Best Buy Case Analysis
BEST BUY
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CASE ANALYSIS BEST BUY INC – DUAL BRANDING IN CHINA
Q1. What is Best Buy’s competitive advantages in US? Best Buy’s competitive advantages in US includes: customer centricity, the SOP system and Geek Squad. Best Buy implements a concept called centricity. Best Buy identifies customers generating most revenue and segment these customers then realigning the stores to meet the needs of these customers. Its market researchers will analyze a lot of sales and demographic data to determine a particular location should tailor to which group of people in what kind of format. Centricity enhances a always consumer- friendly environment and helps in providing better end user experience. Best Buy established a standard operating platform (SOP), which included procedures for inventory management, transaction processing, customer relations, store administration, products sales and merchandising. SOP helps ensure consistence and enforce discipline across the network of stores. When Best Buy spotted the trend that digital devices and home networks were growing in complexity and technical services to homes and small businesses is necessary while many of its competitors did not provide service back-up for their CE sales. Best Buy acquired a Geek Squad, which is specializing in repairing and installing PCs and staffed the stores by newly techies. Best Buy can provide backup service for its customers which is an advantage over its competitors. All in all, Best Buy’s distinct competitive advantage is that it focuses on the need of customers and always tries its best to provide the most required service for the customers. Q2. Why is Best Buy’s dual branding is successful in Canada? Firstly, Canada’s market was fragmented with the leader Future Shop having 15% of market share. There was room for a second brand. Secondly, the Future Shop and Best Buy are both well established brand with high brand awareness and their positioning was totally different. Future Shop
Page 1
CASE ANALYSIS BEST BUY INC – DUAL BRANDING IN CHINA
Q1. What is Best Buy’s competitive advantages in US? Best Buy’s competitive advantages in US includes: customer centricity, the SOP system and Geek Squad. Best Buy implements a concept called centricity. Best Buy identifies customers generating most revenue and segment these customers then realigning the stores to meet the needs of these customers. Its market researchers will analyze a lot of sales and demographic data to determine a particular location should tailor to which group of people in what kind of format. Centricity enhances a always consumer- friendly environment and helps in providing better end user experience. Best Buy established a standard operating platform (SOP), which included procedures for inventory management, transaction processing, customer relations, store administration, products sales and merchandising. SOP helps ensure consistence and enforce discipline across the network of stores. When Best Buy spotted the trend that digital devices and home networks were growing in complexity and technical services to homes and small businesses is necessary while many of its competitors did not provide service back-up for their CE sales. Best Buy acquired a Geek Squad, which is specializing in repairing and installing PCs and staffed the stores by newly techies. Best Buy can provide backup service for its customers which is an advantage over its competitors. All in all, Best Buy’s distinct competitive advantage is that it focuses on the need of customers and always tries its best to provide the most required service for the customers. Q2. Why is Best Buy’s dual branding is successful in Canada? Firstly, Canada’s market was fragmented with the leader Future Shop having 15% of market share. There was room for a second brand. Secondly, the Future Shop and Best Buy are both well established brand with high brand awareness and their positioning was totally different. Future Shop