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CEO HUBERT JOLY BREATHED A SIGH OF RELIEF as he reviewed the 2012 end-of-year holiday revenue figures for Best Buy. After perhaps the most tumultuous year ever in the life of the company, he knew the numbers could be much worse. Despite being the world’s largest retailer of consumer electronics with $50 billion in annual sales, Best Buy’s financial situation was precarious. The company’s stock price had fallen from $45 to $15 per share over the past two years, a drop of roughly 60 percent. 1 While revenues had been increasing at a marginal rate, both comparable store sales and overall profitability were showing a consistent negative trend. Earlier that year, Best Buy had been forced to report a 91 percent drop in profits during the second quarter compared to the same period in 2011; 2 the third quarter showed a comparable 97 percent drop in operating income. 3

So, yes, the fact that the company made $12.8 billion in revenues during the last nine weeks of 2012, compared to $12.9 million the year prior (a drop of just 0.4 percent), was welcome news indeed. 4 As Joly had previously told investors, one of his first priorities was to stabilize the company before he could implement ways to improve its overall performance. 5

Still, Joly was optimistic about Best Buy’s future. He had a knack for numbers, and behind all the red ink, he liked what he saw. After being appointed by the board in August, he spent his first week on the job in September working as a “blue shirt” in Best Buy stores in the Minneapolis/St. Paul area. Shortly thereafter, he held a three- day retreat with the company’s top managers, and once again emerged encouraged. 6 As he said:

Best Buy is a company with an amazing history, enormous assets and great opportunities. I am eager to start working with everybody at Best Buy to define and take the actions that will allow us to win in the marketplace, and to be seen by all of our stakeholders as the best buy. 7

As Joly saw it, Best Buy had a lot of strengths on which to build, in spite of its disappointing financials. It sold far more consumer electronics than either of its largest competitors ($50 billion compared to ~$30 billion for Walmart and $14 billion for Amazon), and dominated the PC, camera, and tablet categories in terms of market share. It had state-of-the-art logistics, inventory, and support systems that enabled it to make same-day deliveries for online orders. Meanwhile, Best Buy’s online business was the 11th 2 largest e-commerce site worldwide, and was growing by 15 to 20 percent each quarter. 8 Whereas critics saw the company’s physical stores as costly over- head, Joly firmly believed there was value in Best Buy’s unique combination of physical and digital resources. Statistics showed that customers picked up approximately 40 percent of online orders in the store, which provided a perfect opportunity to sell additional products and services. 9 Combine all those features with a well-trained sales force that converted more site visits into sales, and Best Buy could easily triple its operating profits! 10

In prior jobs, Joly had engineered successful turnaround strategies for Vivendi and Carlson Wagonlit Travel, 11 and he saw no reason why Best Buy would be any different. Still, based on those previous experiences, he knew that the path to success would be filled with significant challenges. Competition in the consumer-electronics industry was cut-throat, with razor-thin margins. Best Buy was up against the low-cost king Walmart on one side, and was flanked by Amazon—the original online empire—on another. And then there was Apple with its

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Best Buy’s Turn-Around Strategy (2013)

M A R N E L . A RT H AU D - DAY

F R A N K T. ROT H A E R M E L

Professors Marne L. Arthaud-Day and Frank T. Rothaermel prepared this case from public sources. The authors are indebted to Nicola McCarthy (GT PhD Candidate) for her contributions to an earlier version of this case. This case is developed for the purpose of class discussion. It is not intended to be used for any kind of endorsement, source of data, or depiction of efficient or inefficient management. © by Arthaud-Day and Rothaermel, 2015.

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This document is authorized for educator review use only by Alj Gsb, University of the West Indies until February 2017. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860

Best Buy’s Turn-Around Strategy (2013)

premium gadgets and trendy stores, which dominated the market’s high-end segment. Carving out a unique niche in this crowded, post-big-box, digital-retail world would not be easy, but it was the only way for Best Buy to avoid the same fate as the now-defunct Circuit City. The recent holiday results were encouraging, but investors were already clamoring for more details on what Joly’s next steps would be.

A Brief History of Best Buy

Together with his business partner, James Wheeler, Richard Schulze founded Sound of Music, an audio spe- cialty store, in Minnesota in 1966. The fledgling company ended its first fiscal year with gross sales of $173,000, and continued to grow rapidly over the next few years. By the time of its initial public offering in 1969, the home- town enterprise had acquired two of its local competitors 12 and had opened two new outlets near the University of Minnesota in downtown Minneapolis.

Schulze bought out Wheeler in 1971, 13 shortly after Sound of Music hit the $1 million mark in annual rev- enues. 14 Subsequent years saw continued expansion through additional locations, new product lines, and novel promotional techniques. For example, in 1979 Sound of Music became the first supplier of video and laserdisc equipment from companies such as Panasonic, Magnavox, Sony, and Sharp. After a tornado hit the Roseville, Minnesota, store in June 1981, the company responded with a “Tornado Sale,” which became an annual event, storm or no storm. This strategy boosted Sound of Music’s average sales per square foot to $350, compared with an industry average of $150 to $200. 15

ARRIVAL OF THE SUPERSTORE

With ambitions to capture even larger market share, Sound of Music changed its name to Best Buy Co., Inc., in 1983. Shortly thereafter, it adopted its now-familiar superstore format, with an increasingly diversified product range. Boosted by an infusion of cash from a successive series of public offerings, Best Buy proceeded to grow from 8 to 24 stores and saw its revenues increase from $29 million to $290 million from 1984 to 1987. 16 On July 20, 1987, Best Buy made its debut on the New York Stock Exchange (NYSE: BBY) with an initial offering of 8.3 million shares of common stock.

Best Buy changed its logo to the yellow tag in 1987, and in 1989 its stores adopted a new “grab-and-go” store format, called Concept II. Schulze’s revolutionary new approach to big-box retailing combined Walmart’s prices with Circuit City’s assortment, in a shopping warehouse with a 35,000-square-foot footprint. 17 The new stores consisted of well-stocked showrooms with self-help information so that people could make their product selec- tions independently and check out in a single stop. Answer Centers were still available for people who desired assistance, but salespeople no longer needed to attend to each individual customer or fetch merchandise from storage. This change reduced Best Buy’s employment costs by one-third, which compensated for the correspond- ing de-emphasis on service contracts. One analyst called Concept II “the most innovative thing to happen in this industry—ever.” 18

Spurred by the success of its warehouse format, Best Buy hit $1 billion in sales revenues in 1992. The company landed on the Fortune 500 list (debuting at #373) for the first time in 1995. Fortune magazine named Best Buy one of the top 10 performing stocks from 1990 to 2000, and honored it as “Company of the Year” in 2004. 19

GROWTH THROUGH ACQUISITIONS

The year 2000 marked the launch of a new phase of inorganic growth through acquisitions. Best Buy grew its revenues from $12.5 billion in 2000 to nearly $51 billion in 2012. 20 The company first purchased Magnolia, a high-end consumer-electronics chain with 13 locations throughout Washington, California, and Oregon, for

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$88 million in 2000. 21 The next year, Best Buy purchased Musicland for $425.1 million. The acquisition of the mall-based music and entertainment retailer gave Best Buy access to an additional 1,300 stores across the United States and Puerto Rico, including 650 Sam Goody and 400 Suncoast Motion Picture outlets. In 2002, the com- pany acquired Geek Squad, a 24-hour computer-support task force. By 2004, Best Buy had opened Geek Squad precincts within all of its stores. 22

In contrast to the rapid expansion of Geek Squad, Best Buy divested Musicland in 2003 due to declining mall sales after 9/11, coupled with increased competition from Walmart and Target in the CD segment. Sun Capital Partners Inc., a private equity firm, purchased the failing firm for the assumption of Musicland’s debt and lease obligations. Brad Anderson, who succeeded Schulze as CEO in 2002, described the Musicland venture as “a very expensive but powerful learning experience for Best Buy.” 23

After the Musicland debacle, Best Buy took a two-year acquisition hiatus before purchasing AudioVisions, a custom integrator of electronic products such as flat-screen TVs and security solutions, in 2005. 24 In December of that same year, Best Buy acquired Pacific Sales, a Los Angeles–headquartered company that specialized in selling premium kitchen appliances, for $410 million. 25 In 2007, Best Buy announced plans to purchase Seattle-based Speakeasy Inc., a broadband and VoIP services provider, for $97 million. 26 This transaction was followed by the 2008 announcement of Best Buy’s acquisition of Napster for $121 million in cash, in an effort to compete with Apple’s 70 percent share of the digital-music marketplace. 27

