Walmart Essay

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The promise of the long-awaited digital revolution has finally been fulfilled. Flat-panel televisions, MP3 players, wireless laptops, cell phones with Internet browsing capability, wirelessly networked computing devices for the home, digitally controlled home appliances, and more are no longer the toys of a future generation. They are here today, and Best Buy wants to sell them—all of them—to anyone with the money to burn on such luxury items. In addition to all the gee-whiz electronic merchandise, the company still sells coffee makers, vacuum cleaners, and washing machines, albeit slightly more expensive ones than before.

The new digital gadgets, however, are fast crossing the threshold from expensive luxury items to affordable common electronics. The upside is that more customers are able to buy such products; the downside is the negative pressure put on prices and revenues. If any retailer can find a way to survive and turn a profit in the fiercely competitive electronics and home appliance industry, it’s Best Buy. Twenty years ago, when it operated under the name Sound of Music, a tornado ripped through its flagship store, and the company held a “best buy” sale to liquidate its merchandise and cover the costs of repairs. The success of the sale was the impetus for the name change to Best Buy, and the opening of its first superstore in 1984 marked the beginning of “big box” retailing as it is known today. Nine years later, the new look national chain surpassed Circuit City as the number one retailer in the segment. Best Buy’s stores offer a dizzying array of products (its stores have nearly 25,000 separate items) at affordable prices.

Usually located in a small- or medium-sized outdoor shopping centers with other “big box” retailers, an average 40,000-square-foot Best Buy store is large enough to hold ample stock of all available items while still comfortably accommodating customers. Bright lights, concrete floors, wide...
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