Best Buy Co.,Inc.
Best Buy Co.,Inc. is an American multinational dealer in consumer electronics. It is headquartered in Richfield, Minnesota. As a result of the active business environment, Best Buy decided to use strategies like rebranding and mergers in order to promote its competitiveness. As one of the largest consumer electronics globally, Best Buy has gotten 19% of the global market in consumer electronics retail. The organisation has been one of the most successful industry but in the past , it underwent losses and resorted to a turn-around strategy among other strategies to surcharge the financial difficulties it faced. Due to the fact that the company is undergoing an intense competition from online and offline stores, Porter's five forces and PESTLE provide models that would help it become profitable once again (Taylor & Hunter, 2015).
Strategies Used by BestBuy
Unlike its competitors in the market such as Walmart and Amazon, BestBuy does not employ the low price strategy but is focusing on product and brand differentiation depicted by the vigorous employee training, online marketing, customer support, and cost control. The company has developed different outlets of their products operated under various brand names including, Geek Squad, Magnolia Audio, Pacific Sales, and BestBuy Mobile (Pomeranz, 2016). BestBuy decided to close 47 of its BestBuy stores and other mobile standalone stores in the United States. It decided to maintain Geek Squad Support Services and BestBuy mobile Store Services. International market segment is operated under different brand names such as BestBuy Mobile, Future Shop, Future Shop, and Connect Pro (Taylor & Hunter, 2015). One of the strategies that helped the company is the introduction of store within a store that is widely used in rebranded BestBuy stores in China named select Five Star outlets and BestBuy Mobile (Taylor & Hunter, 2015). BestBuy Express insists on traffic and convenience during purchasing and offers a large amount of accessories to the clients. Resizing and repositioning of stores in a bid to maximize revenue is also a successful strategy used in China.
BestBuy SWOT Matrix
Strengths
- Eased access to after-sale services to the client.
- Numerous online client recommendations.
- Good client reward system.
Weaknesses
- Liability for warranty replacement.
- Inability to ensure maximum revenue from all the outlets.
- Accountability for personal injury caused by products and brands sold by BestBuy.
Opportunities
- Increased amount of online purchases.
- Increased demand for tablets, iPads, and mobile phones.
- Consistent growth of commerce.
Threats
- Slow economic recovery in the North America.
- Low levels of consumer confidence in electronics.
- Seasonality of business.
- High competition for other electronic sellers in the United States.
Other Strategies Employed by BestBuy
There’s less threat to new entrants in the electronics market making just any kind of electronics retailers to start business in the United States and Europe. However, after having a close look, there are other factors such as the cost of advertising, logistics, and high initial investment preventing just anybody from doing well in this market. Since electronics are not among basic necessities, bargaining power of the consumers remains relatively high thus BestBuy has to do price-matching in a bid to remain competitive in the global market. Many suppliers rely on BestBuy to distribute their electronics since it is one of the largest retailers of consumer electronics globally. Substitutes are not a threat to the company since it sells a wide variety of electronics to the clients giving it a competitive edge. Companies such as the Magnolia Hi-Fi Inc. and mindSHIFT Technologies Inc. (Taylor & Hunter, 2015) were acquired by BestBuy in order to differentiate itself from the competition and keep abreast with the current technology.
References
Peprah, E., Lopez-Class, M., Shero, S., John-Sowah, J., & Engelgau, M. (2016). A Global Perspective on Using Implementation Research to Address Hypertension-Associated Target Organ Damage.
Pomeranz, J. L. (2016). Valuing Federal taxation policies to prevent disease and raise revenue. American journal of preventive medicine, 51(4), 518-521.
Taylor, S. A., & Hunter, G. L. (2015). Best Buy and Showrooming: A Critical Thinking Case Exercise Based upon Service Dominant Logic and Value Co-creation. Journal of Creating Value, 1(2), 256-274.