INTERNATIONAL EXPANSION

In the meantime, Best Buy was also engaged on the international front. Its first cross-border expansion was the 2001 acquisition of Futureshop Ltd., a Canadian electronics chain, which added annual sales of $1.32 bil- lion. 28 Maintaining Futureshop as a wholly owned subsidiary, Best Buy later strengthened its Canadian presence by opening 77 branded stores of its own. 29 Best Buy established an active presence in the growing Asian markets with its 2006 acquisition of a majority interest in the retail chain Jiangsu Five Star Appliance Co., Ltd., China’s fourth-largest appliance and consumer-electronics retailer, for $180 million. 30 A year later on January 26, 2007, the first Best Buy store in China—touted as the largest Best Buy in existence—opened in Shanghai. 31 Other regions quickly followed. By 2008, Best Buy had announced the opening of its first pilot stores in Mexico and Turkey, as well as multiple branded superstores in the United Kingdom and other European countries. 32

In response to the 2008–2009 recession and increasing competitive pressures, Best Buy started to shift its expansion efforts away from traditional “big box” stores to focus on its new “Connected Store” format and “Best Buy Mobile” concept stores at home and abroad. By the end of 2012, Best Buy had closed all of its branded stores in China, Turkey, and the United Kingdom (while maintaining its presence in Canada and Mexico). Instead, the company invested heavily in its Five Star subsidiary in China and its Carphone Warehouse and Phone House stores in Europe, opening 38 and 36 new locations in fiscal 2012, respectively. 33

LEADERSHIP CHANGES

After having just two CEOs in its first 43 years of operations (Richard Schulze and his successor Brad Anderson), Best Buy went through three top leaders in a six-month period in 2012. 34 Brian Dunn had assumed the helm in June 2009 and had been trying to “right” Best Buy’s “ship” for the past three years. Dunn likewise believed that the company’s physical stores were an asset: “There are still things in the physical world that are going to be important: expert advice and the ability to see and touch the latest tablets.” 35 But to cut costs, he announced in 2011 that Best Buy would reduce its “big box” real estate by 10 percent over five years, by closing some stores, renegotiating leases, and letting some leases expire. 36 Thousands of workers, including some 600 highly trained Geek Squad staffers, were laid off. 37 Moving forward, Dunn planned to open 600 to 800 new Best Buy Mobile stores, focusing on smartphones and other mobile devices. 38 The goal was to increase the number of retail points of contact while decreasing square footage, thereby increasing the company’s flexibility as a

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multichannel retailer. 39 He also increased Best Buy’s online offerings by more than 20,000 items to broaden its “virtual” footprint. 40

Unfortunately, Wall Street was not satisfied, and the company’s stock price continued its precipitous decline. Analysts felt Dunn had been slow to recognize the company’s problems, and was not being aggressive enough in shutting down underperforming stores. 41 Thus, when Dunn announced his resignation in April 2012 after 28 years as a Best Buy employee, many assumed it was due to the company’s financial woes. In reality, he left in the midst of a board investigation into allegations of personal misconduct (a close relationship) with a female employee. 42 Ultimately, the independent investigators determined that there had been no misuse of company resources, but that Dunn’s poor judgment and lack of professionalism had contributed to a negative work environment. 43

The fallout did not stop there, however. Richard Schulze, who was then serving as Chairman of the Board, stepped down from his position at the June 2012 board meeting. The board “expanded his role” by granting him the honorary title of “Founder and Chairman Emeritus” and permitted him to finish out his term as director through 2013. The investigative report indicated that Schulze had learned about Dunn’s actions, confronted him, warned him that such behavior was contrary to company policy, but then dropped the issue when Dunn denied the allegations. To rectify this breach of ethics, the board named Hatim Tyabji, chair of the audit committee, as the new Chairman 44 and hired an external consultant to run the search process for a new CEO. In the interim, George Mikan III, another director, agreed to take on the day-to-day responsibilities for running the company. 45 The board also recommended that shareholders approve the declassification of the board, making each director subject to annual re-election. 46

Joly was hired in August 2012, and assumed active duty starting in September. 47 Several investors were still not happy. Some saw Joly’s lack of retail experience as a significant limitation, while others wondered if the company had rushed the search just so it could proceed with its restructuring plan. 48 (See Exhibit 1 for Best Buy financial data for fiscal years 2008–2012.)

The Consumer-Electronics Retail Industry

A BRIEF HISTORY

The consumer-electronics retail industry grew rapidly in the second half of the 20th century due to several converging trends. At the end of World War II, a significant portion of the U.S. population migrated from cities to suburbs, creating a need for suburban retail centers. At the same time, the cost of technology decreased, generat- ing an increase in demand for televisions and other consumer electronics. Many of these new customers were price-sensitive, first-time homeowners, who were willing to accept decreased customer service in return for lower prices, leading to a rapid growth in discount stores. 49

As the children of the WWII generation—the baby boomers—reached adulthood in the 1970s, demand for consumer electronics soared. Retailers shifted from carrying just one or two lines of equipment toward stocking a diverse set of product lines. Strong industry growth continued through the late 1980s, until the new VCR market became saturated and a recession slowed consumer sales. By 1991, 98 percent of all homes had at least one color TV and 77 percent of those that owned TVs also owned a VCR. The United States alone had at least 10,000 radio, television, and consumer-electronics stores that had sprung up to meet the surge in demand. With market satura- tion, however, growth in the 1990s was limited to the replacement and upgrading of existing devices. 50 As a result, competition intensified and many companies, such as Highland Superstores Inc., left the electronics market. 51

Technology advancements and improved economic conditions in the mid- to late-1990s again led to a period of growth that supported the rise of large superstores such as Best Buy and Circuit City. In 1998, sales at Best Buy and Circuit City increased by 21 percent and 48 percent, respectively. 52 It was around this time that the industry faced yet another great shakeup—the birth of online retailing.

In 1998, Amazon.com , a previously unheard of competitor, entered the consumer-electronics market by offer- ing music CD sales online. 53 Not willing to cede this potentially lucrative market, Circuit City, Tweeter Home

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Entertainment Group, and Outpost.com all opened online consumer-electronics sites of their own within the next year. Best Buy followed suit with Bestbuy.com in 2000, making it a relatively late mover in e-retailing. 54

The ability to reach new consumers online, coupled with increased interest in digital cameras and DVDs, led to yet another period of rapid expansion throughout the early 2000s. This time, however, growth occurred primar- ily through acquisitions and industry consolidation. From 1994 to 2007, the three largest consumer-electronics retailers (Circuit City, Best Buy, and Radio Shack) increased channel share from approximately 22 percent to 45 percent. Meanwhile, the total number of firms in electronics retailing with over 100 employees declined by 4 percent per annum from 1998 to 2004. 55

From 2005 to 2007, the industry compound annual growth rate (CAGR) was approximately 6 percent. With the onset of the global recession, growth fell to 3.4 percent in 2008 and 20.4 percent in 2009 ( Exhibit 2 ). The economic contraction proved to be short-lived, however, and the industry quickly resumed a modest rate of growth in subsequent years. As of 2011, approximately 50.0 percent ($257.3 billion) of the total market value of $514.2 billion was attributable to the audiovisual equipment segment, with computer hardware contributing 34.3 percent ($176.2 billion). Music and video comprised another 10.5 percent ($53.9 billion), and game consoles the remain- ing 5.2 percent ($26.8 billion). The global computer and electronics industry was projected to reach a value of $620 billion by 2016, an increase of 20.6 percent over 2011 figures. 56

CURRENT TRENDS

The consumer-electronics retail industry is both cyclical and seasonal. Industry sales during the holiday season in the fourth quarter typically exceed sales from the other three quarters combined. As most consumer-electronics items are considered discretionary purchases, sales are directly correlated with macroeconomic factors such as consumer confidence, unemployment, the housing market, and the ability to obtain credit. 57

Another distinctive trend in the consumer-electronics industry is that of ever-falling prices. These price decreases place constant pressure on consumer-electronics manufacturers to improve functionality, portability, and style as a way of differentiating their products from those of competitors. As a result, the product life cycle has grown increasingly shorter as manufacturers cannibalize their own products in an effort to maintain customer interest and loyalty.

