best buy corporation strategic managemen

8/18/2019 Best Buy Corporation Strategic Managemen

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Best Buy Corporation - S. Bensen, A. El Haddi, K. Fitzsimmons, A. Hussein, H.

“Best Buy Corporation: Strategic Management Analysis”

S. Bensen, A. El Haddi, K. Fitzsimmons, A. Hussein, H. Marotske

Strategic ManagementUniversity of St !omas, "ollege of Business

E#ecutive MBA $rogram, "o!ort %&

Abstract

Best Buy’s news coverage of the last few years has been consistently negative. The company’s performance and

reputation suffered greatly. Its Earnings per Share fell by more than 200 in 20!2 alone. These negative events were

the result of governance problems" a changing mar#et landscape $cloud computing" music streaming" online

purchasing" online gaming" etc.% and a significant leadership turnover in a period of crisis. The company’s value

stream is in a state of flu& and could be said to be a master of none at this time. This paper presents strategies to deal

with these problems by creating a strategic road map that will first stabili'e Best Buy and eventually put it on a

growth path. (s a result of our analysis" we recommend that the company employs new strategies that include

growing its online business by capitali'ing on )ee#* S+uad’s e&pertise and e&ploring an internal fi&*it strategy with

the development of a compelling mission and vision. ,inally" we recommend that BB e&plore the formation of an

alliance with its rivals and leverage opportunities presented by new mar#ets.

1. INTR!"CTIN

!e $ur$ose of t!is $a$er is to e#amine Best Buy's (BB) strategies using S*+, +*S

and value stream analysis. t $ro$oses -usiness strategies t!at can mitigate BB's current

organizational $ro-lems and im$rove its com$etitiveness.

Founded in /%%, BB is a retail consumer electronics -usiness t!at o0ns 12 -ig -o# and over

22 e#$ress stores around t!e glo-e. ts !oldings include "inema3o0, 4eek S5uad, Magnolia

Audio 6ideo, MindS!ift and 7acific Sales. Best Buy s$orts a large array of -rands as s!o0n in

figure . Best Buy's com$etitors include Amazon, *almart, 8adio S!ack and t!e 0orld of online

retailers.

As of t!is 0riting, sales are flat around 12 Billion dollars and its gro0t! is declining from

an average "A48 of 9:. ts earnings $er s!are !ave declined -y more t!an &22: in t!e last year.

Additional $erformance data is s!o0n in t!e a$$endi#). n &2&, Best Buy $ulled out of t!e UK i,

removed t!e founder and c!airman of t!e -oardii, closed many stores, res!uffled management and

is trying to deal 0it! its o0n governance issuesiii

. n addition, BB is facing a significant market $aradigm s!ift to0ards online e;commerce

iv, mo-ility, cloud com$uting, internet ta#ation

v, music

and video streaming. n section & 0e discuss t!e value streams, follo0ed -y a S*+, a +*S

and 0e finally $ro$ose several strategies to address Best Buy's stagnation issues.


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#igure 1: Best Buy -rands.

$. B%ST B"& 'A("% STR%AMS

+rganizations can $ursue one of t!e follo0ing value streams< +$erational E#cellence

(+E), "ustomer ntimacy (") or 7roduct =eaders!i$ (7=). !ey must master at least one value

stream in order to succeed in t!e market $lace.

2.1 'alue streams )e*ine)

+rganizations t!at $ursue +E lead in over!ead cost minimization and convenience ma#imization

-y designing and de$loying $rocesses and systems t!at drive efficiency 0!et!er in $roduction or

in delivery of goods or services.

"om$anies 0!ose o->ective is " $ursue fine customer segmentation. " seeks to address t!e

needs of individual customers -y delivering t!e rig!t $roduct at t!e rig!t $lace, t!e rig!t time and

at t!e rig!t $rice. 7= value disci$line focuses on designing and delivering a continuous stream of

innovative $roducts or services. Businesses $ursuing 7= must -e creative (o$en minded, em-race

e#ternal ideas, encourage ne0 ideas), -ring $roducts to market 5uickly (fle#i-le ra$id engineering,

agile met!ods, concurrent $roduct develo$ment, ra$id marketing and early distri-ution) and t!ey

must continuously raise t!e -ar -y creating ne0 solutions, ne0 $roducts or -y adding ne0

features. a-le illustrates our classification criteria used to discern Best Buy's value streams.

