Best Buy Analysis

Topics: Best Buy, Consumer electronics, Geek Squad Pages: 42 (12713 words) Published: March 20, 2014

Table of Contents
1. Executive Summary 3
2. Situation Analysis4
a. Company4
i. History4
ii. Best Buy Today 7
iii. Best Buy’s New Leadership8
iv. Organizational Structure10
b. Best Buy’s Industry18
c. Best Buy’s SWOT Analysis19
i. Porter’s Five Forces20
d. Capabilities and Processes22
3. Customers 23
4. Products and Services27
5. Industry Context30
6. Best Buy Competitors32
a. S.W.O.T. Analysis of Competitors32
i. RadioShack33
ii. Game Stop 35
iii. Staples36
7. Financial Ratios38
8. Collaborators38
9. Growth Strategy39
a. Goals and Objectives40
b. Segmentation41
c. Targeting44
d. Positioning45
10. Strategic Execution46
a. Product46
b. Place49
c. Promotion52
d. Pricing53
11. Capital Budgeting Analysis55
12. Prices and Inventory 56
13. Implementation and Timing56
a. Pro Forma57
b. Scenario Analysis59
c. Sensitivity Analysis60
14. Conclusion61
15. References63
Executive Summary
According to the Best Buy’s corporate website, the company’s “unofficial” mission statement is simple, “We’re a growth company focused on better solving the unmet needs of our customers.”1 Upon reviewing this statement, our team was motivated to construct a unique plan that expands Best Buy brand and influences new target markets, while also continuing to provide growth and development in Best Buy’s products and services. Our initiative is to develop smaller stores that feature a condensed selection of consumer electronics, these stores will be strategically placed in areas where customers have unmet needs. The products, services, and staff offered will, high quality and knowledgeable service. These condensed stores will focus on the newest and most popular consumer electronics for our youthful audience. Additionally, through these operations, customers will continue to receive helpful information and technological services. These stores will be primarily located in towns with an influx of consumer’s aged 18-30. Our strategy involves targeting college students and their parents. Our customers will still be provided the “Best Buy Renew Experience” with a reputable and knowledgeable staff that can any questions about products and services. To reinforce out strategy we have provided pricing strategies, estimating the expected rate of return, and other ratios. Our strategy involves expanding Best Buy locations and offerings; reaching a new customer segment, create a new, and powerful revenue stream. As with any new venture, however, there are many risks that our team had to acknowledge.

Situational Analysis
About Best Buy
Best Buy Co., Inc. (NASDAQ: BBY) together with its subsidiaries is a multinational retailer of consumer electronics, entertainment products, small and major appliances, and cellular phones. Best Buy currently operates on a global scale; its international operations include the U.S., Canada, China, Europe, and Mexico. This corporation has a multitude of products and services under eleven brand names: Best Buy, Five Star Appliances, Future Shop, Magnolia Audio Video, The Carphone Warehouse, Best Buy Mobile, Audiovisions, and Pacific Sales. Best Buy also offers technology services; this includes support, repair, troubleshooting and installation through the Geek Squad brand.2 Best Buy is currently headquartered in Richfield, Minnesota and has approximately 165,000 employees worldwide and has 4,370 total stores operating worldwide.2 Best Buy operates with a corporate vision stating, “People, Technology, and the Pursuit of Happiness.” This vision represents the core values of Best Buy. This company invests in its people, from “unleashing the power” of their employees, to...

References: 2. Best Buy. 2013 Annual Report: FORM 10-K. Richfield, MN: Best Buy Co. Inc., United States Securities and Exchange Commission. Washington, D.C., 2013.
4. Rotterdam, Adam. “Best Buy Co., Inc.: Sustainable Customer Centricity Model.” 2010 School of Management, Erasmus University and Bentley University. RSM Case Development Centre (2010). October 10, 2013.
8. Weisenthal, Joe. “Best Buy Share Have Been On An Insane Tear In 2013.” Business Insider 20 Aug. 2013.
10. “Best Buy Co., Inc. (BBY).” Yahoo Finance. Yahoo. 19 Nov. 2013.
12. Kerin, Roger A., Steven W. Hartley, and William Rudelius. Marketing The Core. 5th ed. N.p.: McGraw-Hill, 2012. Print.
13. Steiner, Ina. Ecommercebytes. Web. 12 Oct. 2013.
15. Reuters. N.p., n.d. Web. 1 Nov. 2013. .
17. Reuters. N.p., n.d. Web. 1 Nov. 2013. .
18. MarketWatch. The Wall Street Journal, n.d. Web. 5 Nov. 2013. .
19. MarketWatch. The Wall Street Journal, n.d. Web. 5 Nov. 2013.
21. Yahoo Finance. Yahoo, n.d. Web. 6 Nov. 2013. .
24. American Fact Finder. U.S. Census Bureau, June 2013. Web. 13 Nov. 2013. .
25. Labus, Peter. “The Supply Chain of Best Buy” google, 31 Mar. 2008. Web. 22 Oct. 2013.
29. Seeking Alpha. N.p., 5 Dec. 2012. Web. 7 Nov. 2013. .
30. Morningstar. N.p., 31 Oct. 2013. Web. 4 Nov. 2013. .
31. Morningstar. N.p., n.d. Web. 4 Nov. 2013.
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