Bestbuy's Strategy

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In the last few years, BestBuy has been experiencing fierce competition and has been fighting to gain dominance in the consumer electronic market. Apple, Amazon, Wal-Mart, and Target are the current competitors that are giving them the most problems. A lot of people are coming into BestBuy’s stores to try out the products and then leaving the store to buy online or at a slightly cheaper price. C.E.O, Brian Dunn, is left with many questions about keeping customers in his stores and how to develop and sustain a competitive advantage in today’s economy. According to the case, BestBuy is trying to create a competitive advantage in three areas: customer-centricity, employment policies, and exclusive branding. After studying the VRIO framework, I have found that BestBuy’s three areas of strategy do fit into the VRIO framework. BestBuy believes that an effective strategy is a commitment to customer-centricity. A business that implements customer-centricity caters to specific customer needs and behaviors. According to the book, BestBuy wants to steer away from a product-centered marketing approach to a more customer-oriented marketing approach which will have them asking what problems its customers are facing, and then providing solutions. Furthermore, BestBuy wants to segment its customers into four different profiles: Upscale Suburban, Urban Trendsetter, Empty Nesters, and Middle America. In different regions around the U.S. you will find these diverse groups. BestBuy has been able to utilize the rare attribute of the VRIO framework with its ability to serve the needs of the predominant customer segment in a given region. BestBuy is unlike any company in the consumer electronic industry because as the book mentions, “Nearly all companies claim to be customer oriented, but being customer centric required a radical reorganization and shift in employee mindset.” BestBuy has reformatted the physical space in its stores and related products have been bundled together to...
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