2.2 Best Buy +alue proposition in a state o* *lu,

As of t!is 0riting, Best Buy is making decisions t!at 0ill im$act its future e#istence. For

e#am$le, management issued a $ress release (+ct &2&), to announce t!e streamlining of t!e

organization -y refocusing on ?connectivity, online retailing and customer service@. !e com$any

fired t!e vice $resident of o$erations and !is senior staff. !e "F+ !as resigned and is ste$$ing

do0n in Fe-ruaryvi and t!e "+ and founder of 4eek S5uad !ave left as 0ell. BB's ne0 direction

and its value stream is in a state of flu#. Hence, 0e 0ill focus on e#isting details and try to $redict

t!e future direction.

2.3 Best Buy 'alue Streams an) t-e competiti+e a)+antage

Best Buy is attem$ting to focus on cost leaders!i$ as a com$etitive advantage. !e $ro-lem is

t!at customers often use it to -ro0se in t!e store, try $roducts, and get 5uestions ans0ered. !en

t!ey make $urc!ases online for a lo0er c!arge, from Amazon or ot!er com$etitors' 0e- sites.

!is ?S!o0roomingvii

@ -e!avior is increasing Best Buy's costs, 0!ic! does not translate into

lo0er $rices for t!e customer (e#ce$t for t!e ones 0it! access to free financing suc! as small and

medium -usinesses). Best Buy is using focused differentiation -y leveraging 4eek S5uade#$ertise and kno0ledge, 0!ic! is !ard for Amazon to imitate due to t!e $ersonal attention it

re5uires. 4eek S5uad !as an army of tec!nicians 0!o visit customers' !omes to install and

service $urc!ased goods. !e tec!nicians also $rovide lessons to customers 0it!out sales $ressure

(Somet!ing BB 0as accused of doing in t!e $ast). Best Buy e#tends zero financing for ;& years

to select consumers (!e most fre5uent and large item $urc!asers). !is lo0ers customers' $rices

and reduces BB's cost of customer ac5uisition t!roug! retention and re$eat $urc!ases. !erefore,


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Competitive advantageC#ST Uni$ueness

Figure 1% Hy&rid 'o(used (ost and di)erentiation as a (ompetiti*e ad*anta+e

#E C

ure 2. Best Buy as a master o' #perational e/(ellen(e and nearly a master o' (ustomer intima(y. T0e (ompany also 0ad so

0e -elieve Best Buy is using a !y-rid of focused differentiation and focused cost leaders!i$

(Figure ). Ho0ever t!is com$etitive advantage may not last as *al;Mart edges into t!is -usiness

segment and as regulations address t!e -usiness of credit financing.

Furt!ermore, a-le s!o0s a cluster vie0 of !o0 Best Buy ranks com$ared to its com$etitors in

terms of +E, " and 7=.

*e -elieve t!at Best Buy is attem$ting to -e a master of t0o value disci$lines 0it! some

successes and misalignments (See ta-le for details). A 5uick scan of t!e $rint and social media

s!o0s a -ureaucratic organization t!at is not kee$ing $ace 0it! c!ange. !e com$any claims to

avoid to$ do0n management. et, t!e sales associates 0!o are in direct contact 0it! t!e customer

are not em$o0ered to deal 0it! customer issues Management !as to a$$rove non ordinary issues

0it! transactions even if t!ey im$act t!e customer directly. A visit to a ne0 store s!o0s t!at

customers may feel lost even after t!e ne0 initiative of remodeling some stores. t takes more t!an

C;1 minutes -efore an initial contact 0it! t!e customer (t is interesting t!at t!e older stores !ad a

greeter and t!e initial contact !a$$ened 0it!in 1 seconds of entering t!e store). !e com$any is

in a consumer electronics sea c!ange and a $aradigm s!ift accelerated -y c!anges to cloud

com$uting, music and movie streaming, online $urc!asing, internet ta# and credit card legislation.Hence, t!e cor$oration is in a slo0 re;invention and reactive modes. For t!ese reasons, 0e -elieve

t!at t!e com$any is focusing on +$erational E#cellence first and on "ustomer ntimacy second