This cannibalization has led to the evolution of consumer electronics as a measure of socioeconomic status in countries such as the United States. Financial wealth buys access to the latest and greatest technology. As prices fall, the technology becomes affordable to a wider demographic, but the technological elite have already moved on to the next generation of devices. Cellular phones were once fantasy gadgets seen only in James Bond movies. In the 1980s, yuppies proudly displayed their cell phones on their belts as a status symbol. These days, nearly everyone has a cell phone whose design and functionality make those early “dinosaurs” laughable. Laptops, large-screen TVs, and smartphones have enjoyed a similar proliferation among the masses. Today’s must-have is tomorrow’s bargain commodity at Walmart, so retailers must strike while the product is hot. A product will, in its boom days, attract a very different clientele than in the later, less-exclusive phases of its shelf life. Consequently, understanding and predicting consumer demand is an imperative in the modern consumer-electronics industry.

Past and Current Competitors

Comparatively speaking, the consumer-electronics retail industry remains relatively fragmented. Prior to the 2008 recession, the top three consumer-electronics retailers (Circuit City, Best Buy, and Radio Shack) accounted for 42 percent of the U.S. market. In comparison, the top three firms in home improvement and office supply retail controlled 58 percent and 79 percent, respectively. Globally, the market is even more divided, with Best Buy con- trolling just 3.2 percent of the worldwide market in consumer electronics in 2011. 58 Its major competitors include

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Apple (11.3 percent), Walmart (6.2 percent), and Metro AG (5.6 percent), with “other” stores accounting for the remaining 73.7 percent ( Exhibit 3 ). 59

With respect to online sales, Amazon dominates the U.S. consumer-electronics market with a 60 percent share, followed by Walmart at 22 percent, and Best Buy at 14 percent. Amazon’s lead in share of sales is somewhat smaller at 39 percent, compared to 33 percent for Walmart, 23 percent for Best Buy, and 4 percent for Target. However, Walmart’s value per order ($189) exceeds that of Amazon ($103). 60

CIRCUIT CITY

The story of Best Buy is not complete without an account of the rise and fall of Circuit City, once the compa- ny’s most formidable competitor. When Samuel Wurtzel, Circuit City’s founder, learned that the first commercial television station in the South was soon to hit the airwaves, he decided that a store selling TVs sounded lucrative. 61 He opened the first Wards Company store in Richmond in 1949. Soon thereafter, Wurtzel and his partner diversi- fied their product offerings to include a range of home appliances as well as television sets. As profits grew over the next decade, they opened three additional stores in the Richmond area. 62 The company went public in 1961, selling 110,000 shares at a price of $5.375 through a Baltimore stockbroker. 63

Wards expanded across the Southeast and Midwest through a series of acquisitions from 1965 to 1970, after which Samuel Wurtzel passed the torch on to his son, Alan Wurtzel. 64 In 1974, Wards arguably suffered adverse effects due to its rapid expansion and diversification, losing $3 million on overall sales of $69 million. In response, Wurtzel junior withdrew Wards from areas outside its core competencies, such as tire sales, and refocused the product line on consumer electronics. To showcase its new strategy, the company opened a 40,000-square-foot store called “The Wards Loading Dock.” 65 This “big box” format had ample room to display Wards’ extensive selection of 2,000 products. As a result of its novel store design, Wards increased its sales ten-fold to $246 million by 1983. 66

In 1984, Wards changed its name to Circuit City Stores and listed on the New York Stock Exchange. That same year, Richard Sharp succeeded Alan Wurtzel as CEO. Under Sharp, the company consolidated its operations in very large stores located in clusters throughout the Southeast. These “Circuit City Superstores” encompassed up to an acre of floor space. 67 Circuit City’s approach of opening a number of large stores at once in the same region, accompanied by heavy advertising, represented a methodical determination to win the lion’s share of sales. By 1987, the company was reaping $1 billion in annual revenues and dominated the U.S. market. 68

In 1992, Circuit City expanded its offerings to include personal computers and recorded music. In 1993, Circuit City stretched its boundaries even further and opened the first CarMax used-car lot. About that time, Circuit City also found itself in an intense price war with Best Buy that pitted the companies’ sales forces against one another. Circuit City was known for its hard-sell tactics, with salespeople working for commission. In contrast, Best Buy employees enjoyed a more relaxed, self-service–oriented sales environment, in which they were paid a flat hourly rate. 69 Best Buy’s “We’re here if you need us” approach was so popular that Circuit City was forced to adapt. Yet, despite dismissing 3,900 workers and implementing an hourly pay structure, Circuit City’s 600 stores posted an annual loss of $89.3 million by the end of 2003. The company continued to restructure in 2004, closing dozens of stores at less-desirable sites and opening some 70 new stores in more ideal locations.

Circuit City’s reaction to the flat-screen price war in the early 2000s likely helped to seal its fate. A bubble in the U.S. housing market had led to a dramatic increase in demand for consumer electronics, which in turn created a flood of investment in new factories, resulting in excess supply and inventory for retailers. Then, in the fourth quarter of 2006, the housing market weakened, leading to a decline in consumer spending. To move inventory, discount retailers such as Walmart began slashing prices of flat-panel TVs, and Circuit City followed suit. By the end of 2006, flat-panel TV prices had declined between 40 and 50 percent. Prices fell so quickly during the holiday season that Circuit City’s weekly advertising circulars were often outdated by the time they reached customers. 70

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Circuit City was especially vulnerable to eroding margins caused by the price war since nearly 44 percent of its revenues came from TV sales. By November 2006, Circuit City realized a net loss of $16 million, down from a quarterly profit of $10.1 million in 2005. (See Exhibit 4 for Circuit City financial data.) Its share price plummeted 80 percent by the end of that year. 71 In an attempt to mollify investors, Circuit City CEO Schoonover fired some 3,400 of the firm’s most experienced employees and replaced them with less-costly personnel. 72 Circuit City had hoped to save $110 million in fiscal 2007 and $140 million in 2008, but in reality, the mass layoff led to poor salesmanship and lower sales. 73 Some analysts alleged that the laid-off Circuit City employees took their experi- ence and their customers to Best Buy, bolstering the company’s main competitor.

On January 5, 2008, Herb Greenberg of The Wall Street Journal named Philip Schoonover as the worst CEO of the year. 74 A few months later, Schoonover resigned and was replaced by James Marcum, who served as Circuit City’s CEO and acting president until the firm’s demise. Circuit City filed for Section 11 bankruptcy in November 2008, closing 155 stores in an attempt to preserve a future for the rest. 75 After failing to find a buyer, Circuit City began liquidation of the remainder of its assets in January 2009. The firm cited reduced consumer spending and an overall economic downturn as the reasons for its downfall. In May 2009, Systemax purchased the Circuit City brand and trademark for $6.5 million for use in online electronics retail. 76

In the year after Circuit City closed, Best Buy reported a 5.5 percent increase in market share, to approximately 22.9 percent of the $170 billion domestic market. 77 , 78 , 79 However, other retailers and e-tailers rapidly entered the fray and established significant footholds in the increasingly competitive consumer-electronics industry.

WALMART

As the world’s largest retailer, Walmart employs more than two million associates across more than 10,000 stores in 27 countries. 80 Walmart was founded by Sam Walton, who opened his first store in 1962 in Rogers, Arkansas. The young company expanded rapidly, reaching 24 stores and $12.7 million in sales within its first five years of operations. In 1969, it incorporated as Wal-Mart Stores, Inc., going public shortly thereafter in 1970 at a share price of $16.50. 81

Since then, Walmart has continued to grow aggressively by leveraging its superior capabilities in logistics and supply chain management to provide consumers with a wide breadth of merchandise at low prices. 82 Walmart stores carry products in areas such as family apparel, health and beauty aids, toys, home furnishings, housewares, hardware, lawn and garden supplies, and automotive products, in addition to consumer electronics. In 2000, the company launched Walmart.com to compete with online retailers such as Amazon.com , and it now sells more than a million products through its website. Walmart’s 2012 total sales reached $443.9 billion with a net income of $15.7 billion ( Exhibit 5 ). 83

Walmart moved aggressively into the consumer-electronics market in the wake of Circuit City’s collapse. In May 2010, the company announced that it was significantly expanding its offerings of Blu-ray players, HDTVs, home theater systems, DVDs and Blu-ray movies, and wireless products for home networks. At the same time, Walmart rolled out a dedicated area for pay-as-you-go mobile broadband products from well- respected vendors such as Verizon, Virgin, and AT&T, as well as a new pay-as-you-go program with Sprint for cellular users. The company also increased its smartphone offerings by close to 60 percent compared with 2009.

