Best Buy Fights Against Electronic Waste INTRODUCTION
Although Best Buy has not been in business as long as other established brands, the company is becoming a well-known name both within and outside of the United States. This consumer electronics retailer is considered to be the largest specialty retailer within its sector throughout the U.S. with 21 percent of the market. With the bankruptcy of its main competitor Circuit City, Best Buy is geared to gain an increased market share and is looking for new opportunities in countries like China and Mexico. In addition to discounted products and high-quality goods, Best Buy has become known for its customer-centric approach and sustainable outreach. After realizing the importance of sustainability to its customers, Best Buy implemented an extensive recycling program to meet customer desires. In the process, Best Buy has earned itself a name as a socially responsible company. Best Buy has also adopted programs and systems, including the ROWE system, to provide flexibility and aid to its employees. As a result of its corporate and social responsibility initiatives, Best Buy has been awarded numerous honors, including the Corporate Responsibility Officer’s 2009 100 Best Corporate Citizens, Ethisphere’s 2009 World’s Most Ethical Companies, and the Reputation Institute’s 75 Most Reputable Companies in the U.S. This case will provide a brief history of Best Buy, including details on its expansions and the models it has implemented to become the success it is today. Next, the vision of Best Buy will be discussed along with the actions Best Buy is undertaking to turn its vision into a reality. A brief analysis of Best Buy’s community outreach programs will also be provided. Finally, we will look at Best Buy’s large-scale environmental initiatives, particularly regarding energy savings and recycling. HISTORY Best Buy Inc has undergone several changes over its 40-year history. The company was founded by Richard Schulze, who specialized in consumer electronics. After working as a consumer-electronics manufacturer’s rep, Schulze recognized that a demand existed among college-age consumers for audio equipment. In 1966 he opened an audio specialty store called Sound of Music in the Twin Cities area. A year later, the company acquired the Kencraft Hi Fi Company. Schulze opened two additional stores and had an initial yearly income of $173,000. The company would continue to grow and flourish over the next few years, hitting $1 million in annual revenue by 1970. Best Buy’s equipment was originally targeted toward college students who desired electronic goods at the higher end of the spectrum. However, due to increasing competition in the consumer electronics industry during the 1970s, Schulze realized his stores would have to adapt to compete effectively. 2
In 1983, Schulze decided to convert his Sound of Music stores into a high-volume discount chain selling electronics, consumer appliances, and videocassette records. He renamed this chain Best Buy. However, competition remained fierce from companies such as Sears and Wards, and Schulze was once against forced to innovate. He came up with an entirely new model that would revolutionize the retail industry as a whole. The changes that Schulze implemented included eliminating the backrooms of all stores, bringing all merchandise onto the floor, paying salespeople hourly wages rather than commissions, and retraining salespeople to become more customer-focused. Best Buy Inc also embarked upon partnerships and acquisitions to increase its market share. Best Buy acquired the computer repair service The Geek Squad along with Magnolia Audio Video and Pacific Sales. With the downward trend in computer sales in the 2000s, Best Buy embraced what it calls Concept 5 stores—companies that would not only sell products but teach consumers how to use them. With the acquisition of companies like The Geek Squad, Best Buy furthered this goal and significantly...
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