(Figure &). Best Buy's attem$t to -e a $roduct leader as 0ell 0as a failure (nitiatives a-out

Mo-ile a$$lication develo$ment and ot!er off t!e s!elf commercial soft0are and Skunk 0orks

attem$ts 0ere a-orted after -irt! around &22). n +cto-er, t!e com$any res!uffled its o$erations

management -y laying off t!e veteran o$erations management and a ne0 focus on mo-ility,

customer service and online retail emerged as a ne0 goal.

#igure $: Best Buy 6alue Streams

. S/T ANA(&SIS 0Strengt-s /ea2nesses pportunities an) T-reats3:

A detailed S*+ analysis is s!o0n in ta-le &. !e follo0ing is a S*+ summary.

C o m p e t i t i v e s c o p e


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3.1 S trengt!s

• "om$any size and e#tensive (domestic and glo-al) distri-ution net0ork

• "ore com$etency in tec!nology services t!roug! 4eek S5uad

• *ell;kno0n -rand

• Strong $ast $erformance• 8o-ust internet $resence and online infrastructure

3.2 Weaknesses

• Ma>or governance ssues

• 8ecent senior leaders!i$ turnover in t!e midst of a crisis (governance, market s!ift)

• *eakening financial situation

• oo many -rands

• 7oor inventory management

3.3 Opportunities

• Emerging glo-al markets (rising middle class and oil 0ealt!, re-alance of glo-al $o0er,

etc.)

• Duick o-solescence of mo-ile tec!nology (8e5uires fre5uent u$grades, re$urc!ases)

• +nline $urc!asing is -ecoming more $revalent

• ncreasing need for outsourcing

• Economic recovery< Small;midsize -usinesses and !ouse!olds may resume $urc!asing

3.4 Threats

• S!are!older la0suits against value destruction, governance• =imited num-er of su$$liers gro0ing $o0er of 0!olesalers 0!o are also -ecoming

com$etitors< (i.e. A$$le stores in malls).

• +nline com$etitors set u$ -rick and mortar distri-ution 0are!ouses due to internet ta#es

• E#c!ange rate fluctuation

• =o0 fre5uency of elevision u$grades

• "!ea$ retailers suc! as *almart moving in

• Financial legislation and com$liance< credit cards, financial instruments

• Unem$loyment and recession im$act on discretionary income

4. T/S MATRI5 AN! STRAT6I%S

Based on our S*+ analysis, 0e develo$ed a +*S matri# (see ta-le C), and as a result, 0e

$ro$ose t!e follo0ing strategies. t is im$erative t!at BB clarifies its value stream -y revam$ing

its structure, develo$ing a culture and governance to increase t!e com$any's intrinsic value.

4.1 Growth Strategy

!is strategy must -e accom$anied -y a ne0 $ricing structure t!at deters ?s!o0rooming.@

Best Buy !as strong -rand recognition 0!ic! s!ould -e utilized for e#$anding online market


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s!are. n addition, -y taking advantage of connectivity and t!e com$any's infrastructure as 0ell as

its free com$utational cycles, BB could im$lement a $latform of soft0are as a service (SaaS)

using concentric gro0t!. Furt!ermore, n &2 Best Buy ac5uired MindS!ift ec!nologiesviii

, a

managed services and i"loud services com$any for -usiness o0ners and customers. "om-ined

0it! t!e 4eek S5uad tec!nology e#$ertise, Best Buy can leverage t!ese factors to differentiate

offerings from ot!er traditional -rick and mortar consumer electronics stores. n an effort to -e

$erceived as ?cutting edge,@ t!e organization s!ould target !ig! visi-ility early ado$ters on social

media $latforms. Best Buy must continue -eing on t!e front lines for social and mo-ile

consumers. *e also recommend t!at t!e com$any develo$ an aggressive international gro0t! $lan

in markets 0it! rising discretionary incomes and la0s mandating s!ifts to !ig! definition

fre5uencies.

