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.
Best Buy, though a firm in the general retail industry, is a major player in certain sub-industries that
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.
The eighties prompted change as well as the opening of Best Buy’s first superstore. During 1983, a new corporate name was approved and the Sound of Music Company became known as Best Buy Co., Inc. With mounting consumer support Best Buy continued its road to expansion by opening an additional five stores. In 1985, the newly named company was being publicly traded under the symbol BBY. The late eighties brought forth additional change for the continuously growing company. Best Buy adopted a new concept in retail merchandising with the opening of massive superstores. The new concept shifted the placing of all inventory on the sales floor and hiring a specialized staff of non-commissioned service representatives (FAQ). Such adaptations have fueled the company into progression and continued to promote the company’s corporate vision of “Making life fun and easy”(Fact Sheet).
With a growth strategy based on increasing sales, expanding operating profit margins and growing store base Dollar General has seen the desired growth success. Throughout this growth, Dollar General has been committed to their relatively simple business model: providing a broad base of customers with their basic everyday and household needs, supplemented with a variety of general merchandise items, at everyday low prices in conveniently located small-box stores. This commitment has proven growth but there are many risks associated with investing, as stated in the
Best Buy opened it’s doors in 1966 by the name of “Sound of Music”, it wasn’t until 1986 that it proceeded to change it’s name to what it is recognized today. Best Buy is the top retailer in the nation’s (USA) consumer electronic retail industry. What makes Best Buy unique is that they sell electronics and appliances used for home and office, they provide customer service and business support through their Geek Squad Technical Support System, and they offer major tech brands and their products such as Apple and Windows in house. According to The New York Times, the computer and electronics industry consists of companies engaged in the retailing of computers and peripherals, consumer electronics and other technology products. The industry includes household appliances, audio and video equipment, consumer software, digital cameras, cell phones and components and other electronic goods.” Like many top leaders, Best Buy has not been immune to issues in regards to maintaining its status in the market. Some of the issues the company faces include, loss in stock value, loosing the retention of it’s customers, and being out-competed by e-commerce companies in the same industry such as, Amazon. All of this can be classified as a marketing problem Best Buy faces.
Best Buy has a unique perspective on their business and technology because they pride themselves in educating customers. As Spenner and Freeman (2012) mentions, customers want simplicity and need to be able to make informed decisions. By educating customers about the products and teaching them how to use it, Best Buy could actually increase the chances of the customer buying the product because they are confident in it and Best Buy. This is how Best Buy practices business now. Building on this is the fact that employees are paid hourly instead of based on commission so the employees don’t have to make hard sales, which can be a negative for many customers. Centricity, Best Buy’s tailoring of their stores for targeted customers, is a great concept as well (Chandrasekhar, 2009). It allows the biggest profit generating customers to feel comfortable and encourages spending through a more relaxed environment.
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.
Walmart is one the biggest companies in the world. In 2012, Walmart regained the No. 1 spot for fortune magazine’s list of 500 American companies’ ranked by revenue. This is no small feat with sales being over 400 billion dollars in 2012 alone. The United States in 2012 only accounted for 62% of the net profits of Walmart making a multinational enterprise. In the business world there are multiple types of performance measures that can be applied to Walmart showing how large this multinational enterprise truly is and the quality it provides. Walmart is able to maximize customer savings and its profit margins by controlling its supply chain by focusing on key aspects. Walmart’s operation’s strategy is the key to their success and must be understood before their performance can be measured as well as how their supply chain effects that performance.
In an interview with James Wetherbe, Richard M. Schulze tells of how at eleven-years-old he became an entrepreneur in St. Paul, Minnesota as a paperboy. This newspaper boy would grow up to be founder of the world’s largest consumer electronics chain store, Best Buy Co. Inc. (Schulze, 2014). As an adult in 1966 Schulze partnered up with Gary Smoliak and opened the company called Sound of Music until 1986 (Bailey, 2015). Schulze bought out Smoliak around 1970 and by 1983 he had changed the name of the company to Best Buy Co., Inc. Four years later Best Buy Co., Inc. secures an entry on the New York Stock Exchange. During the early 1990’s Best Buy Co., Inc., had become the largest consumer electronics store in the United States.
The purpose of this report is to research and examine Toys "R" Us, the world's largiest toy chain store, so as to provide the company with strategic recommendations for future success. To throughly understand the company, the analysis is divided into multiple focus points: industry analysis, firm strategy analysis and firm financial analysis. The analysis concludes with rating that we give the company's stock as well as our strategic recommendations for the company to increase it's overall preformance.
First of all, Best Buy lacks a various range of different basic business concepts, throughout the years the electronics retailer hasn’t been meeting the minimal needs of consumers, I’ve been reading several different reviews on Best Buy’s customer support forum on their website, and it’s just plain shocking the lack of customer satisfaction Best Buy hasn’t been
The ecommerce industry is growing faster than ever. TJ Maxx needs to start focusing more on ecommerce not only to keep up with competition, but also to make sure they do well during weak economic periods. ecommerce, overall, tends to do very well during lackluster economic times. TJ Maxx will be able to cut costs more easily the more they expand their ecommerce business. Our business idea will allow them to expand their ecommerce as we will take over their website and delivery. TJX Companies’ three ecommerce sites accounts for only about 1.0% of the company’s total sales. However, the online channel is a key growth driver and TJX is taking initiatives to improve its online business. The ecommerce sales
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, ...
Generally, suppliers to retailer have monumental supply chain with little room for change. Companies account stronger for customer needs, depleting the cost of efficiency.