Best Buy Case Study

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  • Topic: Best Buy, Online retail companies of the United States, Geek Squad
  • Pages : 8 (2031 words )
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  • Published : February 16, 2013
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Best Buy
Case Study Review

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Brad Dexheimer
BA 790 – Spring 2013
Professor James Mastrangelo
January 30, 2013
TABLE OF CONTENTS

Executive Summary ......................................................................................3

Problem/Opportunity Statement .................................................................4

External Environment Analysis ..................................................................5 Demographic ..........................................................................................5 Economic ................................................................................................5 Political/Legal .........................................................................................5 Sociocultural ...........................................................................................6 Technological ..........................................................................................6 Global ......................................................................................................7 Physial .....................................................................................................7

Five Forces Analysis .....................................................................................8

Conclusion .....................................................................................................9

Implementation .............................................................................................10

Bibliography ..................................................................................................11

Executive Summary

Best Buy is an international retailer of consumer electronics, home office products, entertainment software, appliances, technology, mobile phone products and services. Best Buy has operations in the United States, Canada, Mexico, China, and Europe. North America accounts for 1,400 of the stores and there are over 2,600 stores in China and Europe (Hitt, Ireland, & Hoskisson, pg.57, 2011). In the United States, Best Buy is the largest consumer electronics retailer with reported revenues of $37.1 billion in 2011 (Hitt, Ireland, & Hoskisson, pg.62, 2011).

Best Buy has outlasted their major competitors, CompUSA (2007) and Circuit City (2009), in the face of a recession and a reduction in consumer discretionary spending. With Best Buy emerging as the giant in consumer electronics from a brick and mortar viewpoint, they are faced with declining marketshare to companies such as Amazon, eBay, WalMart, and Costco.

Best Buy must not get into price wars with their competition, as it will be very difficult for them to compete with the likes of Wal-Mart. It is also important for Best Buy to sell the “shopping” experience, customer service, and customer support to help them regain marketshare from their on-line competitors. The following pages will help give Best Buy direction on how to compete succsussfully in the demanding market of consumer electronics.

Problem/Opportunity Statement

Even though Best Buy is the industry leader in consumer electronics, they continue to lose market share to online competitors such as Amazon, eBay, and other brick and mortar stores of Wal-Mart and Costco who are selling the same product for less. Amazon currently has an app that allows you to scan the barcode of a product and see what the price is on Amazon. This has led to the unfortunate nickname for Best Buy as “Amazon’s Showroom” (Hitt, Ireland, & Hoskisson, pg.57, 2011). Looking at the table below, you can see that between 2008 and 2009, Amazon gained what Best Buy lost in market share.

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Source: www.retrevo.com

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