In Best Buy, the Benemundus Group has a great opportunity to take advantage of an undervalued company. Best Buy has been a historically strong firm, capable of overtaking large competitors, withstanding a large recession, and commanding high market share. In the last five years, the company’s position has begun to falter with financial and strategic underperformance. Though the quantitative effects are quite evident to a casual observer, the qualitative contributions that have caused this decline are not as readily available. The plethora of problems can be categorized as predominantly macroeconomic factors and firm-specific issues. Certain conditions affect Best Buy as well as competitors and therefore, cannot be considered competitive disadvantages. Best Buy, though a firm in the general retail industry, is a major player in certain sub-industries that deal with “luxury” goods (Exhibit N). It is important to note that the sale of “luxury” goods is affected more by market fluctuations on a macroeconomic scale. With more constricted finances, customers are more likely to focus on goods that are necessary. Like other competitors, Best Buy’s current underperformance is chronologically consistent with the latest economic recession. The exponential rate at which technology has advanced in the last decade is another macroeconomic factor. Such advances have slowly closed the gap between products from well-known and less-known brands. This phenomenon has caused less product differentiation among competitors, leaving price as the major decision-making tool for customers (“Global Consumer Electronics”, 2013). This lack of exclusivity of brands has increased buyer power for the consumer electronics sub-industry (Exhibit J). With price sensi... ... middle of paper ... ..., companies need strong management to be able to help revitalize economic success. Best Buy has had the disadvantage of having management inconsistencies during their fiscal downturn with four changes in CEO since 2009 (Exhibit I). Having a strong corporate force is so important that with the establishment of Hubert Joly as CEO in 2012, the company has had better direction in implementation of strategy to fix existing financial issues. In summary, macroeconomic factors and problems caused by the company have combined to bring Best Buy’s current underperformance. While Best Buy has less control over industry-wide problems, the company can attempt to reduce the impact with a better defined strategy. Many firm-specific issues can also be fixed with effort from the management, with potential to turn undercapitalized resources and capabilities into competitive advantages.
On April 4, 2008 Goldman, Sachs & Co. submitted a prepared prospectus for Dollar General Corporation. According to the prospectus, Dollar General is the largest discount retailer in the United States by number of stores. They serve a broad customer base and majority of products are priced at $10 or less and approximately 30% of products are price at $1 or less. They believe that their combination of value and convenience is what has kept them ahead of their competitors since opening in 1955. Dollar General has had substantial growth in recent years, growing their number of stores from 5,540 as of February 1, 2002 to 8,229 as of February 2, 2007. This growth encouraged Richard Dreiling,
After the case and readings the problems of LVMH there are several problems such as the declining demand for luxury goods because it is linked to political events, situation and social trends. (After the attacks of 9/11 an impact on luxury goods has dropped and had automatically an impact on LVMH sales)
Achieving world class business performance is a major challenge in today’s society. Manufacturing companies continue to face increased competition and globalization from its competitors. (1, p. 148). The automotive industry is one of the most volatile manufacturing industries that we have, which was evident in the 2008 – 2010 automotive industry crisis. (2) This global financial downturn served notice to the American automotive manufactures to raise the bar, in order to achieve word class business performance. General Motors, one of the country’s largest automotive manufactures, had to receive a government bailout to survive. During this time many with the corporation asked themselves, if we were a world class business, would we be facing this pending crisis. The answer was a resounding “NO”. General Motors has come out of bankruptcy and is focused on being a world-class business organization.
...d by the rich organizational culture that its leaders have managed to put in place. The result of such wise decisions has been a successful company which managed to sail through the economic crisis of 2008 with minimal trouble.
Best Buy has grown steadily and improved its business and customer’s experience in many ways throughout its journey from 1966 until 2011. The company’s main objective is to focus on making the customers visit to the store as pleasant and as informative as possible. The company is on its steady path of revolution and innovation by implementing customer driven and technology powered strategies. When any new business is setup, it faces its preliminary phase challenges and so has Best Buy but now the business is booming in the world of technology. It’s well known to be a one stop shop for all technological needs.
