Justin, You indicated many great observations about Best Buy. To be honest, I see Best Buy as the first place to go and play with new technology or when I need an advise of "experts" to decide what device to buy, even though I always go online and find information by myself, I just find it helpful. Also, I check prices online and see which entity offers a better one, and if I want to avoid shipping and Best Buy has my final selection, I request a price match. Of course there's a policy, but the good thing about Best buy is their matching price system because attracts more customers, increase traffic, but not sure if this represent a big financial threat. Some additional weaknesses I see, is the limited items they sell; amazon on the other
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.
Unlike Target, who’s profits allow them to self fund the company, by back debts, and pay higher dividends, the gross profit margin for Best is rather low; currently it is at 24.5%. Also, financial analysis and quick ratios show that Target is in a superior position, whereas Best Buy is very weak and demonstrates a lack of ability to pay short-term obligations (Standard).
A competitive strategy is a plan of action that a company develops towards attaining a competitive advantage over its competitors in the industry. Companies examines and research their competitors strengthen and weaknesses and compare them to its own. A company strategy can incorporate efforts to please customers, ward off competitive threats, and meet a unique competitive advantage.
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.
Best Buy not only does business-to-consumer but also on business-to-business sales. This allow them to generate revenue from another market.
Best Buy’s History & Main Characters: Best Buy is Minneapolis-based and is North America's leading specialty retailer of consumer electronics, personal computers, entertainment software and appliances. Throughout Best Buy's 37-year history, the company has maintained the tradition of making life fun and easy for customers and employees, while providing a significant return to partners and investors. It has 80,000 employees and over 550 stores in the U.S., in addition to the brands Best Buy Canada, Future Shop and Magnolia Hi-Fi. Their leadership is led by Dick Schulze, Founder and Chairman, Brad Anderson, Vice Chairman and CEO, Al Lenzmeier, President and COO, and Darren Jackson, Executive Vice
Other retailers have like products and same brands in their stores. Also, its prices are relatively high compared with some supermarkets and online stores.
The low cost product can also change customers buying behavior. Some customer who prefer to buy goods in the physical stores might decide to buy Amazon’s online product if they see it is in so low a price.
Best Buy Inc. has built a reputation as a ground-breaking retail giant. It is known as one of the first “big box” stores in
is due to the fact that some of their current customers only buy from special sellers.
Best Buy provides good quality products at a great price. They also understand that customers want hassle free shopping, which draws consumers into their store to window shop. For many industries this may not be strength, but for Best Buy it is.
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.
Amazon make sure that customer service is the best, Customers experience low prices through Amazon, the fastest delivery, having a form of reliable contact. Amazon customer service problems have allowed retailers to sell itme on the website, to make broaden the worlds selections of products. Amazon has a rival EBAY, which also allows merchant to sell and buy through its site, but with eBay there has been complaints with poor service and fraud (Cohen, 2009).
The threat of substitutes for Amazon is high. With the exception of its patented technology, there are quite a lot of alternatives to Amazon’s products and services. In addition to physical presence, most companies have an online store as well. Amazon’s products can be purchased all over the internet and they are just spread out among different web sites. The companies operate in brick-and-click mode providing the similar product categories and competitive prices have become the biggest threat for Amazon. However it is extremely difficult for Amazon to establish physical stores or launch price
Amazon can use 3rd degree price discrimination to divide customers into different groups and charge a different price to customers in different customers in different groups, but the same price to all consumers within the group. The firm will charge groups of customers prices relative to their demand elasticities. We can illustrate this on a graph: