Best Buy Case Study
Empire State College
Best Buy Case Study 2
Best Buy is one of the world's largest and most diversified retailers of home office products, consumer electronics, and entertainment software with $16.62 billion in annual revenue as of February 26, 20111 (wikipedia.org). This paper scrutinizes how in spite of a global economic recession, Best Buy continues to generate increased in-store sales. How their use of in-store analytics attributed to their continued success in a maturing and overly saturated industry. This case study provides a SWOT analysis which solidifies Best Buy’s place in this global economy.
Best Buy Case Study 3
Best Buy is one of the world’s largest multi-faceted electronic retail stores. Best Buy currently boasts 4,100 stores world-wide2 (answers.com) including an additional 100 Best Buy Express Shops or Zoom Stores located in airports and mall in the United States3 (wikipedia.org). Best Buy went from a single store named Sound of Music in 1966 to a multi-billion dollar enterprise.
As the company grew, Best Buy had to come up with a way to differentiate themselves from the competition i.e. Wal-Mart, Target and Costco’s, just to name a few. By implementing something called customer centricity, Best Buy has certainly distinguished the brand. Customer centricity is defined as fundamentally aligning a company’s products and services with the wants and needs of its most valuable customers4 (wikipedia.org). The stores are built around customer needs and extensive customer research has been done in order to apply the concept of customer centricity.
Even as the market took a down turn, Best Buy was still able to turn a profit because of their new approach to running their business and especially their stores. Best Buy purchased other companies like Geek Squad and Magnolia Home Theater5 (Marketing, 10th Edition pg. 136) to make for a more robust shopping experience.
Best Buy Case Study 4
Although Best Buy’s presence in the electronic market increased in the 1980s and 1990s, Best Buy found that their expenses out weighted their profits. This realization prompted Best Buy to take a closer look at their business model. Best Buy decided to embrace a customer centric business model and implement it in their stores.
They started by figuring out who their customers really were. Brad Anderson, Best Buy’s CEO, enlisted the help of Columbia University’s Larry Seldon to present his theory of customer centricity. Initially, Best Buy stores where male-oriented with loud music and a mostly all male staff. After completing their research, Best Buy discovered that women influenced 89 percent of all purchases and wielded $68 billion in buying power6 (Marketing, 10th Edition pg. 136).
The stores segments were broken down as follows:
1. Barry: The affluent professional who wants the best technology and entertainment, and who demands excellent service7 (Marketing, 10th Edition pg. 136). 2. Jill: The prototypical “soccer mom” who is a busy suburban mom who wants to enrich her children’s lives with technology and entertainment8 (Marketing, 10th Edition pg. 136). 3. Carrie and Buzz: The “early adopter,” active, younger customer who wants the latest technology and entertainment9 (Marketing, 10th Edition pg. 136). 4. Ray: The “practical adopter” who is a family man who wants technology that improves his life through...