4.2 Internal Fix-It Strategy

BB must revie0 s$ending in connectivity, services, online, retail and !ome and $ay s$ecial

attention to t!e $o0er of su$$liers suc! as A$$le, ell, H7, etc. !e cor$oration must re;vitalize

its enter$rise 0ide training a-out ne0 tec!nology and $erform an internal audit of !o0 t!ey are

using t!eir Big ata and Analytics initiatives to make t!oug!tful strategic decisions. t is

im$erative t!at BB take advantage of its o0n consumer insig!ts and market intelligence to

antici$ate c!anging trends.

BB does not !ave a $u-lis!ed mission or vision statement on its 0e-site. !e organization

s!ould create a ne0, com$elling mission and vision t!at gets em$loyees e#cited, re;energized and

engaged. n addition to closing non;$erforming stores, t!e use of in;store s5uare footage and t!e

com$any's $ricing strategies must -e revie0ed. o -e com$etitive, a clarification of value streams

is needed (i.e. for +E treat stores as additional c!annel of distri-ution for " ensure items are

availa-le to deliver 0!en $urc!ased -y t!e consumer, em$o0er associates, custom c!oicest!roug! online near infinite selection etc.).

4.3 xternal Fix-It strategy

BB needs to ret!ink its strategy for ne0 markets and cultivate $lans to integrate cultural

and economic factors -y develo$ing s$ecific entry strategies for emerging markets t!at !ave a

gro0ing discretionary income and a desire for electronic status sym-ols. !is s!ould -e done -y

leveraging a concentric diversification strategyi#

and understanding !o0 ot!er cultures use retail

and mo-ile tec!nology differently t!an 3ort! Americans (i.e. mo-ile $ayments, money transfer,

$ay as you go, etc.) BB may face state o0ned or su$$orted mono$olies in mo-ile tec!nologies.

!us, it must e#$lore coo$eration 0it! state ca$italism drivers as a market $enetration tactic.n an effort to ca$ture early ado$ters and -e $erceived as a ?$rogressive@ com$any, t!ey s!ould

seek e#$osure to a ca$tive social media community of $eo$le in $u-lic relations, >ournalism,

advertising, music and film 0!o can c!am$ion BB's -rand and create o$$ortunities to e#$and t!e

enter$rise's affiliate marketing c!annel reac!. !is 0ill differentiate BB from *al;Mart, A$$le,

Amazon and ot!ers. BB must also ideate innovative strategic alliances and $artners!i$s 0it! ot!er

com$anies and organizations t!at align 0it! t!e -rand.


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4.4 li!inate"Sur#i#e strategy

*e -elieve t!at some of t!e follo0ing strategies may -e re5uired<

• !e com$any s!ould consider a merger 0it! rival Amazon

• E#$lore ne0 ideas and uni5ue integration 0it! su$$liers

• "lose t!e least $rofita-le stores and invest t!e resources in furt!er vertical integration

• Evaluate use of in;store s5uare footage and consider leasing s$ace in t!e cor$orate office

• Assess internal s$ending, financing and !edging to $rotect against currency risk

• 8evie0 $ricing strategy since a -ig $ortion of $rofits is derived from margins on

accessories, !ome t!eatre and e#tended 0arranty $rotection

• 8evie0 de-t financing, cost of ca$ital and ca$ital structure

7. !IR%CTINA( STRAT%6&

Best Buy !as traditionally -een on t!e cutting edge of t!e consumer electronics market. 3ot

long ago its largest com$etitor, "ircuit "ity, folded. Best Buy 0ill !ave to first leverage t!e ne0

consumer !a-its of mo-ile s!o$$ing and cloud com$uting. !e effective e#ecution of t!ese

strategies could and s!ould !el$ $ro$el Best Buy to remain among t!e leaders in consumer

electronics. Ho0ever, t!e future of t!e com$any remains uncertain. *e recommend a directional

strategy t!at is a -lend of sta-ilization, retrenc!ment and gro0t! 0it! an em$!asis on 4ro0t!.