Gary Severson, senior vice president for Home Entertainment, explained Walmart’s strategy as follows: “Starting this month, customers will discover more high quality Internet-ready home entertainment products, new wireless technologies and new mobile devices in stores and online that offer simple, affordable solutions for creating a more connected life. . . . We also continue to design a well-defined shopping experience in entertain- ment that enables customers to find what they need quickly, learn about new technology, compare prices among top brands, and every day find amazing value. Our commitment to the best price and surprising value is always a top priority.” 84

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While Walmart has proven more recession-proof than many of its competitors, the anticipated increase in consumer-electronics sales never materialized. By 2012, the company announced plans to reduce the amount of floor space dedicated to electronics in its stores, a striking reversal of its previous expansion efforts. Poor elec- tronic sales were considered a primary factor in seven successive quarterly declines in U.S sales at stores open for one year or longer. According to one consultant, “It’s something Wal-Mart has needed to do for a year. You don’t need as much space in that area with products shrinking and purchases going online, and electronics has narrow profit margins. Floor space is a scarce commodity.” Walmart executive Bill Simon echoed a similar sentiment to investors in April 2011, stating that the company “couldn’t possibly sell enough TVs during the holiday season to justify the space allotted to electronics.” 85

Walmart’s strength is that it trails only Amazon in online sales of consumer electronics, with 22 percent mar- ket share and 33 percent of sales. 86 As the leading discount retailer, Walmart is also one of the few companies that stands to benefit from the commoditization of products such as HDTVs, Blu-ray players, computers, and smartphones. 87

AMAZON.COM

Founded in 1994 by Jeffrey Bezos as an online book retailer, Amazon.com’s sales grew from $8 billion in 1995 to over $61 billion in 2012 ( Exhibit 6 ). 88 Since the company went public in 1997, it has rapidly diversified into multiple product areas. 89 In 1998, Amazon.com launched its online music and video store and began to sell toys as well as consumer electronics; it added clothing in 2002, health and personal care items in 2003, and beauty products in 2004. 90 Amazon opened its marketplace to third-party vendors through the launch of its “Fulfillment by Amazon” service in 2006. This move enabled small to medium-sized businesses to utilize Amazon’s order fulfillment and customer service infrastructure, while further broadening Amazon’s own online presence. 91 More recently, Amazon has extended its vast array of products and services beyond traditional retail boundaries by offering Amazon Web Services. Its foray into cloud computing includes both infrastructure (e.g., data storage) and applications such as database services and workflow software. 92

At the same time, Amazon has engaged in an aggressive string of acquisitions, purchasing or investing in more than 70 companies since 1998. Some of these deals are aimed at increasing the breadth of products offered, such as Amazon’s acquisition of Zappos, the number-one online shoe retailer, for $890 million in 2009. Others, such as the 2012 purchase of Kiva Systems, are intended to enhance Amazon’s business operations. 93 Importantly, the company has ample amounts of cash, as well as ready access to affordable debt, to continue its buying spree well into the future. 94 Through such deals, Amazon has already grown to more than 56,000 full- and part-time employees 95 and climbed to number 56 in the Fortune 500. 96

Yet another prong of Amazon’s expansion strategy has been to enter the electronic device market directly, through the manufacture and sale of its Amazon Kindle e-reader series. As opposed to merely selling electronic books for customers to read on competitors’ technology (e.g., the iPad), Amazon now can influence the develop- ment of both the content and the underlying technology, creating an interlocking ecosystem that enhances sales in both categories. In a move that would place it on an even more direct collision course with Apple, Amazon is reportedly planning to start manufacturing smartphones. 97

Amazon’s competitive advantage comes from its breadth of selection, the convenience of online shopping coupled with same-day delivery services, and its ability to undercut competitors on price. 98 Without brick-and- mortar stores, Amazon avoids the costs of retail real estate, inventory displays, and an onsite sales force. At least for the time being, Amazon also benefits from not having to charge sales tax, unless customers reside in a state where the company has physical operations (e.g., Washington). Meanwhile, traditional retailers such as Best Buy are frustrated to find that their stores are increasingly serving as showrooms for Amazon buyers. People come in to Best Buy to try out the merchandise and speak with the trained sales associates, but then utilize their smart- phones to compare prices and purchase directly from Amazon if its prices are lower. 99

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Amazon’s strategy appears to be working. The e-tailer increased its electronics and non-media revenues by 66 percent in 2010, reaching $18 billion. From 2007 to the end of 2010, Amazon.com increased its share of LCD TV sets from 1.3 percent to 3.7 percent, and its share of portable audio-device sales increased from 4.6 percent to 11 percent. 100 According to Kantor Retailing, Amazon’s brand value increased by 37 percent in 2010, surpassing Walmart to become the most valuable retail brand worldwide. Target maintained its position at #5, while Best Buy fell two slots to #13. 101 A study by Retrevo which asked consumers, “When you think about buying electronics, who comes to mind first?” provided a strikingly similar profile. In brief, many of Amazon’s gains appear to have come largely at Best Buy’s expense (see Exhibits 7 and 8 ). 102

APPLE

Meanwhile, Apple has rolled out nearly 400 of its own retail stores worldwide since 2001, creating direct competition for Best Buy and other firms that carry Apple products. At a time when most traditional retailers are closing stores or downsizing, Apple opened 33 new stores in 2012, for a total of 250 retail locations in the United States and 140 international stores distributed across 13 countries. Net retail sales grew to $18.8 billion, a 33 percent increase over 2011 figures, and accounted for approximately 12 percent of Apple’s total sales activ- ity. 103 By the end of 2010, Morgan Stanley estimated that Apple had captured 9 percent of the U.S. electronics market, placing it second only to Amazon and Best Buy. Since then, its numbers have continued to rise in spite of less than desirable economic conditions ( Exhibit 9 ). 104

In addition to providing consumers with hands-on access to the latest iPods, iPads, iPhones, and Macs, Apple’s retail stores offer one-to-one tech support, as well as a variety of training workshops and youth programs. Apple places its stores in high-profile, high-traffic locations in quality shopping malls and districts, with the goal of attracting new customers and providing a customized shopping experience. Management believes that direct cus- tomer contact is useful in demonstrating the superior quality of Apple’s products. All of this comes at a significant cost, however. The company has spent more than $2.8 billion in capital asset purchases since the inception of its retail segment, and had outstanding lease commitments of $2.4 billion at the end of 2011. 105 Apple has also hired approximately 42,400 full-time employees to staff its retail outlets. 106

On the down side, Apple’s recent stock performance has raised concerns that the company’s products may be losing their “sex appeal” against increased competition, often at lower price points. Apple shares dropped 12 percent on a single day in January 2013, erasing some $175 billion from its market capitalization, compared to its all-time high reached in September 2012. Investors were reacting to the posting of the company’s slowest growth in profits since 2003 and its weakest sales growth in 14 quarters. Sales boosts from recent new product launches have not been as significant in either size or duration, prompting some analysts to question whether Apple’s era of rapid growth may be coming to an end. 107

TARGET

Target is the second-largest discount retailer in the United States, behind Walmart. Target was founded in 1962, when Dayton’s, a Minneapolis department store, expanded into a shopping mall in Roseville, Minnesota. The store was named Target, to distinguish the discount retailer from Dayton’s higher-end stores. From 1970 to 1990, Target grew from 24 to 420 stores through organic and inorganic growth, becoming the leading brand in the Dayton Hudson Corporation portfolio in 1977. In 1998, Dayton Hudson increased the company’s Internet pres- ence through the purchase of Rivertown Trading. In 2006, Target.com formed a partnership with Amazon.com’s Enterprise Solutions to develop better e-commerce technology that would enable it to compete more effectively online. The company continues to maintain a strong online presence as well as over 1,700 Target and Target Superstore outlets across all 50 states. Across all of its operating units, Target posted revenues of $68.5 billion in fiscal 2011, with a net income of $2.9 billion ( Exhibit 10 ). 108

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Following Circuit City’s collapse, Target likewise increased its consumer-electronics offerings, focusing on TVs, video games, and digital imaging “as part of its electronics makeover.” 109 Changes included the installation of new TV-merchandising walls to make side-by-side comparisons easier for customers, as well as expanding store inventory to include larger and more technologically advanced TV sets. At the same time, Target enlarged its video game section by a third and added demo stations for players to try out new releases. Target was also the first physical retailer to carry Amazon’s Kindle e-book reader. 110 The company added a TV delivery and installation service in January 2010. 111

