Bed Bath & Beyond
Assignment Question 1:
Assessment of BBBY business, operating and expansion strategies
Business Strategy
To offer huge quality branded merchandise at 20% to 40% low prices below department stores. Provide one shop buying by arranging maximum house furnishing items (30,000 SKU) and offer superior service to make buying experience and BBBY so pleasurable that they become “word of mouth advertisers” of BBBY.
Operating Strategy
Store layout, merchandise display and categorization is superb to facilitate easy tracing / location. Individual store managers have liberty to adjust merchandising mix to suit local taste and placing replenishment orders. Purchasing through central office to get maximum margins, low expense structure as there is no use of warehouses advertising is little, stores are located in low cost strip malls and lean corporate organization.
Expansion Strategy
BBBY aims rapid expansion trough opening new stores and enhancing space in existing stores. Stores are not built but leased which gives company a saving of $1 million on each new store. However company emphasizes preserving value during expansion.
Consistency Analysis among Business, Operating and Expansion Strategies
Consistency
All strategies are consistent in maintaining low cost of merchandise and low expense on operations (discounted purchase, lean organization and low capex through leasing, avoiding expenditure on warehouse. The funds spared thus are used in running operation.) Low cost prices and facilitation during whole process of buying gives pleasure to customers and advertise the company the word of mouth.
Inconsistency
Management’s discussion and analysis of financial condition and results reveals that increase in sales is around 80% due to new stores and existing stores sale increase is around 20% (See Bed Bath & Beyond -page 15, 16&17). Also it has been described that any new store gives highest sale in 2nd and 3rd year,
Assessment of BBBY business, operating and expansion strategies
Business Strategy
To offer huge quality branded merchandise at 20% to 40% low prices below department stores. Provide one shop buying by arranging maximum house furnishing items (30,000 SKU) and offer superior service to make buying experience and BBBY so pleasurable that they become “word of mouth advertisers” of BBBY.
Operating Strategy
Store layout, merchandise display and categorization is superb to facilitate easy tracing / location. Individual store managers have liberty to adjust merchandising mix to suit local taste and placing replenishment orders. Purchasing through central office to get maximum margins, low expense structure as there is no use of warehouses advertising is little, stores are located in low cost strip malls and lean corporate organization.
Expansion Strategy
BBBY aims rapid expansion trough opening new stores and enhancing space in existing stores. Stores are not built but leased which gives company a saving of $1 million on each new store. However company emphasizes preserving value during expansion.
Consistency Analysis among Business, Operating and Expansion Strategies
Consistency
All strategies are consistent in maintaining low cost of merchandise and low expense on operations (discounted purchase, lean organization and low capex through leasing, avoiding expenditure on warehouse. The funds spared thus are used in running operation.) Low cost prices and facilitation during whole process of buying gives pleasure to customers and advertise the company the word of mouth.
Inconsistency
Management’s discussion and analysis of financial condition and results reveals that increase in sales is around 80% due to new stores and existing stores sale increase is around 20% (See Bed Bath & Beyond -page 15, 16&17). Also it has been described that any new store gives highest sale in 2nd and 3rd year,