Best Buy Case Study
Best Buy Case Study
Jeffrey Casale
Best Buy Case Study
Introduction
Best Buy is the world’s largest consumer electronic retailer with over $40 billion in revenue, 1,300 stores and 150,000 employees at the end of 2008 with a US market share of 21% (1). Best Buy’s humble beginnings go back to 1966 in Saint Paul Minnesota where a small audio specialty store named The Sound of Music was opened. Over the course of the last 43 years the world of consumer electronics have changed tremendously, but the one thing that has been successful in the growth of the company is Best Buys approach to meeting the consumer’s needs.
The Journey to Customer-centricity In June 2002 Brad Anderson, an employee of the company since 1973, became CEO of Best Buy. A post 9/11 economy was in place causing sluggish sales caused the Best Buy stock to turn downward. On top of that retailers like Wal-Mart and Costco were placing more emphasis on their consumer electronics divisions making these retailers more direct competition. With the growing complexity of the digital devices and computers and home networks one marketing approach that Anderson figured would be a way to edge out the completion was to offer a solution to customers who may have a need for technical services he felt Wal-Mart and other retailers could not provide. In October 2002 Best Buy purchased a small company that specialized in such services call Geek Squad. At the time Best Buy estimated the small businesses market to be upwards of $20 billion dollars a year (2). This certainly was a strategic approach to offer solutions for customer’s they would not get from the competition. The first year saw 20 stores with the Geek Squad available, and by the end of 2005 every store had a Geek Squad.
Anderson also looked for ways for continued growth aside from the traditional sense of having to rely on building new stores. Best Buy had traditionally seen healthy growth of 20 percent year so that added to
Jeffrey Casale
Best Buy Case Study
Introduction
Best Buy is the world’s largest consumer electronic retailer with over $40 billion in revenue, 1,300 stores and 150,000 employees at the end of 2008 with a US market share of 21% (1). Best Buy’s humble beginnings go back to 1966 in Saint Paul Minnesota where a small audio specialty store named The Sound of Music was opened. Over the course of the last 43 years the world of consumer electronics have changed tremendously, but the one thing that has been successful in the growth of the company is Best Buys approach to meeting the consumer’s needs.
The Journey to Customer-centricity In June 2002 Brad Anderson, an employee of the company since 1973, became CEO of Best Buy. A post 9/11 economy was in place causing sluggish sales caused the Best Buy stock to turn downward. On top of that retailers like Wal-Mart and Costco were placing more emphasis on their consumer electronics divisions making these retailers more direct competition. With the growing complexity of the digital devices and computers and home networks one marketing approach that Anderson figured would be a way to edge out the completion was to offer a solution to customers who may have a need for technical services he felt Wal-Mart and other retailers could not provide. In October 2002 Best Buy purchased a small company that specialized in such services call Geek Squad. At the time Best Buy estimated the small businesses market to be upwards of $20 billion dollars a year (2). This certainly was a strategic approach to offer solutions for customer’s they would not get from the competition. The first year saw 20 stores with the Geek Squad available, and by the end of 2005 every store had a Geek Squad.
Anderson also looked for ways for continued growth aside from the traditional sense of having to rely on building new stores. Best Buy had traditionally seen healthy growth of 20 percent year so that added to
References: / Work Cited 1. Connected World- Fiscal 2008 Annual Report/ Best Buy 2.Best Buys Giant Gamble http://money.cnn.com/magazines/fortune/fortune_archive/2006/04/03/8373034/index.htm 3.Best Buy accelerates Customer Centricity Transformation http://communications.bestbuy.com/pressroom/includes/releases/May3newsrelease.pdf