Test File 123456

I – Major Strategic Issues

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.

Best Buy began to experience slow sales growth in 2011. Sales growth slowed down from $49,694,000,000 in 2009 to $50,272,000,000 in 2010. Sales growth slowed down even more from $50,272,000,000 in 2010 to $50,705,000 in 2011. The sales growth from 2010 to 2011 was less than 1%. The company’s sales decreased by 11.09% in 2011 verse prior year and decreased by 5.93% in 2013 verse prior year. Sales growth slowed down to 1.59% in 2012 verse prior year. There was a slight lift of 7.37% in 2013 verse prior year. The recession and increase in competition had affected Best Buy in 2012 and 2013. During this time, there was a surge in new mobile apps that made shopping easier and more convenient for consumers. Best Buy was not ...

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...ccessories. The company will have to adjust their ecommerce strategy to compete with online retailers.

External Threats

One major external threat is online competition and warehouse competition. The same suppliers that wholesale products to Best Buy also work with online retailers and warehouse accounts. Some of these suppliers also host their own websites and sell the same products that are being wholesaled to Best Buy. Consumers are becoming confused on where to shop because there are so many options. I do a lot of research before I make a purchase on a big ticket item. The only time I will purchase a product from Best Buy is when I need that product the same day and I cannot wait for shipping through Amazon or eBay. Amazon has also been working on improving their shipping wait times. Pretty soon, we will see drones dropping off products in front of our door.