Best Buy Situation Analysis

Topics: Retailing, Best Buy, Marketing Pages: 8 (1983 words) Published: October 9, 2014


Best Buy Situation Analysis

Company Overview
Best Buy Inc. is a United States based multinational organization that operates as a consumer electronics retail store. It was founded in Richfield Minnesota in 1966 originally under the name Sound of Music Inc. The name was changed in 1986 in order to focus on consumer electronics. Best buy conducts business activities in retail stores, online, and call centers. It has 1,968 stores worldwide located in the United States, Canada, China, Puerto Rico, and Mexico. In general, the company specializes in selling electronics, home office products, entertainment products and software, business programs and software, home appliances, and much more technology related products.

Best Buy has earned the reputation as one of the top consumer electronics retailers and a leader in the industry. Its total revenues are $42,410,000,000, it employs 140,000 workers, and has a market capitalization of 11.26 billion. The company is a publicly traded corporation on the New York stock exchange under the signal- BBY. It has gained many product and service brands that are recognized worldwide, such as Geek Squad, an in house repair service, which has been one of the company’s main competitive advantages throughout its existence. “The primary target market customer is in the 16-35 age range, with 18-24 being the primary target because on average 40% are in college. Primary targets consist of businesses, both genders, middle class families and up. The secondary target is 36-50 age groups mostly made of parents, new and small businesses, and price concerned consumers. The age group for the core audience is 25-54 consumers 54% male 42% female and has an average household income of $75,000 (Khan, A).” Mission: The mission of Best Buy is to be the number one retailer of consumer electronics with a focus on providing a wide selection of high quality products at premium low prices while offering personable customer service and the best shopping experience both in store and online. Goals: In the company’s 2014 fiscal annual report, Hubert Joly, President and CEO of Best Buy, outlined the business transformation plan and goals as the company progresses into the near future: 1. Reinvigorate and rejuvenate customer shopping experience

2. Attract, grow, engage, and inspire transformational leaders and employees 3. Work with vendors to innovate and drive value
4. Increase return on invested capital
5. Continue leadership role in positively impacting the world

Ochs 2
Core Competency: In terms of core competency, the key in terms of success for Best Buy has been its strategic customer-centric values and brand name recognition. Best Buy specializes in providing excellent customer service and the ability to give customers a hands- on shopping experience. Best Buy offers a wide range of products and will continue to work with vendor partners to maintain a strong relationship to guarantee low competitive prices. As far as brand recognition goes, Best Buy is increasing the amount of stores worldwide each year so the company name will continue to stick in customer’s minds as well as strategic partnerships such as geek squad. SWOT Analysis

Internal Factors Strengths
Multiple Channel Sales Strategy
Diverse Product Portfolio
Reputable Brand Name
Excellent Customer Satisfaction

Weaknesses
Geographical Concentration Limitations
Reliance on Minimal Vendors
Weakening Financial Position
Poor Inventory Management Systems

External Factors Opportunities
Strategic Partnership Acquisitions
Focus Towards Marketing Strategies
Online Sales Growth
Consumption of Electronics Increasing
Expansion of Retail Stores National and International – Foreign Market Penetration Threats
Rise of Competitors, Loss of Market Share and Revenues
Increase of Counterfeit/Imitation Goods (China)
Organized Retail Crime Increasing, Cyber Crime Threat to Security Market Shifting to Online Sales...
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