In August 2010, Mark Schinele, senior vice president of Target, unveiled three new consumer-electronics services to further enhance consumers’ shopping experience: 1-877-myTGTtech, Target Mobile, and Target Electronics Trade-In. In his words, “Our goal is to create the best and easiest shopping experience for our guests. As we continue to grow and enhance our consumer electronics business, we designed 1-877-myTGTtech to assist guests with any questions and technical support on their electronics purchases. . . . Target Electronics Trade-In offers our guests an opportunity to upgrade their consumer electronics items for less. And Target Mobile ensures a convenient cell phone shopping experience.” 112 All three services were rolled out nationwide in 2011. In 2013, Target terminated its mobile partnership with RadioShack and inked new agreements with Brightstar and MarketSource, to ensure its customers with continued access to the latest mobile products and services. 113

Analysts like Target’s focus on phones because of the limited footprint required, 114 and generally believe that there is room for Target’s approach in the intensely competitive consumer-electronics market. While Walmart dominates in terms of brand recognition, breadth of selection, and low-cost pricing, Target caters to more of a middle- and upper-class clientele that is likely to appreciate its enhanced service offerings. 115 As a general mer- chandiser, Target also sees much higher foot traffic than Best Buy, and can capitalize on spur-of-the-moment purchases and customers’ desire for a one-stop shopping experience. 116

Signaling its future competitive intent in this arena, Target extended its holiday price matching policy year round starting in January 2013, promising to match prices offered by both physical and online competitors. It also announced that it would no longer carry Kindle readers as of May of that same year, in an apparent effort to limit Amazon’s growth. Instead, Target forged a new agreement with Apple to sell iPods, iPads, iPhones, and related products in its stores, placing it in even more direct competition with Walmart and Best Buy. 117

Best Buy’s Comeback Strategy

Compared with its major competitors, Best Buy’s stock price has taken a beating (see Exhibit 11 ). Shortly after assuming office, CEO Joly shared a broad outline of his turnaround plan—dubbed “Renew Blue”—with inves- tors. Beyond some long-awaited improvements in operational performance and efficiency, his vision included attracting transformational leaders, reinvigorating the customer experience, energizing Best Buy’s rank-and-file employees, and investing in private-label brands. 118

ATTRACT TRANSFORMATIONAL LEADERS

One of Joly’s first objectives was to create a top management team with the necessary expertise and passion for leading Best Buy’s transformation. Dunn had started down this pathway by luring Stephen Gillett away from Starbucks to serve as Best Buy’s President of Digital and Global Business Services in March 2012. As Starbucks’ CIO and head of Digital Ventures, Gillett was credited with integrating technology into the coffee shop experi- ence, by creating smartphone apps, a mobile payment system linked to loyalty cards, and providing free Wi-Fi connectivity in stores. 119 At Best Buy, Gillett’s primary task was to create an integrated, multichannel retail expe- rience through the use of innovative technology while improving the company’s operations. 120

Dunn’s interim successor, Mike Mikan, was responsible for hiring Matthew Furman as the company’s Senior Vice President of Communications and Public Affairs in June 2012. Furman previously served as the Vice

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President of Corporate Affairs at Mars Chocolate, and had also worked in various communications positions for Google, ChoicePoint, and even President Bill Clinton. His main objective was to tell Best Buy’s story—“where it’s been, where it intends to go and how it’s going to get there”—with “consistency, clarity and passion” to the firm’s multiple stakeholder audiences. 121

Still, Joly felt that several more key hires were needed. In October 2012, he recruited Scott Durchslag to Best Buy’s growing executive team as President of Online and Global e-Commerce, reporting to Gillett in the technol- ogy division. He was given the reigns to BestBuy.com, along with instructions to create a world-class e-commerce experience. Durchslag hailed most recently from Expedia Worldwide, where he was responsible for managing strategy, product development, marketing, and operations for the company’s 27 global sites. In prior posts, he served as the chief operating officer of Skype and corporate vice president of Motorola, where he helped launch the RAZR line of mobile phones. Durchslag started his business career at McKinsey & Company, rising quickly through the ranks and making partner in just four years. 122 When his boss, Stephen Gillett, left Best Buy for Semantec in December 2012, Durchslag assumed leadership for the entire online division. 123

Sharon McCollam joined Best Buy in November as the company’s new Chief Administrative and Chief Financial Officer, with responsibility for all global financial activities. Earlier in 2012, she had retired from a similar post at Williams-Sonoma, a U.S.-based home furnishings retailer. Sharon was regarded highly for her skills as a cross-functional leader and her track record of producing strong financial results. She had worked in the financial field throughout her professional life, starting out in public accounting at Ernst & Young and then moving up through the controller ranks at Dole Food Company. 124

With his lead players in place, Joly’s next move was to restructure the business effective January 1, 2013. He created two channels, online and retail, and promoted insider Shawn Score to lead the U.S. retail unit. Shawn had held a variety of positions over his 27-year history with Best Buy, but most recently served as senior vice president and general manager of the Connectivity Business Group. In turn, Jude Buckley was promoted from chief operat- ing officer to head of the Connectivity Business Group. His prior experience included several years as managing director for the Carphone Warehouse and as an investment banker and tax accountant in Europe and Australia. There were no leadership changes for the two other business groups: Mike Mohan remained head of the Home sector, and George Sherman continued to run the Services unit. All unit heads reported directly to Joly, at least for the time being. 125 Joly hoped that the simplified organizational and reporting structure would enable Best Buy to become more flexible and responsive to market demands.

REINVIGORATE THE CUSTOMER EXPERIENCE

Best Buy’s strategy had long been characterized by a commitment to customer-centricity attained through in-depth data analysis and systematic customer segmentation. The company’s Purchase Path Solutions project with Accenture enabled it to collect and mine masses of customer data, which it then used to design its stores and train its salespeople. An internal analyst described the company’s goals as follows: “We needed to make sure that the district, territory, and store teams have the tools that they need to actually look at things like: what kind of traffic do they have coming in their stores today, how effectively are they selling to the people that are in the stores today, what do their close rates look like, what does their customer information look like, what segments do they have coming in, what kind of market share do they have for those segments. . . . We have invested in the right tools so that the field knows what to focus on and can identify what indicators to move a little bit that will help us a lot.” 126

The term customer-centricity indicates a business orientation that caters to specific customer needs and behav- iors. Compared to traditional product-centered marketing, customer-centricity looks at a business from the “out- side in,” asking what problems its customers are facing, and then providing solutions. 127 The firm then customizes sales strategies to appeal to the more lucrative customer segments (“angels”) and to discourage the “devils” who actually cost the store money (i.e., buying returned merchandise, loading up on loss leaders, insisting on price matching, and so on). 128

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Through market research, Best Buy had identified four overarching segments that accounted for 90 percent of its customer base: Urban Trendsetters, Upscale Suburban, Empty Nesters, and Middle America. Each was asso- ciated with a male and a female persona that encompassed all of the associated customer characteristics. 129 For example, “Jill” was an “Upscale Suburban” mom who appreciates personal shopping assistants who can help her find the right products for her family quickly. She usually purchased items with accessories and required help with installation. 130 Stores were specifically configured to serve the needs of the predominant customer segment(s) in a given region. 131 Despite renovation expenses that approach $1 million per store, former CEO and Vice Chairman Brad Anderson claimed that stores that were configured toward local demographics doubled their growth rate compared with other company stores.

The problem was that all of these data regarding in-store customers did not necessarily transfer to the online setting, which was an increasingly important part of Best Buy’s revenue stream. Instead, Joly recognized the need to create a “leading edge, multichannel shopping experience,” where customers could move fluidly between “bricks” and “clicks.” Though short on details, he promised to put the “pedal to the metal in digital” while “evolv- ing the design” of both the company’s online platform and its physical stores. Joly also hoped to build more “engaged and rewarding relationships with customers” by strengthening Best Buy’s membership programs. 132 Ultimately, Joly’s goal was to increase both in-store and online conversion rates, so that each customer contact was more likely to lead to a sale. Currently, only 1.3 percent of customers who visited Best Buy’s website actually made a purchase, while approximately 15 percent of in-store visitors openly admitted to showrooming (shopping with the explicit intent to purchase from another vendor online). 133

ENERGIZE EMPLOYEES

To create a truly unique, multichannel customer experience, Joly knew he would need a nimble, educated, and motivated sales force. The “Blue Shirts” had played a key role in the battle for market share against Circuit City, and Joly believed they were equally essential to Best Buy’s future. Fortunately, Best Buy already had a strong reputation for innovative human resource practices.

