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Bestbuy Swot Analysis

Autor:   •  November 4, 2015  •  Essay  •  2,844 Words (12 Pages)  •  505 Views

Page 1 of 12

PART A

Best Buy Co. Inc. is a multi-national, e-commerce, and physical retailer of consumer electronics and entertainment software. Headquartered in Minnesota, it is a publicly traded company listed on the New York Stock Exchange. Best Buy operates in two reportable segments: Domestic and International. It has 1,503 stores in the USA and 2,876 stores internationally operating under a variety of names such as Best Buy, Best Buy Mobile, The Carphone Warehouse, Fiver Star, Geek Square, Magnolia Audio Video, Pacific Sales, The Phone House, and Future Shop, before they decided to close down all respective stores in Canada.

STRATEGY

Best Buy’s strategy revolves around bringing transformational change to many areas of their business, including online and in-store customer experience, employee training and engagement, partnership with our vendors, retail execution and cost control. They are reconstructing their strategy with the goal of making them the preferred authority and destination for technology products and services, as encapsulated in their Renew Blue Strategy. To be able to attain a sustainable competitive advantage and increase profitability, they plan to reinvigorate and rejuvenate the customer experience, attract and inspire leaders and employees, work with vendor partners to innovate and drive value, increase return on invested capital, and continue their leadership role in positively impacting the world.

The company’s strategy is reflected in their value proposition, store development and operations, as well as their recent economic activities. They offer a wide variety of the latest devices and services at competitive prices in multiple stores. Further, their acquisition of Geek Squad, for example, represents their goal to offer extended and knowledge-based services to customers for a competitive advantage. However, in spite of their efforts to put their strategies in actions, Best Buy is very susceptible to macroeconomic factors and competitive forces in the electronic retail industry, deterring their growth and decreasing their profitability.

INDUSTRY ANALYSIS

Best Buy operates mainly in the electronics retail industry. I used Porter’s Five Forces to assess the attractiveness of the industry and evaluate the competition in the market.

Threat of New Entrants

Best Buy operates in a highly capital intensive industry. On top of the initial investment to construct and open a big box electronic store, further capital expenditures are incurred annually for enhancements such as investments in new stores, remodeling, store expansions, and improving information technology infrastructure. Companies in this industry spend millions every year to expand market reach and increase their market penetration.

In fiscal 2013,

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