8. %5AM9(% # A N%/ 6R/T STRAT%6&

Based on our analysis a-ove, 0e $ro$ose t!e follo0ing concentric diversificationviii

gro0t!

strategy<

• =everage Best Buy's e#isting resources to $ursue o$$ortunities in cloud com$uting, virtual

sales and affiliate marketing. Best Buy !as a strong internet $resence, an e#tensive cy-er

infrastructure and -rand image. !e com$any 0ill use its e#isting infrastructure and idle

net0ork and com$uter time to service a -ig need of small to medium -usinesses (SMB)<

selling t!eir goods and services online 0orld 0ide and delivering managed services around

$roduced solutions

• !e target market includes soft0are com$anies, game develo$ers, small music and movie

$roducers

• BB 0ill -e a virtual $rocessor, a tec!nology $rovider and a fulfillment $artner t!at leverages

its o0n infrastructure to offer e;commerce, automatic $ayments and online distri-ution for

t!e SMB com$anies 0!o are not in a $osition to sell directly to t!e same customer segmenttargeted already -y BB. !is 0ill ena-le BB to increase t!e utilization efficiency of its

e#isting infrastructure and e#$and its sales of t!e !ig! margin service 0orld0ide

• *e $ro$ose a revenue s!aring model, in addition to c!arging a su-scri$tion for using BB's

-ig data analytics and !osting t!e online store for t!ird $arty vendors.


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9ro;ect Name an) b;ecti+es 9ro;ect Name$ Internet (ffiliate -ar#eting and Services

9ro;ect b;ecti+es: rovide virtual stores and mar#eting for small tomedium technology companies that target the same segments targeted b

BB for complementary products.

9ro;ect managers:

The lead pro/ect managermust be hired from outside

to bring in new ideas. The

manager must be a product

development manager. Themanager must have

e&perience in cloud and

mobile computing andonline retail.

Mar2eting: Interactivemar#eting manager

CT< iloud T1

Customer Ser+ice$ )ee#

S+uad Service

The trio will design a solution that wil provide services for small to medium

technology companies to deliver

solutions to the mar#et place. The

managers will wor# across boundariesand lead strategy ma#ing .

Best Buy Ser+ices

rovide internet services" online ecommerce. )ee# S+uad and -anaged

IT services will provide premium professional services around a select

number of technologies sold directly through the online stores anddelivered by affiliates.

Structure o* operation

The unit will operate as a startup within BB. This may cause resentmen

from other divisions.

CultureThe unit is chosen to combine the unified gee# culture3 within BB"

provide freedom to innovate and agility to deliver products faster.

,ocus on self*managed teams with leads.

Competitors (ma'on" 4igital river" )oogle


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A99%N!I5 TAB(%S AN! 6RA9S

Best Buy Stock 6alue

Best Buy Duarterly 8evenues (Billions of dollars)

Best Buy earnings $er s!are declined -y more t!an &22:


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Ta%le 15 Best Buy 6alue Stream haracteristics

Operational x&ellen&e 'usto!er Inti!a&y (ro)u&t *ea)ership

• 8eliance on information systems inlogistics to reduce costs

• 8eliance on Big ata, com$le# eventanalytics to ma#imize sales

• +utsourcing of su$$ort and ot!er

activities (i.e. BM, SE=) to reducecosts and focus on core com$etencies

• Bureaucratic and !ierarc!ical

organizations (itles matter a lot insidet!e com$any).

• Esta-lis!ed $rocedures of doing -usiness

0it! less lee0ay for deviation.• Automated logistics and $roduct

aggregation

• +ne size fits all $roducts (sell 0!at 0e!ave)

• urnover in e#$erienced senior

management.

• E#tensive use of social media inside BB

to attem$t to gat!er cost reduction ideas

• E#tensive use of $redictive -e!avior models.

• Use of $ersonal s!o$$ing assistance

• Store access, $resentation,

assistance (Mi#ed results, u$grade0it! ne0ly remodeled stores< i.e.Eden 7rairie).

• Use of 4eek S5uad to !el$ service,

guide, assist rat!er t!an >ust sell

• *ell trained teams on t!e floor (But

!ig! turnover 0it! "ollege kids).

• akes too long -efore initial contact

0it! associate.

