As seen in Exhibit F, Best Buy has 1,055 main locations that consist of their standard large format stores, and 406 Best Buy Mobile locations that focus on mobile device sales. To supply these locations, Best Buy has 23 distribution centers located throughout the country. Comparatively, Wal-Mart has 4,625 stores stocked by 158 strategically located distribution centers. This puts Wal-Mart at a huge advantage in a couple of ways. Not only is Wal-Mart much more likely to have a store nearby any given customer, they are also better equipped to keep its products in stock at all times. This means more customers visit, and due to stocking, more customers can make the purchase they want. On an international level, Wal-Mart also exceeds Best Buy’s few hundred stores with 6,308 stores in over 11 countries. This furthers Wal-Mart’s availability to customers and puts them at an advantage over Best Buy. Additionally, the increased scale of Wal-Mart’s retail and distributive operations make them extremely competitive on pricing, a major aspect of purchase decisions for high-ticket items like consumer electronics.
Amazon is similarly competitive in terms of price, as it has no physical stores to o...
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...he company has had to recall a number of products that have defected or injured customers in recent years.
Another potential source of competitive advantage is Best Buy’s Geek Squad. While this has been a successful line of business for Best Buy, this too could become obsolete. Already an expensive part of Best Buy, Geek Squad costs would most likely increase if they wanted it to be more widely used. The likelihood of Best Buy overcoming this is arguably even less than its likelihood of competing with Amazon’s quick inventory - between 30 and 40%. With technology changing and a trend towards more user-friendly interfaces and products, consumers may not require the help of Geek Squad representatives to assist with their product, as they can figure out any issues on their own or by searching online for troubleshooting or product help blogs, customer reviews, etc.
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