Best Buy Executive Summary

Best Buy Co. is a leading global producer of electronics, technology and home office products, appliances, and related services such as service contracts, technical support, product repair, and installation services. The company offers its products and services directly to consumers, small businesses, and educators on both domestic and international markets. The domestic segment includes but is not limited to such brand names as Best Buy, Best Buy Mobile, Magnolia Audi Video, Geek Squad, Pacific Sales, and Napster. Retail store and e-commerce operations in Canada and Mexico represent the international segment of the company. In Canada Best buy Co. is known under such brand names as Best Buy, Best Buy Mobile, Cell Shop, Future Shop and Geek Squad when the Mexico’s affiliates operate under the brand names Best Buy, Geek Squad, and Best Buy Express. International stores, similarly to U.S. Best Buy stores, use an operating model that involves inventory management, customer relations, human resources training, and merchandise display.

While the case analysis shows Best Buy has had success with the customer-centric model, care should be taken if the company continues expanding. Anderson’s gamble of building more stores to offset the declining profits of established stores has worked, however this model of business is not sustainable. If Best Buy continues to expand, the company should look at opening more stores in foreign markets with its “centrized” approach

Best Buy understands the products they sell and the services they provide connect the world. Best Buy additionally, strives toward the pursuit of happiness; this corporation has the unique ability to make its people happy.2 Best Buy presents a great place to work, and happy workers make customers happy.

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.

Best Buy’s decision to consolidate Future Shop's business brought out many issues and questions regarding the legal processes and the future of Best Buy as an effective organization. In our report, we have addressed your concerns in regards to the termination of employees, structural and cultural changes to the combined business, the motivation of current and retained employees, and the various legal considerations in relation to the key stakeholders.

The opportunities of this company are global expansion, new alliances and agreements, and the demission of one of its biggest competitors, Circuit City. Best Buy has already begun to internationally expand its business in the U.S., Europe, Mexico, Canada, and China. Throughout the years, Best Buy has continued to gain more global presence in various countries, such as China. In China alone, the company owns “a majority stake in 151 Jiangsu Five Star outlets” (Le, 2008).

When compared to Target, Wal-Mart offers its customers more of the element of a “one stop shop”. With services and goods ranging from healthcare, home essentials and groceries, many have asserted that Wal-Mart offers almost anything an individual may need for their day-to-day activities. While department stores may benefit from a marketing strategy aimed at a specific market demographic, Wal-Mart’s elements of inclusiveness and vast selection of goods and products make for the perfect storm of success should the CEO adopt a marketing strategy that places an emphasis on the low prices of these products that many customers find essential for their daily routines. In this respect, Wal-Mart possesses a marketing advantage over specialty department stores due to the increased demographic of customer and the ability to somewhat adjust pricing due to surplus (Ferrell, Hirt, Ferrell, 2009). Even with these advantages on their side, the rapid rate at which the company continues to grow is an aspect that should be closely monitored to assess what aspects are truly beneficial and which strategies related to growth are ultimately resulting in a detriment to the company.

Due to worries on quality of products, Best Buy relies on few reputable suppliers. Once there is issue with suppliers, for example, disagreement on prices or sudden shutdown of suppliers, Best Buy will have to face the problem of stock shortage. Other than that, Best Buy does not provide enough training to staffs, especially salespersons. They do not have sufficient information or knowledge to reply enquiries from customers. Worse still, in some cases, non-knowledgeable staffs even provide incorrect information to the buyers. Besides, the company does not have enough supervision on the quality of products and it results in several product

UnderWater Tempo would like to partner with Best Buy to sell the BlueWave underwater/waterproof speaker. A company like Best Buy that sells the most up to date and high end technology devices could benefit financially by adding an advanced and unique waterproof speaker. This report will include:

Best Buy Co. is a multinational retailor of consumer electronics, home office products, entertainment software, appliances, and related services. The company recorded revenues of $50,272 million FY2011, an increase of 1.2% over FY2010. With the 5.4% decrease in operating profit, 3% decrease in net profit, and subsequently the decrease in net earnings, Best Buy’s founder and chairman decided something needed to be done. Dick Schulze announced that he wanted to take the chain private with an offer of $24 to $26 per share. With this task, challenges ensue, and our team has provided the following recommendations for a strategy overhaul in Best Buy’s operations.

