Introduction
· Good market- targeted US market, large pool of consumers
· Industry- consumer electronics and appliances, very fast moving
· Competitor- Amazon sales-$48 billion- 2012, Best buy- $50.7 billion revenues, loss of $1.2 billion.
Good market
1. The US market was large, concepts increased the sales periodically
2. Early years- first store in St. Paul Minnesota, revenues $1 million in 1970
I. Opening of warehouses, showrooms, more stores (9).
II. Concept I – open superstore- Burnsville, Minnesota
III. Products added – VCRs, Household appliances
IV. Early years-products – Hi fi Audio, photography, home office products, video and audio products
V. Public offerings to raise funding, NYSE debut
VI. Concept II- Grab and go store format
VII. Concept III-Upgrade of product range, i.e. TV, DVD more stores opened.
VIII. Ecommerce launch - BestBuy.com
IX. Concept IV: change management, cross selling and repeated buying.
X. Introduced “win in the home” geek squad
Competitor
I. Circuit City displaced in concept III
II. Target, Walmart, and City Circuit increase competition in concept IV
Product expansions
I. Acquisition of Pacific Sales Kitchen
II. Partnership with Carphone Warehouse, Open Bets Buy stores in Manhattan
III. Acquisition of Speakeasy, Cosign acquisition of Napster Inc. (2009)
IV. Internationalization-
V. Purchase stake in Jiangsu Five Star Appliance Co. (china based)
VI. Expand in Canada
VII. Expand Carphone in UK
References
Wells, J. R., & Danskin, G. (2014, March 6). Best Buy in Crisis. Havard Business School.
Hitt, M. A., Hoskisson, R. E., & Ireland, R. D. (2013). Strategic management: Competitiveness & globalization : cases. Mason, OH: South-Western, Cengage Learning.