Soon after unveiling its customer-centricity program, the company realized that the same principles applied equally well to its employees. The corporate communications team therefore set up an employee-listening pro- gram that used open communication to better understand the needs of its workers. Techniques included simple tools such as annual company-wide surveys, a virtual discussion board (“The Water Cooler”), and one-on-one dialogue sessions. Best Buy filtered the data collected from these methods to discern issues that were important to employees but about which management was previously unaware. 134

Similarly, Best Buy was one of the first companies to experiment with implementing a “results-only work environment” (ROWE) in the retail industry. 135 In place at the company’s headquarters near Minneapolis since 2005, ROWE permitted employees to set their own schedules as long as they completed their tasks successfully. Bosses had no role in scheduling, and could judge only whether a task was accomplished on time and in a satisfactory manner, even if none of the work occurred at the office. Best Buy estimated that employee productivity increased by 35 percent in departments in which the policy had been implemented, and also believed it helped reduce staff turnover. 136

In addition, Best Buy had been honored on multiple occasions for its efforts on behalf of minority groups. For example, the company had received recognition from the Rehabilitation Association and Springboard Consulting for its efforts in recruiting, hiring, and accommodating persons with disabilities. The Human Rights Campaign had repeatedly named the firm as one of the “Best Places to Work” based on its support of gay, lesbian, bisexual, and transgender equality in the workplace. 137 In 2010, the American Muslim Consumer Conference (AMCC) gave Best Buy its Multicultural Award for its acknowledgment of all gifting holidays from November to January, including Eid. According to AMCC, Best Buy was the only retail company to recognize this important Muslim festival throughout all of its U.S. locations. 138

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Yet one of the first things Joly noted during his week on the sales floor was the wide variance in the quality of salespeople; clearly, more (and better) training was needed. Instead of having general sales personnel who knew a little about many products, he envisioned a cadre of highly trained specialists who could answer questions related to a specific product category more quickly and more effectively than searching on the Internet. 139 Another signif- icant challenge was employee morale, which was at an all-time low after three years of poor sales, store closings, and lay-offs, not to mention the analysts’ ongoing predictions of Best Buy’s impending demise. 140 Joly made the controversial decision to end the company’s ROWE at its Minneapolis headquarters out of the firm belief that “all hands were needed on deck” at this time of crisis, but nevertheless worried about the potential negative effects on employee motivation and performance. 141

BUILD EXCLUSIVE BRANDS

Finally, Joly saw Best Buy’s portfolio of private-label brands (Insignia, Dynex, Init, Rocketfish, Geek Squad, and others) as an increasingly important part of Best Buy’s defense against online competitors. 142 Insignia focused on electronic equipment, including televisions, monitors, car stereos, home-theater systems, and portable video and audio players. Dynex produced a wide variety of economically priced computer and entertainment accessories such as storage media, data and power cables, webcams, and office supplies, with recent forays into electronics such as high-definition LCD televisions. Init offered storage solutions for many of the products made by both Insignia and Dynex, including media storage, equipment bags, totes, and furniture for home theaters. Rocketfish’s high-end cables were predominantly used in home-theater installation and setup as well as on computer accessories, providing another complementary product line. The Geek Squad was the most well-known of all of Best Buy’s private brands, and provided both computer repair and installation services as well as high-end computer accessories and cables.

Having such “exclusives” not only protected against “showrooming,” but also helped the company compete more effectively against competitors with their own branded products. 143 In late 2012, Best Buy announced plans to introduce a new tablet called the Insignia Flex to compete directly with the Amazon Kindle, Apple iPad, and other similar devices. 144 Joly was also considering acquiring or licensing even more name brands such as Hitachi or JVC as part of his turnaround strategy. 145

Decision Time

With the basic scaffolding of his turnaround plan in place, Joly knew the really hard work was just about to begin. Changing the organizational structure and bringing in new staff were relatively simple actions; by far the bigger challenge would be translating his vision into a strategic plan that could be implemented throughout the organiza- tion. What should Best Buy’s new integrated “clicks” and “bricks” platform look like? What kinds of exclusive brands, membership programs, and services would be most effective in building customer loyalty and converting site visits to sales? What new systems—information technology, accounting, operations, or otherwise—would be required? How could the senior management team get the rank-and-file employees to believe in a new and improved Best Buy and then equip them with the skills they would need to be successful in a multichannel retail world?

Losing Stephen Gillett in December, after only nine months on the job, was a huge blow for at least two reasons. First, the analysts loved him; even some of Best Buy’s harshest critics saw hope for the firm as long as Gillett was in the picture. Without him, a financial blogger wrote, Best Buy’s stock was “worse than a strong sell; you should take the name off of your radar. Don’t touch it with your worst enemy’s ten-foot pole and especially his or her trading plat- form. . . . Best Buy will fail as a retail company whereas it could have and should have given itself a fighting chance by morphing into a tech company like Starbucks.” 146 Second, the employees believed in him and his vision for integrating the digital and physical retail worlds, and had finally started to have hope for Best Buy’s future again. Gillett’s nick- name around the company was Neo, after the hero in the movie The Matrix. 147 Scott Durchslag was perhaps equally as talented, but he had some big shoes to fill as the newly named head of Best Buy’s global e-commerce division.

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Yet another significant distraction was the ongoing battle in the boardroom between founder Richard Schulze and the rest of the directors (several of whom had been responsible for Schulze’s ouster earlier in the year). Not content to see his “baby” suffer, Schulze approached the board with a bid to take the company private in August 2012. He initially offered a price of $24 to $26 a share (a 47 percent premium) to purchase the remaining 80 per- cent of the company that he did not already own. Had the board accepted his initial proposal, the $8.8 billion deal would have been the largest buyout of a U.S. retailer in history. 148

Instead, Schulze and the board negotiated an agreement to allow him to conduct due diligence with access to nonpublic information about the company and then bring forth a second, fully financed proposal within 60 days. In the meantime, the board offered Schulze two board seats, in proportion to his ownership in the firm. 149 In December, the parties mutually agreed to extend the due diligence period again to allow Schulze to have access to year-end financials, pushing the date for a final offer back to February 2013. 150 Schulze failed to find enough private equity investors to broker the deal by the February deadline, however, and was starting to consider other options, such as taking a stronger minority stake in the firm. 151

In the meantime, Joly had no choice but to proceed with his turnaround plan as if no major potential changes in ownership—or leadership—were pending. Either way, the stakes were high. Analysts were looking at Best Buy as a test case of how big-box retailers could adapt to a digital world. Under Joly’s vision, Best Buy was trying to “be all things to all shoppers: a high-end customer-service experience to rival the Apple Store, an infinite online warehouse that can compete on price with the likes of Amazon, a retail chain for the personal–tech powerhouses, and a friendly retail partner for garage inventors. It [would] combine mass-market and niche in a way no store has ever been able to pull off.” If it could successfully transform itself and “find a place for traditional retail in the smartphone age,” Best Buy might just “provide a glimpse of what the future might look like for other big-box stores.” Its failure, on the other hand, could well “signal their demise.” 152

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Fiscal Year 2008 2009 2010 2011 2012

Cash and short-term investments 996 2,398 1,613 1,658 2,189

Receivables–total 1,868 2,020 2,348 2,288 2,704

Inventories–total 4,753 5,486 5,897 5,731 6,571

Property, plant, and equipment–total (net) 4,174 4,070 3,823 3,471 3,270

Depreciation, depletion, and amortization (accumulated) 2,766 3,383 4,082 4,781 5,105

Assets–total 15,826 18,302 17,849 16,005 16,787

Accounts payable–trade 4,997 5,276 4,894 5,364 6,951

Long-term debt 1,126 1,104 711 1,685 1,153

Liabilities–total 10,670 11,338 10,557 11,639 13,072

Stockholders’ equity–total 4,643 6,320 6,602 3,745 3,061

Sales (net) 45,015 49,694 50,272 50,705 45,085

Cost of goods sold 33,215 36,590 36,619 37,173 33,439

Selling, general, and administrative expense 8,984 9,873 10,325 10,242 9,502

Income taxes 674 802 714 709 231

Income before extraordinary items 1,003 1,317 1,277 2 1,057 2 443

Net income (loss) 1,003 1,317 1,277 2 1,231 2 441

Earnings per share (basic) excluding extraordinary items 2.43 3.16 3.14 2 2.89 2 1.31

Earnings per share (diluted) excluding extraordinary items 2.39 3.10 3.08 2 2.89 2 1.31

Source: Compustat.

EXHIBIT 1 Best Buy Financial Data, 2008–2012 (in $ millions, except EPS data)

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Global Computer & Electronic Retail Sector Value

Year $ Billions € Billions % Growth

2007 449.8 323.3

2008 464.9 334.2 3.4%

2009 463.1 332.9 (0.4%)

2010 490.3 352.4 5.9%

2011 514.2 369.6 4.9%

CAGR: 2007–11 3.4%

Source: MarketLine Industry Profile: Global Computer & Electronics Retail. Reference Code: 0199-2025, May 2012, www.marketline.com .

