Porter’s Six Forces for Best Buy Co., Inc. Threat of New Entrants: [Low] A physical store can be opened by a new firm if it has capital, warehouse, and an effective supply chain. However, it is difficult to enter the online electronic retailer market as customers would be hesitant to share their information, and competition is intense May 27, · Best Buy Co., Inc. (NYSE:BBY) Q1 Results Earnings Conference Call May 27, , AM ET Company Participants Mollie O'Brien - Vice President, Investor Relations Corie Barry Jun 17, · The Recycled Thermoplastic Market report provides the latest information on all major aspects of the market and is expected to have a significant impact on market trends and performance over the forecast period. An essential aspect is that the report is prepared in such a way that it meets the needs of the customers
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Remember me on this computer. Enter the email address you signed up with and we'll email you a reset link. Need an account? Click here to sign up. Download Free PDF. Best Buy Corporation Strategic Management Analysis Kakie Fitzsimmons.
Download PDF Download Full PDF Package This paper. A short summary of this paper. Best Buy Corporation Strategic Management Analysis. Best Buy Corporation - S. Bensen, A. El Haddi, K. Fitzsimmons, A. Hussein, H. These negative events were the result of governance problems, a changing market landscape cloud computing, music streaming, online purchasing, online gaming, etc.
and a significant leadership best buy co ,inc forces and trends research in a period of crisis. This paper presents strategies to deal with these problems by creating a strategic road map that will first stabilize Best Buy and eventually put it on a growth path. Finally, we recommend that BB explore the formation of an alliance with its rivals and leverage opportunities presented by new markets.
Founded inbest buy co ,inc forces and trends research, BB is a retail consumer electronics business that owns big box and over express stores around the globe.
Best buy co ,inc forces and trends research holdings include CinemaNow, Geek Squad, Magnolia Audio Video, MindShift and Pacific Sales. Best Buy sports a large array of brands as shown in figure 1. Additional performance data is shown in the appendix. InBest Buy pulled out of the UKi, removed the founder and chairman of the boardii, closed many stores, reshuffled management and is trying to deal with its own governance issuesiii, best buy co ,inc forces and trends research.
In addition, BB is facing a significant market paradigm shift towards online e-commerceiv, mobility, cloud computing, internet taxationv, music and video streaming. Marotske -- UST EMBA [2] Figure 1: Best Buy brands.
BEST BUY VALUE STREAMS Organizations can pursue one of the following value streams: Operational Excellence OECustomer Intimacy CI or Product Leadership PL. They must master at least one value stream in order to succeed in the market place. Companies whose objective is CI pursue fine customer segmentation. CI seeks to address the needs of individual customers by delivering the right product at the right place, the right time and at the right price. PL value discipline focuses on designing and delivering a continuous best buy co ,inc forces and trends research of innovative products or services.
Businesses pursuing PL must be creative open minded, embrace external ideas, encourage new ideasbring products to market quickly flexible rapid engineering, agile methods, concurrent product development, rapid marketing and early distribution and they must continuously raise the bar by creating new solutions, new products or by adding new features, best buy co ,inc forces and trends research.
The company fired the vice president of best buy co ,inc forces and trends research and his senior staff. The CFO has resigned and is stepping down in Februaryvi and the CTO and founder of Geek Squad have left as well. Hence, best buy co ,inc forces and trends research, we will focus on existing details and try to predict the future direction.
The problem is that customers often use it to browse in the store, try products, and get questions answered. Best Buy is using focused differentiation by leveraging Geek Squad expertise and knowledge, which is hard for Amazon to imitate due to the personal attention it requires. The technicians also provide lessons to customers without sales pressure Something BB was accused of doing in the past.
Best Buy extends zero financing for years to select consumers The most frequent and large item purchasers. Marotske -- UST EMBA [3] we believe Best Buy is using a hybrid of focused differentiation and focused cost leadership Figure 1. However this competitive advantage may not last as Wal-Mart edges into this business segment and as regulations address the business of credit financing. Competitive advantage COST Uniqueness Competitive scope Figure 1: Hybrid focused cost and differentiation as a competitive advantage Furthermore, Table 1 shows a cluster view of how Best Buy ranks compared to its competitors in terms of OE, CI and PL.
We believe that Best Buy is attempting to be a master of two value disciplines with some successes and misalignments See table 1 for details. A quick scan of the print and social media shows a bureaucratic organization that is not keeping pace with change. The company claims to avoid top down management. Yet, the sales associates who are in direct contact with the customer are not empowered to deal with customer issues; Management has to approve non ordinary issues with transactions even if they impact the customer directly.