In order to compete they would have to be able to price match their products and provide the wide array of consumer services like Best Buy. With over 1,700 stores in the U.S. this allows the consumer easy store access with product and employee interaction of which manifest the loyal returning consumer. These factors in combination would entail a vast amount of working capital from the start along with experienced employees and therefore detouring new
Opportunities: Target has an opportunity to leverage its strength to overcome some of its weakness.
Consumers have on several occasions questioned the price of products in relation to their value. Quality, use and importance, are influential aspects that determine the way consumers respond to a particular product. On the other hand, manufacturers and retailers are more oriented towards increasing customer satisfaction by producing quality goods at affordable prices. However, affordability is not supposed to affect the company’s expected profits. Companies may therefore fail to meet the consumer expectation on price because of the costs incurred during the production of their products. Since consumers are the most important assets to a company, the price of goods should reflect the value that consumers are willing to pay. It should therefore be the responsibility of every company to ensure that pricing reflects value without compromising on the expected profits.
Pricing and retail strategy is a key component of any business. These strategies play a major role in a customer’s perceptions of a business. Price is almost always a key factor. “Speak to any average consumer and mention the names of some high quality, leading businesses. The chances are high that one of the first words they will use is "expensive". Not "excellent service", "marvelous range" or even "helpful staff" (2006). Wal-Mart uses an everyday low price pricing strategy which has been a massive success for the company.
In this report is discussed how that is going so far. Comparisons of their finances are made, but we will see what the strengths and weaknesses are and what their impact is on the company.
Best Buy, one of the biggest consumer electronics retailers in the world, provides products from smartphone, computers to large electronic appliances. It aims at offering a large variety of products with outstanding customer service at a comparably economical price. Yet, it has been facing internal and external challenges in the recent years. Bottom line and the share price are slightly catching up after a fall in 2013 but still barely satisfying the shareholders and customers are changing their purchasing habits which may threaten its future.
Price resulted to be the main point for customer to judge what is offered in the market (Monroe, 2003; Oliver, 1997). Price is also a main factor in transaction relationship where it is one of the medium used by marketers to counter the market, either in attracting or in retaining customer or as a element in competing ...
Olson, J. C. (1977). Price as an informational cue: effects in product evaluation. In A.G. Woodside, J. N. Sheth, & P. D. Bennet, Consumer and Industrial buying behaviour (p. 267-286). New York: North Holland Publishers.
To transform a good company to great company is all manages’ dream, but only few of them make it. To find out the core factors which lead to a good company became a great company is very difficult, because in different era, different industry companies face different opportunities and threats. To begin the research for the Good-to-Great study, Jim Collins and his research team searched for companies that: performed at or below the general stock market for at least fifteen years; then at a transition point began to pull away from the competition, and sustained returns of at least 3 times the general market for the next fifteen years. He started with a list of 1,435 companies and found eleven that met his criteria. These eleven companies produced, on average, a return of 6.9 times the general stock market during the 15 years following the transition points. Collins chose a 15-year span to avoid "one-hit wonders" and lucky breaks. In the book, Collins highlights some important factors which are the result of the research. They are level 5 leadership, fist who … then what, confront the brutal facts, the hedgehog concept, culture of discipline, and technology accelerators, (Collins, 2001, p.12).
“Despite worldwide softness in the sale of luxury goods, LVMH has cemented its position as the world’s largest and most profitable player in the category. To stay there it must keep its customers loyal and its brand strong and find new markets worldwide” (Hazlett C. 2004). That is why in its mission they state to represent the most refined qualities of Western “ art de vivre” all around the world. Their objective is to be the leader in the luxury market, continuing to transmit elegance and creativity. This poses some major challenges, the main one is to keep being the leader in the luxury market through a sustainable growth. The main problem to achieve it is the high dependency on three main countries, France, Japan and USA. This becomes a threat because if there is an economic downturn in one country it affects LVMH directly that is why.