EXHIBIT 2 Global Computer and Electronics Retail Industry, 2007–2011

2007 0

100

200

300

400

500

600

$ B

ill io

% G

ro w

th 2008 2009

Year 2010 2011

$ Billions

% Growth

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EXHIBIT 3 Market Share in the Global Computer and Electronics Retail Sector, % Share, 2011

Source: MarketLine Industry Profile: Global Computer & Electronics Retail. Reference Code: 0199-2025, May 2012, www.marketline.com .

Walmart Stares, Inc.

Metro AG

Other

Best Buy Co., Inc.

Apple Inc.

73.7%

11.3%

6.2%

5.6%

3.2%

Fiscal Year 2003 2004 2005 2006 2007

Cash and short-term investments 783 1,005 838 739 297

Receivables–total 580 173 226 425 489

Inventories–total 1,517 1,460 1,698 1,637 1,574

Property, plant, and equipment–total (net) 586 739 839 921 1,037

Depreciation, depletion, and amortization (accumulated) 1,021 1,104 1,179 1,300 1,448

Assets–total 3,633 3,789 4,069 4,007 3,746

Accounts payable–trade 830 962 1,053 1,114 1,108

Long-term debt 23 12 52 50 57

Liabilities–total 1,409 1,702 2,114 2,216 2,243

Stockholders’ equity–total 2,224 2,087 1,955 1,791 1,503

Sales (net) 9,778 10,478 11,598 12,430 11,744

Cost of goods sold 7,320 7,749 8,603 9,320 9,131

Selling, general, and administrative expense 2,266 2,487 2,620 2,806 2,775

Income taxes 0 36 88 31 2 32

Income before extraordinary items 2 1 60 151 2 10 2 321

Net income (loss) 2 89 62 140 2 8 2 320

Earnings per share (basic) excluding extraordinary items 2 0.43 0.32 0.79 2 0.05 2 1.94

Earnings per share (diluted) excluding extraordinary items 0 0.31 0.84 2 0.06 2 1.95

Source: Compustat.

EXHIBIT 4 Circuit City Financial Data, 2003–2007 (in $ millions, except EPS data)

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Fiscal Year 2008 2009 2010 2011 2012

Cash and short-term investments 7,275 7,907 7,395 6,550 7,781

Receivables–total 3,905 4,144 5,089 5,937 6,768

Inventories–total 34,511 33,160 36,318 40,714 43,803

Property, plant, and equipment–total (net) 95,653 102,307 107,878 112,324 116,681

Depreciation, depletion, and amortization (accumulated) 35,508 41,210 46,611 48,614 55,043

Assets–total 163,429 170,706 180,663 193,406 203,105

Accounts payable–trade 28,849 30,451 33,557 36,608 38,080

Long-term debt 34,549 36,401 43,842 47,079 41,417

Liabilities–total 95,953 97,470 109,008 117,241 120,848

Stockholders’ equity–total 65,285 70,749 68,542 71,315 76,343

Sales (net) 402,298 406,103 420,016 444,948 467,231

Cost of goods sold 299,419 297,500 307,646 326,997 343,987

Selling, general, and administrative expense 76,299 79,347 81,020 85,199 88,873

Income taxes 7,145 7,139 7,579 7,944 7,981

Income before extraordinary items 13,254 14,414 15,355 15,766 16,999

Net income (loss) 13,400 14,335 16,389 15,699 16,999

Earnings per share (basic) excluding extraordinary items 3.36 3.73 4.20 4.56 5.04

Earnings per share (diluted) excluding extraordinary items 3.35 3.72 4.18 4.54 5.02

Source: Compustat.

EXHIBIT 5 Walmart Financial Data, 2008–2012 (in $ millions, except EPS data)

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Fiscal Year 2008 2009 2010 2011 2012

Cash and short-term investments 3,727 6,366 8,762 9,576 11,448

Receivables–total 711 836 1,324 2,134 2,600

Inventories–total 1,399 2,171 3,202 4,992 6,031

Property, plant, and equipment–total (net) 854 1,290 2,414 4,417 7,060

Depreciation, depletion, and amortization (accumulated) 555 625 842 1,369 2,522

Assets–total 8,314 13,813 18,797 25,278 32,555

Accounts payable–trade 3,594 5,605 8,051 11,145 13,318

Long-term debt 533 252 641 1,415 3,830

Liabilities–total 5,642 8,556 11,933 17,521 24,363

Stockholders’ equity–total 2,672 5,257 6,864 7,757 8,192

Sales (net) 19,166 24,509 34,204 48,077 61,093

Cost of goods sold 14,585 18,594 26,009 36,288 44,271

Selling, general, and administrative expense 3,452 4,300 6,131 9,773 14,287

Income taxes 247 253 352 291 428

Income before extraordinary items 645 902 1,152 631 2 39

Net income (loss) 645 902 1,152 631 2 39

Earnings per share (basic) excluding extraordinary items 1.52 2.08 2.58 1.39 2 0.09

Earnings per share (diluted) excluding extraordinary items 1.49 2.04 2.53 1.37 2 0.09

Source: Compustat.

EXHIBIT 6 Amazon Financial Data, 2008–2012 (in $ millions, except EPS data)

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EXHIBIT 7 Top 20 Most Valuable Retail Brands

The Top 20 Most Valuable Global Retail Brands, 2011

# Brand

Parent

Company

Brand Value

$US Billions

Brand

Value

Change

YOY

Brand

Contribution

Brand

Momentum

1. amazon.com US Amazon.com, Inc.

$37,628 37% 3 10

2. Walmart US Wal-Mart Stores, Inc.

$37,277 25% 2 5

3. Tesco UK Tesco plc $21,834 215% 4 7

4. Carrefour France Carrefour SA $13,754 28% 3 7

5. Target US Target Corp. $12,471 3% 3 3

6. eBay US eBay, Inc. $10,731 15% 2 8

7. The Home Depot US Home Depot, Inc. $9,877 10% 2 3

8. Aldi Germany Aldi Einkauf GmbH

$9,251 6% 2 4

9. Auchan France Auchan SA $7,796 21% 3 7

10. IKEA Sweden Ikea International

$7,293 28% 2 6

11. Lowe’s US Lowe’s Cos., Inc. $6,522 27% 2 3

12. Marks & Spencer UK Marks & Spencer plc

$5,252 -8% 3 4

13. Best Buy US Best Buy Co., Inc.

$5,104 212% 3 3

14. Costco US Costco Wholesale Corp.

$4,544 17% 1 4

15. Lidl Germany Lidl & Schwarz $4,240 3% 1 4

16. Kohl’s US Kohl’s Corp. $4,003 28% 3 4

17. ASDA UK Wal-Mart Stores, Inc.

$3,975 219% 2 4

18. Sam’s Club US Wal-Mart Stores, Inc.

$2,935 210% 2 2

19. Sainbury’s UK J Sainsbury Plc $2,685 22% 3 5

20. Safeway US Safeway, Inc. $2,012 237% 2 3

Notes: Brand contribution measures the degree to which brand plays a role in generating earnings. It is displayed as an index from 1 to 5, 5 being the greatest brand contribution. Brand momentum measures the growth potential of brand-driven earnings. It is displayed as an index from 1 to 10—10 being the greatest potential.

Source: Adapted from Kantar Retail, Milward Brown Optimor.

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EXHIBIT 8 Customer Perceptions

When you think about buying electronics, who comes to mind first?

Source: Adapted from www.retrevo.com/content/bestbuy-competitors-gained-ground (January 5, 2010).

Best Buy 0

50 44%

40%

11% 15% 15% 14%

30% 31%

Amazon Walmart Other

2008 2009

Fiscal Year 2008 2009 2010 2011 2012

Cash and short-term investments 24,490 23,464 25,620 25,952 29,129

Receivables–total 4,704 5,057 9,924 11,717 18,692

Inventories–total 509 455 1,051 776 791

Property, plant, and equipment–total (net) 2,455 2,954 4,768 7,777 15,452

Depreciation, depletion, and amortization (accumulated) 1,292 1,713 2,466 3,991 6,435

Assets–total 39,572 47,501 75,183 116,371 176,064

Accounts payable–trade 5,520 5,601 12,015 14,632 21,175

Long-term debt 0 0 0 0 0

Liabilities–total 18,542 15,861 27,392 39,756 57,854

Stockholders’ equity–total 21,030 31,640 47,791 76,615 118,210

Sales (net) 32,479 42,905 65,225 108,249 156,508

Cost of goods sold 20,898 24,999 38,609 62,609 84,641

Selling, general, and administrative expense 4,870 5,482 7,299 10,028 13,421

Income taxes 2,061 3,831 4,527 8,283 14,030

Income before extraordinary items 4,834 8,235 14,013 25,922 41,733

Net income (loss) 4,834 8,235 14,013 25,922 41,733

Earnings per share (basic) excluding extraordinary items 5.48 9.22 15.41 28.05 44.64

Earnings per share (diluted) excluding extraordinary items 5.36 9.08 15.15 27.68 44.15

Source: Compustat.