•Heavy use of Big ata Analytics andcom$le# event analytics and ?attem$t@to focus on t!e 9: of t!e customerst!at generate C: of sales.

• 8e0ard $rograms, zero financing for select customers.

• Attem$t to focus on $ersonal

com$uting, media and mo-ile needs inone sto$ s!o$.

• ntegration of $roduct selection, sales

and service value c!ains.

• E#tensive use of social media inside

BB to gat!er ideas a-out servicing t!e

customer(Blue s!irt nation, loo$market $lace, $redictive models)

• E#tensive use of $redictive -e!avior models.

• Attem$ts to develo$ o0nMo-ile net0ork.

• Attem$t to develo$ o0n

"ommercial off t!e s!elfsoft0are (Failure attem$ts)


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Best Buy Corporation - S. Bensen, A. El Haddi, K. Fitzsimmons, A. Hussein, H. !3

Ta%le 3$ Best Buy S71T

0S3trengt!s

=argest consumer electronics retailerG 8e$uta-le Brand 3ameiversified $ortfolio of $roduct offerings

nternational -usiness ac5uisitions

8e$utation for e#cellent customer satisfaction"ustomer centricity, t!roug! an end;to;end model=evel of service is un$aralleled -y com$etitors

Hig!ly trained staff

8e$utation for retaining !ig!ly skilled and talented staff in

t!e consumer electronics industry.7rovides in;store value added services customer service, re$airs,

interactive $roduct dis$lays.Strong gro0t! strategyFinancial strengt!

8evenues of %.&% B I7rofits of %1 M in &2

"a$italizes on economies of scale i.e. cost advantagesStrong advertising -udget I increases store foot traffic

7!ysical stores I convenient locations

Just under ,222 0orld 0ide+nline $resence

Hig! levels of community service and local involvement.

03 $$ortunities

4ro0ing glo-al demand for consumer electronics< "!ina &&: Middle East &2: 8ussia &2: Sout! America 9:

A more kno0ledgea-le, savvy, consumer -ase 0illing to use t!e internet for $roduct $urc!ases

issolution of num-er one com$etitor "ircuit "ity 3e0 -usiness ventures i.e. Best Buy and "ar $!one *are!ouse

Furt!er e#$ansion of c!ain t!roug! ?mo-ile stores@ 3o ot!er $ure consumer electronic retailer near Best Buy's market s!are8a$id o-solescence of tec!nology and increased needs to u$grade

4adgets as a status sym-olEconomic recovery

2. *eak dollar against ot!er currencies (!el$s e#$orts)

. 4ro0ing mo-ile a$$lications

0/3eaknesses

Marketing goals too -road*eakening financial $osition

&.9: decrease in net income ('2 L '2/) ncrease in long;term de-t due to multi$le ac5uisitions

ecrease in availa-le cas! due to rising inventories and

accounts received.

ncreased costs associated 0it! t!e "ustomer;"entric

o$erating model L training of em$loyeeso$ leaders!i$ turnover at crucial time (need for increase in

connectivity strategy)e$endence on fe0 su$$liers

1 su$$liers re$resent one t!ird of all $urc!ases Sony, H7,

Samsung, A$$le, os!i-a7!ysical storesm$act of class action la0suits

Many () -rand nameseterioration of strong et!ical culture touted -y com$any

3o strategy for cloud com$uting, Soft0are as a Service(SaaS),7latform as a Service(7aaS)

4overnance issues

7oor inventory management systems7oor inventory communications to customers

0T3!reats

. 8ise of many com$etitors ; loss of market s!are and loss of revenu

Uns$ecialized discount retailers i.e. *al;Mart, arget and "ostco

+t!ers suc! as Sears +nline retailers (i.e. ell, Amazon, eBay)

Entertainment soft0are stores i.e. 4ameSto$. +ffice su$$ly stores i.e

Sta$les, +fficeMa#, and +ffice e$ot.

Home im$rovement retailers i.e. Home e$ot and =o0e's. Small

retailers 0it! little over!ead (including internet vendors).

&. =egislation restoring internet ta#es, t!us forcing online retailers toesta-lis! -rick and mortar stores (case of Amazon no0).

