many people around the world. Wal-Mart is constantly getting attacked from unions, human rights groups, small towns and small businesses. Wal-Mart is accused of treating their workers poorly and driving small businesses out of business. But however these accusations are false or over exaggerated. Wal-Mart offers families and low income people quality products. Also, they pay their workers competitive wages and treat them with respect. Wal-Mart opens their stores in rural and under developed areas. Wal-Mart improves the lives of the people who live rural area and
Like any successful business, Best Buy has to be on the cutting edge to succeed in today’s market. They do this by exploring what technologies and services other companies display all around the world. Best Buy also pays attention to the changing of times, realizing what’s dated and what is on the cutting edge.
Best Buy Co., Inc. is a multinational company in the United States and it deals, with consumer electronics, and accounts 19% of the business. The company also operates in Mexico, Puerto Rico, China, and Canada. Some of the subsidiaries of the company include CinemaNow, Geek Squad, Pacific Sales, and Magnolia Audio Video and operates in both Future Shop label, and Best Buy in Canada. Best Buy Co. Inc and its subsidiaries operate more than 1,150 stores internationally and domestically. The company also operates more than 100 “ZoomShops” or Buy Express Automated retail Stores, operated by the Zoom Systems, in both malls and airports in the entire country of the U.S. The company is headquartered in Richfield, Minnesota, U.S (Scott,
A host of internal and external factors plays an important role in the organizational structure and process. The opportunities for Best Buy are economies of scale, targeting new market segmentation and global expansion. Strong competition, growth in online sales and the new developments in government regulation are the threat for the Best Buy. Competitions in the electronics industry are based on several factors such as price, quality, durability, product features, customer preferences and warranties. With the advancement in the ecommerce and internet, Best Buy acquired many internet
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.
A man named Richard M. Schulze and his partner started Best Buy in 1966. The original store was called “Sound of Music” which was an electronics store that specialized in stereo systems. In 1967, Sound of Music purchased Bergo Company and Kencraft Hi-Fi and pulled in about $1 million in revenue. In 1969, Schulze took his partners half and decided to become a public company on the NASDAQ exchange. What started as a single store in Saint Paul, Minnesota became a chain of nine stores by 1978. In the 1980’s, Sound of Music was left with seven stores because of unfortunate accidents caused by a tornado. In 1983, Sound of Music was renamed to Best Buy Company. Along side changing the name of the company they also decided to expand on business by selling other at home appliances such as VCRs.
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
to see where the company is now with the use of a brief Swot analysis.
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.
Wal-Mart represents the sickness of capitalism at its almost fully evolved state. As Jim Hightower said, "Why single out Wal-Mart? Because it's a hog. Despite the homespun image it cultivates in its ads, it operates with an arrogance and avarice that would make Enron blush and John D. Rockefeller envious. It's the world's biggest retail corporation and America's largest private employer; Sam Robson Walton, a member of the ruling family, is one of the richest people on earth. Wal-Mart and the Waltons got to the top the old-fashioned way: by roughing people up. Their low, low prices are the product of two ruthless commandments: Extract the last penny possible from human toil and squeeze the last
 Illustrates low prices and at the same time, not portray a cheap image to consumer.
Any organization, whether new or old, small or big, requires certain methods, procedures and plans in place for its efficient functioning. Best Buy is the specialty retailer of the decade. When it comes to customer satisfactory surveys, Best Buy is the head of the retail class-its price is lower than 10%. It has created niche segmentation to each store making the profit of the company grow bigger because diverse target markets in each location and it offers a wide market mix of services. Hereinafter, I will go through the analysis of four basic management functions to explain the competitive strategy of Best Buy.
In each store, there are employees who job is to only make sure that they are assisting customers if they need help with finding anything. Each employee ware a signature shirt that is color coded by department where they work in (Sang-Hung, 2006). This is a great marketing strategy, because it doesn’t allow the consumer to feel that they are walking throughout the store without constant assistant. There are also employees who job is to provide the consumer with samples of products throughout the store on a daily basis, this allows the consumer to try the product before they buy it (Sang-Hung, 2006). This marketing strategy can be used as a survey technique that measure whether the product is worth selling.
The purchase situation I will be discussing is related to the most important meal of the day: breakfast. To be more specific, I will be discussing the various factors that led me to purchase an Egg McMuffin meal for breakfast before a busy Saturday. Ever since I was a young boy, I had always been encouraged to start my day off the right way with a healthy breakfast. This mainly consisted of my father preparing me a bowl of delicious fresh fruit in addition to cereal and milk. Other days I would enjoy a more classic breakfast, including eggs, bacon and toast. In addition, there were mornings where I would crave a sweet breakfast, to which I would then eat waffles, or pancakes with syrup. The bevy of food choices and the variety of options