A visit to a new store shows that customers may feel lost even after the new initiative of remodeling some stores. It takes more than minutes before an initial contact with the customer It is interesting that the older stores had a greeter and the initial contact happened within 15 seconds of entering the store.
The company is in a consumer electronics sea change and a paradigm shift accelerated by changes to cloud computing, music and movie streaming, online purchasing, internet tax and credit card legislation. Hence, the corporation is in a slow re-invention and reactive modes. For these reasons, we believe that the company is focusing on Operational Excellence first and on Customer Intimacy second Figure 2.
In October, the company reshuffled its operations management by laying off the veteran operations management and a new focus on mobility, customer service and online retail emerged as a new goal. PL Figure 2. Best Buy as a master of Operational excellence and nearly a master of customer intimacy. The company also had some initiatives in product innovation that failed. OE CI CI Figure 2: Best Buy Value Streams 3.
SWOT ANALYSIS Strengths, Weaknesses, Opportunities and Threats : A detailed SWOT analysis is shown in table 2. The following is a SWOT summary. Marotske -- UST EMBA [4] 3. Apple stores in malls.
TOWS MATRIX AND STRATGIES Based on our SWOT analysis, we developed a TOWS matrix see table 3and as a result, we propose the following strategies. Marotske -- UST EMBA [5] share. Furthermore, In Best Buy acquired MindShift Technologiesviii, a managed services and iCloud services company for business owners and customers.
Combined with the Geek Squad technology expertise, Best Buy can leverage these factors to differentiate offerings from other traditional brick and mortar consumer electronics stores. Best Buy must continue being on the front lines for social and mobile consumers. We also recommend that the company develop an aggressive international growth plan in markets with rising discretionary incomes and laws mandating shifts to high definition frequencies.
The corporation must re-vitalize its enterprise wide training about new technology and perform an internal audit of how they are using their Big Data and Analytics initiatives to make thoughtful strategic decisions, best buy co ,inc forces and trends research. It is imperative that BB take advantage of its own consumer insights and market intelligence to anticipate changing trends.
BB does not have a published mission or vision statement on its website. The organization should create a new, compelling mission and vision that gets employees excited, re-energized and engaged. To be competitive, a clarification of value streams is needed i.
for OE treat stores as additional channel of distribution; for CI ensure items are available to deliver when purchased by the consumer, empower associates, custom choices through online near infinite selection etc. This should be done by leveraging a concentric diversification strategyix and understanding how other cultures use retail and mobile technology differently than North Americans i. mobile payments, money transfer, pay as you go, etc.
BB may face state owned or supported monopolies in mobile technologies. Thus, it must explore cooperation with state capitalism drivers as a market penetration tactic. This will differentiate BB from Wal-Mart, Apple, Amazon and others. BB must also ideate innovative strategic alliances and partnerships with other companies and organizations that align with the brand.
Marotske -- UST EMBA [6] 4. Not long ago its largest competitor, Circuit City, folded. Best Buy will have to first leverage the new consumer habits of mobile shopping and cloud computing. The effective execution of these strategies could and should help propel Best Buy to remain among the leaders in consumer electronics, best buy co ,inc forces and trends research. However, the future of the company remains uncertain. We recommend a directional strategy that is a blend of stabilization, retrenchment and growth with an emphasis on Growth.
Best Buy has a strong internet presence, an extensive cyber infrastructure and brand image. The company will use its existing infrastructure and idle network and computer time to service a big need of small to medium businesses SMB : selling their goods and services online world wide and delivering managed services around produced solutions The target market includes software companies, game developers, small music and movie producers BB will be a virtual processor, a technology provider and a fulfillment partner that leverages best buy co ,inc forces and trends research own infrastructure to offer e-commerce, automatic payments and online distribution for the SMB companies who are not in a position to sell directly to the same customer segment targeted already by BB.
Marotske -- UST EMBA [7] Project Name and Objectives Project Name: Internet Affiliate Marketing and Services Project Objectives: Provide virtual stores and marketing for small to medium technology companies that target the same segments targeted by BB for complementary products. Project managers: Marketing: Interactive marketing manager The lead project manager The trio will design a solution that will must be hired from outside CTO: iCloud CTO provide services for small to medium to bring in new ideas.
The technology companies to deliver manager must be a product Customer Service: Geek solutions to the market place. The development manager. The Squad Service managers will work across boundaries manager must have and lead strategy making.
experience in cloud and mobile computing and online retail. Best Buy Services Provide internet services, online ecommerce. Geek Squad and Managed IT services will provide premium professional services around a select number of technologies sold directly through the online stores and delivered by affiliates. Structure of operation The unit will operate as a startup within BB.
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, time: 0:16Is Best Buy (BBY) Stock Undervalued Right Now?
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