C. =egislation regarding credit cards and ot!er financial instruments

. S!ifting market to cloud com$uting, SaaS and 7aaS arc!itecture(*!at to do 0it! geek s5uad 0!o is geared to deskto$s rat!er t!ancloudN misalignment, deskto$ sales O service)

1. istressed economy Fall in consumer s$ending es$eciallydiscretionary s$ending

%. Moderate to !ig! -argaining $o0er of su$$liers9. 8ising la-or 0ages Skills re5uired for cloud services

. 8egulations negatively im$acting $rivate;la-el credit cards i.e.decreasing revenue streams on domestic sales

/. omestic market for consumer electronic $roducts maturing i.e. fla

$anel television market Most of Best Buy's revenues come from 6 sales

2. "!inese imitation goods 0it! very lo0 margins. 6ery !ig! risk of a s!are!older legal action Former founder value

destruction t!roug! offerGoffer 0it!dra0al&. rade 0ars 0it! "!ina, $rotectionismC. +verseas American -usinesses as a soft targets to international

terrorism. "y-er;crime, cy-er 0ar attack on internet infrastructure and ot!er

-usiness discontinuity events(3atural or man;made disasters)


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Best Buy Corporation - S. Bensen, A. El Haddi, K. Fitzsimmons, A. Hussein, H. !

Ta%le 3$ Best Buy T17S -atri&

nternalAssessment

E#ternalScanning

03 $$ortunities

. 4ro0ing glo-al demand for consumer

electronics&. "!ina &&:, Middle East &2:, 8ussia

&2:, Sout! America 9:C. A more kno0ledgea-le, savvy, consumer

-ase 0illing to use t!e internet for $roduct $urc!ases

. issolution of num-er one com$etitor"ircuit "ity

1. 3e0 -usiness ventures i.e. Best Buy and"ar $!one *are!ouse

%. Furt!er e#$ansion of c!ain t!roug!?mo-ile stores@

9. 3o ot!er $ure consumer electronic retailer near Best Buy's market s!are

0T3!reats

. 8ise of many com$etitors ; loss of

market s!are and loss of revenue&. istressed economy, lo0 s$ending

C. Moderate to !ig! -argaining $o0er ofsu$$liers

. 8ising la-or 0ages

1. 8egulations negatively im$acting $rivate;la-el credit cards i.e. decreasinrevenue streams on domestic sales

%. omestic market for consumerelectronic $roducts maturing i.e. flat

$anel television market9. =ong life o f 6 sets. irect com$etition 0it! su$$liers suc!

as a$$le stores./. 8ising 0age rates

2. S!are!older la0suits

0S3strengt!s

. =argest consumer electronicsretailerG 8e$uta-le Brand 3ame<iversified $ortfolio of $roductofferings, nternational -usinessac5uisitions

&. 8e$utation for e#cellentcustomer satisfaction

C. Financial strengt!

. +nline $resence1. Hig! levels of community

service and local involvement.%. 4eek S5uad< Service, raining,

Su$$ort

9. Strong leverage of Social Media

S


12/12

Re*erences an) %n) Notes

i Bustillo, Miguel. 4ordon.Kat!y. ;2; Best Buy =eaves U.K., 8e-oots 7!one 6enture. *all

Street Journal.ii

"lifford, Ste$!anie. 21;;&. "!airman of Best Buy 8esigns After an nternal Audit. 3e0ork imes.iii

=ee, !omas. 2;2/;&. Sc!ulze 4ets Access to Key E#ecs. Starri-une.iv

uryee, ricia. 2;2;&. Best Buy's 3e0 E;"ommerce Head Aims to Unify Bricks and"licks. All !ings igital.vEricson, Jim. ;21;&. !e "loud (a#) 7latform. Accounting oday

viJo$son, Barney. 2;2;&. Best Buy's Finance "!ief to Ste$ o0n. Financial imes.

viiB!asin, Kim. 2%;&1;&. BES BU ERE"< Here's t!e rut! A-out t!e S!o0rooming

7!enomenon'. Business nsider.vii*!eelan and Hunger. &2&. Strategic Management and Business 7olicy, Ct! Edition. 7.&1.

7rentice Hall.
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