Unfortunately in the present day we are a culture that are not only more aware of the products we chose to purchase but are able to enjoy the flexibility of shopping from home. Customers shopping at Best Buy find themselves being “up-sold” instead of being “educated” on the products they are considering purchasing. Customer service is lacking and store associates do not have the appropriate product knowledge to satisfy customer questions. These are only a few concerns disrupting Best Buy’s position in the market today. Their dismal financial performance is a clear indication that customers are choosing alternatives. Retail stores can be successful if given the right tools. Apple stores are the perfect model to emulate. Apple provides a variety of sample products to navigate, hires and trains their personnel on the products they offer, and exudes an ambiance that is welcoming to the customer. Much like Lowe’s, Apple offers classes to customer to gain the knowledge necessary to operate their products in a fluent and enjoyable manner. The staff does not push sales, instead remaining laid back and offering an efficient check out

Best Buy Co, Inc. is primarily a technology based retail store, basing sales on low prices and discounts. A National chain that reaches into Canada their focus on popular entertainment and new and ever innovative technology often leaves them on the forefront of many substantial offerings. Not strictly confined to technology Best Buy provides many office essentials from software for the home and business to any number of related services. A corporate family containing a large number of name brand stores, the Best Buy clan includes Future Shop, Geek Squad and Magnolia Audio and Video. Constantly striving to compete with the larger companies Best Buy has gained a foothold in the technology retail marketplace (Best Buy Group 5)

Such strategies are very common in big box electronics stores such as BEST BUY. Best Buy is a specialty retailer of consumer electronics, home-office products, entertainment software, appliances and related services. Best Buy operates retail stores in many parts of the US and through their web sites under the brand name BestBuy.com and BestBuyCanada.ca. The company is always proposing new ways to increase revenue and provide the best customer service to their customers. Bob Willett, former executive president of operations for Best Buy had said, "Our goal is to create a flexible, high-velocity supply chain operating with better product availability for customers at a lower total cost for the company." Best Buy constantly lowers their prices by beating out all their competitors’ prices and maintaining quality customer service. The best way Best Buy uses price elasticity of demand to decrease prices and increase revenue is by making sure that they are offering competitor pricing, and making sure that every week prices are updated by updating what their competitors are currently selling their items for. According to the management, the only way to get customers to come into Best Buy is by word of mouth and the only way that is going to happen is by making sure that relationships are being built between consumers and

The Big-Box and department store retailer segment is declining. IVA is expected to decline at an annual rate of 4.6% in the 10 years until 2020. The recession took a great impact on the industry, which resulted in many companies failing to have adapted accordingly to the post-recessionary environment. The post –recessionary environment, includes consumers having the capability to easily compare prices and access online retailers. A number of big-box retailers and departments stores are also declining as Target and Wal-Mart makes moves into supercenter and warehouse industry , and out of the traditional big-box store model . The brick and mortar stores also incur higher operational costs than e-commerce stars because they have to include costs for their employees and retail space. As a result, cost savings of many online companies are undercutting department store prices.

The purpose of this report is to develop an in depth understanding of the retail Department Stores industry. This understanding will allow our team to create and implement a strategic plan in order to gain a competitive advantage for firms in the industry. The Department Store industry includes companies that sell a broad assortment of products and also incorporates Discount department stores who offer their products at lower prices than most other retail stores (Carter, 2015). There are five major product categories sold in department stores and they are apparel, drugs and cosmetics, furniture and household appliances, toys and hobby goods, and other (Carter, 2015). Some stores may also have pharmacy and photo services as well as restaurants.