Best Buy

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 President of Finance and CFO. Chairman Dick Schulze founded Best Buy in 1966 with the Sound of Music, an audio component systems store in St. Paul, Minn. In 1973, Vice Chairman and CEO Brad Anderson joined Sound of Music as a salesperson. The company quickly expanded into video products and computers, was renamed Best Buy in 1983, and became a public company in 1985. Best Buy’s revenues for fiscal year 2003 were $20.9 billion and net earnings of $622 million. It was ranked number 91 on the Fortune 500 in 2003 (Bestbuy.com). Best Buy stores are redefining the way customers shop by offering an unparalleled assortment of affordable, easy-to-use entertainment and technology products and services available through its network of more than 550 retail stores in 48 states and online at BestBuy.com. Best Buy is scheduled to open 60 new stores in fiscal 2003 and is on track to have 650 stores by fiscal 2005. Magnolia Hi-Fi is a high-end electronics retailer specializing in audio and video solutions for homes, ...

Best Buy is one of the largest consumer electronics retailers in the United States. The company was started in 1966 and has grown into a large corporation with over 1,400 stores in North America and over 2,600 stores in Europe and China (Hitt, Page 57). Best Buy was able to acquire more market share when CompUSA closed down their doors. Their second biggest competitor after CompUSA was Circuit City but this retail giant also closed down their doors in 2009. With these two large competitors out of the way, Best Buy had a strong advantage in the consumer electronics industry. Even with such an advantage, the company’s past stock returns have been below those of the S&P retailing group. Revenue growth has slowed down. The slowing down of the revenue growth can be blamed on the recession and the increase on new competitors such as Walmart and Costco. The company’s strategic issues include slow sales growth, net income loss and too much debt. Many of these issues affect the company as a whole.

The roots of Best Buy Co., Inc. can be traced back to St. Paul, Minnesota. This is where founder Richard Schulze opened the doors of his Sound of Music store in 1966. Understanding a demand for consumer audio components and systems in the St. Paul area, Schulze managed to provide a combination of great prices and excellent service, thus building a strong customer base, which quickly prompted an expansion into home appliances and video products.

The company was founded by Richard Schulze in 1966 in St. Paul, Minnesota and was originally called Sound of Music. In 1970 the $1 million mark was hit in annual revenues. Later in 1983, the name was changed to Best Buy. The company adopted the yellow tag logo in 1989. In 1999, Best Buy partners with Microsoft to increase sales. In 2009, a goal was created to reduce carbon. This was called "20 by 20," a 20% reduction in our absolute carbon emissions in North America by the year 2020. In 2012 there was a $1.7 billion quarterly loss. Currently, 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 range of brand names. With these brands, the company has had almost $50 billion in annual revenue in 2013 that employs over 145,000 people. There are 1,400 stores and locations in the United States alone. The online shopping sector has about 1 billion visitors shoppers annually. With that stated, BestBuy.com is in the top 10 retail websites in the United Sta...

Finally, we feel that Best Buy is making valued progress in terms of bringing about their own turnaround. From their 10-K annual report, it becomes clear that they are very aware of, not only their own situation, but the changes in the environment and industry as well. Their thorough investigations and awareness give us hope that they will continue to improve in the future. This has led us to conclude that investing in Best Buy would be a sound and beneficial decision, as we feel that they are on the edge, just beginning their big comeback into profitability and growth.

Best Buy operates in an oligopolistic market where there are significant barriers to entry and few large firms dominate the market by selling identical goods. Best Buy is a non-collusive oligopolist, existing in a strategic environment where firms do not cooperate, yet are interdependent due to the fact that a firm’s action affects the market. Recently, Best Buy experienced an increase in demand, increasing its revenues and profits.

Best Buy is currently underperforming because of several circumstances. It is at a competitive disadvantage with some large firms such as Wal-Mart and Amazon in terms of supply-chain and distribution, which impacts the customer in terms of price-point. Additionally, Best Buy has been undergoing a strategic change of direction that focuses more on small specific stores, and less on the larger, broader operations for which they are currently known. Though this may bode well for the future, there have been financial consequences from this process.

Since Best Buy sells the same items as competitors like Walmart and Target, Product Differentiation is an area that needs improvement for Best Buy. Where Best Buy excels for the Possible Competitors category is with their services. Developing specific services that are tailored to the customer needs and preferences allows Best Buy to have a competitive advantage. Consumers that shop at Best Buy often shop their because they can see the product in person and get information about new technologies or products prior to making decisions.Because Best Buy is a retail store that means its supplier are companies that produce electronic goods. The electronic goods market is saturated with manufactures and this gives best buy an advantage as it can offer more selection than some if it competitors in the specialty market of electronic goods. There are many alternate industry providers that can provide electronic goods to the costomers but with the recent failure of Radio Scach few speciality electronic stores remain, this provides an dadvantage for Best Buy.

Wal-Mart Effect This paper explores two articles that introduce the effects of Wal-Mart on the economy as well as Wal-Mart showing characteristics of being a potential monopoly amongst all retail stores across the United States. These articles bring to light the unknown power that Wal-Mart has over businesses, pricing, and other retail stores. All articles are stating that Wal-Mart’s monopolistic-like power is negatively affecting the economy in multiple ways, providing significant data to back their claim. This paper will go in depth of the theories that Hwang and Fishman have provided in their articles in attempt to prove that there is a “Wal-Mart effect” that is slowly evolving into a colossal monopoly and degrading the economy in the U.S. Everyone knows of Wal-Mart, a supermarket that’s goal is to bring the lowest possible prices to its customers, with a yellow smiley face logo that portrays innocence, making their image and purpose enticing to any shopper.

K-Mart Kmart is the #3 discount retailer in the United States behind Wal-Mart and Target. Kmart sells name brand and private label merchandise, mostly to low and mid - income families. It has more than 1,800 stores and currently employs more than 220,000 associates in all 50 states, Guam, Puerto Rico and the U.S. Virgin Islands and owns an e-tailer BlueLight.com. As of Jan.30, 2002,Kmart had 124 Kmart Supercenters that combine a full grocery, deli, bakery, video rental and 24 hour/seven-days-a-week availability along with the general merchandise selection of a Kmart discount store.