Best Buy Case Study

Best Buy is the leader in electronic retail industry.  Best Buy is only focused on selling electronics, make it different from other retailers like Target and Walmart which also sell other products like apparel, toys, or furniture. According to TWICE Magazine’s report, Walmart and Amazon is ranked second and third in electronic retail industry. Basically, Best Buy’s main challenge is its competitors. In a few years, the emergence of online electric retailers like Amazon have huge impact on Amazon. Also, difficult economic condition also affects the discretionary products like electronics. The company also face the price war with the large-store discounters like Target and Walmart. At some point of view, Best Buy just like a showroom, where customer come and experience the products, then go online or other stores with discounts for a better price.

For example, a New Nintendo 3DS XL, new handheld game console from Nintendo, is sold at Best Buy for $199.99, but only $194.67 on Amazon.com. It seems not too much if there is only $5 more expensive, but Amazon also offer one-day shipping for Prime membership for free. It’s really a good deal. Also, Amazon has more accessories option for the console than Best Buy. This makes Amazon a best place to look for a new Nintendo console. For another example, household applications like vacuum cleaner also has better price on Amazon then Best Buy. Let’s have a look at a Hoover – Sprint QuickVac Upright Vacuum, it costs $63.99 at Best Buy, but only $52.99 on Amazon.com. Obviously, most people will choose buying on Amazon.

Personally, if I am planning to buy one of these two thing but I don’t know what they are, I just drive to Best Buy at the weekend and try them, then I will buy it on Amazon because of better price. Amazon has also offered free return so I don’t need to worry about extra cost in the case I don’t like the products for any reason.

I have some recommendations for Best Buy to maintain and possibly increase its market share in consumer electronics. First of all, it must reduce the costs of products, or at least gives more promotions or discounts to attract customers. They should win the price war in order to increase the market share. Secondly, Best Buy should provide more options in main products and related products for customers to choose. For example, the New Nintendo 3DS XL, Best Buy only sell 2 main colors of the console with some accessories, while Amazon sells many editions of the console beside 2 main ones and various choices of accessories from cases to screen protector with different price range. In my opinion, these two are what Best Buy should do first to compete with its competitor.