5 pages/≈1375 words
Business & Marketing
Strategic Management: A case study of Best Buy (Essay Sample)
Strategic Management: A case study of Best Buysource..
Strategic Management Case Study
Best buy Co Inc.: Sustainable Customer Centricity Model
Strategic Management Case Study
Best buy Co. Inc.: Sustainable Customer Centricity Model
Best Buy Co. Inc. is a major Multinational Public Limited Company that deals with the sale of consumer electronic appliances mainly within the United States and Canada. The company is a large corporation having about 4,000 retail stores in total. Products sold and marketed by Best Buy Inc. include mobile phone devices, video games, television sets and computers. Not only does the company market and sell these devices but also their parts, accessories and components. The company was started in the 1960s with a single outlet and a staff of three people. Its initial primary business involved selling audio equipment but it diversified over time to involve the sale of other electronics. The company has so far acquired seven other companies, enabling it to grow at a high rate over the years. As far as Strategic management is concerned, Best Buy Co. Inc. employs a differentiation strategy that emphasizes on achieving excellent customer service, competent Sales staff and reliable, uninterrupted after sale services to customers. The company uses Customer Centricity (making customers the center of all relevant decision making) as a primary business model to guide its operations (Wheelen& Hunger, 2012, p. 24-14).
Best Buy Co. Inc. is favored by the fact that its sales staff work on a non-commission basis. Still, its Human Resources form the most important resource for the company considering its use of the Customer Centricity Model as a Strategic Management tool. As a result, the company invests heavily in equipping its workers with the required skills via regular and periodic training undertakings. These employees are expected to be practical and handy when dealing with customers and show the same by design and care. The customer centricity model has enabled the company to maintain a desired image improved networks and market position.
Aside from stationary retail stores, the company also manages a number of mobile stores within the United States, a consequence of its joint venture undertakings. This has added to overall warehousing resources of the company largely. This has positively influenced the market position of the firm largely in that it maintains reliable outlets in many states within the country (The U.S). The company also maintains a strong and reliable network on the international platform, mostly in North America, Europe and Asia, which enable it to take advantage of economies of scale and most importantly its brand and image. Overall, the company serves a vast customer base of loyal and satisfied consumers (Wheelen& Hunger, 2012, p 18-1).
The growth and expansion endeavors that Best Buy Inc. has achieved so far speak for itself. The company has proved its financial soundness and capability by the acquisitions it has successfully conducted in the past, which are seven in total. The company has established retail outlets in markets as far as Asia and Europe, it has also targeted several group of people even though it initially targeted young males (of ages 18 to 25) who were interested in audio (music) equipment. Today, the company targets ordinary customers of electrical appliances, builders and remodelers (construction industry) and the geeks as well. Subsequent to its acquisitions, it also targets segments regarding provision of internet services and voice data among other information technology utilities. Even so, the company stands to gain from its untapped capabilities of achieving more expansion and growth from significant acquisitions and joint venture opportunities. So far, the company is still capable of increasing its customer base and product brands it displays. It also can venture into new markets (in terms of international expansion) under its current brand name for purposes of securing its future businesses considering the demand for technological goods in on a constant increase (Wheelen& Hunger, 2012, p. 22-8).
The Best Buy Co. Inc. - the largest electronic goods retailer in the United States boasts of a huge market share of about 20% of the electronics retail business in the country. It is listed on the New York Stock Exchange (NYSE) as BBY and it participates actively in the trading of financial instruments with objectives of maximizing the wealth of its shareholders. As a top â€˜specialty retailerâ€™ in the United States, Best Buy Co. Inc. is a financially sound firm in the market.
The Customer Centricity model is certainly a reliable and consistent way for the company to gain invaluable information regarding consumer tastes and preferences, which enable it to make placement of goods relevant to the market environment. Via this model, Best Buy Inc. has been able to create a sustainable assortment of electronic goods in its retail outlets that have facilitated its sales volume. This has enabled the company to maintain a vast customer base of satisfied end users who find it a reliable business partner (Wheelen& Hunger, 2012, p. 15-13).
The process of acquiring other companies has enabled Best Buy Inc. to have a workforce of varied experiences among its sales staff. These employees are constantly trained with the needed skills and knowledge regarding electronics sold by the company hence ensuring their competence. As a result, the company remains of relevant preference to consumers in the market.
The market segment under Best Buy Co. Inc. is large, extending from the U.S and Canada to Mexico, Turkey and United Kingdom among other countries. An overall outlook at the company operations enables one to identify opportunities it is banking on such as economies of scale and a global expansion strategy. The company is internationally recognized for selling and marketing a vast variety of electronics via its numerous outlets the different countries it is represented. However, Best Buy Co. Inc. undoubtedly has huge amounts of capital tied up in stock assets without maintaining long-term debt contracts with its suppliers. As such, the company risks a breakdown in a case where a major supplier might cease to transact any business with the firm.
In terms of sources of funds, Best Buy Co. Inc. makes use of long-term debt instruments to facilitate its vast inventory held in its retail outlets. This is a form of operational weakness since the products tend to stay for long periods before purchase while the debt obligations cause a strain on the financial soundness of the firm.
The company has successfully achieved market penetration to an exceptional level having outlets in 24 different regions within the United States. The company operates more than a thousand outlets within the United States alone. As a result, Best Buy Co. Inc. has successfully expanded its product line as a form of diversification. Even so, the growth and development of E-commerce has undeniably posed a major threat to retail stores companies such as...
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