Company Analysis of Best Buy
TABLE OF CONTENTS
Recent History of Best Buy
Income Statement Analysis
Adapting to Change
Best Buy’s Strategies
Best Buy’s Position within the Industry
Remaining at the top
Becoming main source
Impact of Factors
Common Size Income Statement
Best Buy is currently on top of the electronics retail industry. It is followed by Circuit City and Radio Shack. Best Buys’ total annual sales for last year were $35,934 million, and Circuit City was at $12,429 million (“Competitive Landscape”). If you look at the electronic retail area, which includes Best Buy and Circuit City, you will see that Best Buy is ahead by $23,505 million more dollars than Circuit City.
The factor that makes the biggest impact on the industry of electronic retail is the competition from discounted stores. The stores that sell the same merchandise as Best Buy, but at a cheaper price are what make a huge impact on the industry as a whole. After Best Buy’s last earnings miss, competition from Wal-Mart, Target, and Costco were all cited as culprits, on top of decreasing margins for various products (Lee, 2007). Best Buy’s business strategy centers on meeting individual consumer electronics needs with end-to-end solutions, which involves greater employee involvement and increased services (“Overview”). On the Functional level, Best Buy provides superior customer service upon everything else. Along with great Customer service, the company also tries to keep the retail cost down, so when customers want to buy products they are more able to afford them. Best Buy’s competencies include offering unique services, low prices, and informed/educated employees.
Best Buy has had a bright last couple of years. With many projects on the table and many capable ways to handle new businesses Best Buy seems to just flourish with new opportunities. Best Buy is not just an electronic retail store any longer; it also offers services as well. The most known would be the Geek Squad and the company has also acquired Magnolia Home Theatre. Along with those services, Best Buy also has Best Buy for business, which targets mainly small to medium sized businesses. In 2000, Best Buy enters the online retailing business by launching Bestbuy.com (“Our History”). This was a major opportunity for the company because it was a function that better helped serve the customer. If the store did not have the certain product that the customer was looking for then the employee could refer that customer to Best Buy online so the customer could purchase that product there. In 2001, DSN Retailing Today names Best Buy “Specialty Retailer of the Decade” (“Our History”). This helped the company out tremendously. Consumers want to know that they are getting the best service, deal, and product they can find. When DSN named Best Buy “Specialty Retailer of the Decade,” that made customers want to flock to the stores to see just what the big deal was and when they arrived there they understood. In 2002, Best Buy and the Geek Squad join forces (“Our History”). When Best Buy and the Geek Squad partnered it was monumentous for the company. Not only was Best Buy the leader in the specialty retail industry, now the company was able to provide...
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