Best Buy Internal and External Analysis

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  • Topic: Best Buy, Geek Squad, The Carphone Warehouse
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Internal Analysis: Core Competencies, Strengths and Weakness The (RCC) / VC model is used to determine how Best Buy bundled its resources to create capabilities and how these capabilities become the company’s core competencies which will be their source of competitive advantage.

TANGIBLE RESOURCES
Financial Resources
- Revenue growth slowed to a miniscule 1.6% over the course of fiscal year 2011. - Domestic revenue reaches $37.1 billion while International revenue reaches $13.1 billion in 2011. - Majority of Best Buy acquisitions of foreign electronics companies have been profitable. - Domestic sales contribute 74% of the total gross revenues- $37.2 million compared to $13.1 billion from the international segment. - Total revenue has been increasing over the years from $45,015 to $49,694 to $50,272 during the period of 2009 to 2011. - From 2007 to 2010, international gross revenue increased an average of 15% per year as opposed to less than 6% in the domestic segment.

Best Buy has positive growth from 2007 to 2010. However these growths falls below S&P retailing group and S&P 500.

Organizational Resources
- Richard Schulze buys out his partner in the 70s.
- Brad Anderson took over the position as CEO when Dick Schulze resigned. - Brian Dunn accepted the position as CEO in 2009 when Brad Anderson retired. - 65% institutional and mutual fund owners, 19% insiders and large-block shareholders with the remaining shares held by various investors.

With the great fore sight of the Richard Schulze, he managed to find Brad Anderson and thereafter Brian Dunn to succeed as CEO. The experience of them enables Best Buy to become leaders in the industry. Physical Resources

- Best Buy has 1,400 stores in North America and over 2,600 stores in Europe and China. - Superstores in Canada, China, Europe, Mexico and Turkey and converted the outlets in China to Five Star branded stores. - The first big box store was opened in 2010 and another 9 stores by the mid-year mark in 2011. - Best Buy Mobile offers phones like Apple, Motorola, LG and Samsung, and sells service contracts with major providers like Verizon, AT&T, T-Mobile, and Sprint as well as contract free phones through Boost Mobile, Virgin Mobile, and MetroPCS. - Domestic acquisitions include Magnolia Hi-Fi, the Musicland Group, Pacific Sales Kitchen and Bath Centers, Napster, Geek Squad and Speakeasy. - International acquisitions include Future Shop, Five Star Appliance, 50/50 venture with Carphone Warehouse. - Stores are designed to be one-stop shops that meet all of the customer electronics and home appliance needs of its customer with brands like Sony, Apple and Samsung as well as LG and Insignia. - The Geek Squad branch of Best Buy also offers after-sale services including installation, repair and technical support. - The Carphone Warehouse offers cell phone, service contracts, and small computing devices and sales of device insurance.

The expansion by Best Buy will enable them to show their brand exposure. The acquisition also provides value added services to Best Buy’s customer. This way, they can differentiate from their competitors.

Technological Resources
- Set up a website called BestBuy.com to claim its stake to the online market. - Bestbuy.com provides 24/7 human customer assistance, user forums, professional and customer reviews, and optional in-store pickup.

Best Buy makes use of their technology to integrate with the in-store experience. By having a website, consumers can do research at their free time and proceed to their store to make purchases directly.

INTANGIBLE RESOURCES
Human Resources
- Highly knowledgeable commissioned sales staff.
- Dick Schulze resigned from CEO in 2002 and continued to be a driving force as Chairman of the Board. - Training of designated staff to provide consultation services to business purchasers as well as showcasing products specifically designed for business applications. - Hiring...
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