EXHIBIT 9 Apple Financial Data, 2008–2012 (in $ millions, except EPS data)

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Fiscal Year 2008 2009 2010 2011 2012

Cash and short-term investments 893 2,200 1,712 794 784

Receivables–total 8,753 7,882 7,075 6,927 6,857

Inventories–total 6,705 7,179 7,596 7,918 7,903

Property, plant, and equipment–total (net) 25,756 25,280 25,493 29,149 30,653

Depreciation, depletion, and amortization (accumulated) 9,060 10,485 11,555 12,382 13,311

Assets–total 44,106 44,533 43,705 46,630 48,163

Accounts payable–trade 6,337 6,511 6,625 6,857 7,056

Long-term debt 17,490 15,118 15,607 13,697 14,654

Liabilities–total 30,394 29,186 28,218 30,809 31,605

Stockholders’ equity–total 13,712 15,347 15,487 15,821 16,558

Sales (net) 64,948 65,357 67,390 69,865 73,301

Cost of goods sold 44,157 44,062 46,585 48,306 51,035

Selling, general, and administrative expense 14,563 14,599 13,469 14,106 14,914

Income taxes 1,322 1,384 1,575 1,527 1,610

Income before extraordinary items 2,214 2,488 2,920 2,929 2,999

Net income (loss) 2,214 2,488 2,920 2,929 2,999

Earnings per share (basic) excluding extraordinary items 2.87 3.31 4.03 4.31 4.57

Earnings per share (diluted) excluding extraordinary items 2.86 3.30 4.00 4.28 4.52

Source: Compustat.

EXHIBIT 10 Target Financial Data, 2008–2012 (in $ millions, except EPS data)

EXHIBIT 11 Share Performance of Major Competitors

Source: Google Finance, http://www.google.com/finance .

Jan’12 Apr’12 Jul’12 Oct’12 Jan’13

Apple Best Buy Target AmazonWalmart

260%

240%

220%

20%

40%

60%

80%

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Endnotes

1 . Copeland, M. V. (2012), “Death by a billion clicks,” http://www.wired.com/business/2012/11/mf-best-buy-comeback/all/ .

2 . Best Buy 2012 Annual Report.

3 . http://pr.bby.com/best-buy-confirms-significant-decline-in-fiscal-third-quarter-2013-earnings/ .

4 . http://pr.bby.com/best-buy-announces-holiday-revenue-results-2/ .

5 . http://www.startribune.com/business/179174861.html .

6. Copeland, M. V. (2012), “Death by a billion clicks.”

7 . http://pr.bby.com/joly-starts-first-official-day-as-president-chief-executive-officer-of-best-buy/ .

8 . Copeland, M. V. (2012), “Death by a billion clicks.”

9 . Bustillo, M., and M. Jarzemsky (2011), “Best Buy gets squeezed,” The Wall Street Journal, September 14.

10 . http://www.reuters.com/article/2012/11/13/us-bestbuy-meeting-idUSBRE8AC0V120121113 .

11 . http://finance.yahoo.com/news/best-buy-hires-joly-ceo-111702654--finance.html .

12 . Best Buy Timeline, www.bby.com/wp-content/uploads/2010/04/BBY_TimeLine.pdf.

13 . Best Buy Co., Inc. (October 1), Hoover’s Company Records, 10209.

14 . Best Buy Timeline.

15 . Ibid.

16 . Best Buy Co., Inc. (October 1), Hoover’s Company Records, 10209.

17 . “Best Buy and Circuit City: The gloves come off,” Bernstein Research, April 1994, http://web.ebscohost.com/bsi/ pdf?vid=10&hid=111&sid=260056c3-7252-467f-acdf-688f3a981bfa%40sessionmgr13 .

18 . www.fundinguniverse.com/company-histories/Best-Buy-Co-Inc-Company-History.html .

19 . www.bby.com/wp-content/uploads/2010/04/BBY_TimeLine.pdf .

20 . Best Buy’s annual 10-K filing. Filed February 27, 2010, www.sec.gov/Archives/edgar/ data/764478/000104746910004349/a2197223z10-k.htm .

21 . www.fundinguniverse.com/company-histories/Best-Buy-Co-Inc-Company-History.html .

22 . Best Buy Timeline, www.bby.com/wp-content/uploads/2010/04/BBY_TimeLine.pdf .

23 . www.fundinguniverse.com/company-histories/Best-Buy-Co-Inc-Company-History.html .

24 . www.crn.com/news/channel-programs/189400424/anatomy-of-a-marriage-how-best-buy-acquired-integrator- audiovisions.htm;jsessionid=X-sfiMfEl7ZesiicnLiDSQ**.ecappj03 .

25. “Pacific Sales will be acquired in deal valued at $410 million,” The Wall Street Journal, December 23, 2005.

26 . www.speakeasy.net/press/pr/pr032707.php .

27 . www.reuters.com/article/idUSN1550308820080915 .

28 . www.fundinguniverse.com/company-histories/Best-Buy-Co-Inc-Company-History.html .

29 . Best Buy 2012 Annual Report.

30 . “Best Buy will pay $180 million for majority of China’s Jiangsu,” The Wall Street Journal, May 13, 2006.

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31 . www.icmrindia.org/casestudies/catalogue/Business%20strategy/BSTR299.htm .

32 . Best Buy 2012 Annual Report.

33 . Ibid.

34 . Copeland, M. V. (2012), “Death by a billion clicks.”

35 . Bustillo, M., and M. Jarzemsky (2011), “Best Buy gets squeezed.”

36 . Bustillo, M. (2011), “Best Buy to shrink ‘big box’ strategy,” The Wall Street Journal, April 14.

37 . http://www.marketwatch.com/story/best-buy-laying-off-600-from-geek-squad-2012-07-06 .

38 . Bustillo, M. (2011), “Best Buy to shrink ‘big box’ strategy.”

39 . Best Buy Annual Report 2012.

40 . Bustillo, M., and M. Jarzemsky (2011), “Best Buy gets squeezed.”

41 . Ibid.

42 . http://www.twincities.com/ci_20363423/best-buy-brian-dunn-resigns-ceo-struggling-electronics .

43 . http://pr.bby.com/best-buy-releases-results-of-independent-investigation-new-chairman-of-the-board-elected/ .

44 . Ibid.

45 . http://pr.bby.com/best-buy-announces-leadership-transition-interim-ceo-named-to-lead-company/ .

46 . http://pr.bby.com/best-buy-releases-results-of-independent-investigation-new-chairman-of-the-board-elected/ .

47 . http://pr.bby.com/joly-starts-first-official-day-as-president-chief-executive-officer-of-best-buy/ .

48 . http://online.wsj.com/article/SB10000872396390443855804577600184241954866.html .

49 . “Radio, television, consumer electronics, and music stores,” Encyclopedia of American Industries, Online Edition, Gale, 2009. Reproduced in Business and Company Resource Center (Farmington Hills, MI: Gale Group), http://galenet.galegroup. com/servlet/BCRC .

50 . Ibid.

51 . Ibid.

52 . Ibid.

53 . www.novelguide.com/a/discover/cps_02/cps_02_00304.html .

54. “Radio, television, consumer electronics, and music stores,” Encyclopedia of American Industries.

55 . “Rewiring Best Buy: A longer look at capital allocation and acquisition strategies,” Bernstein Weekly Note, May 16, 2008.

56 . MarketLine industry profile: Global computer & electronics retail. Reference Code: 0199-2025, May 2012, www. marketline.com .

57 . Best Buy’s third-quarter 10-Q filing. Filed August 28, 2010, www.sec.gov .

58 . “Industry profile global—Computer & electronics retail,” Datamonitor PLC.

59 . MarketLine industry profile: Global computer & electronics retail. Reference Code: 0199-2025, May 2012, www. marketline.com .

60 . http://seekingalpha.com/article/562821-why-wal-mart-beats-its-competitors .

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61 . Rourke, E., A. Woodward, and D. Salamie (1994), “Circuit City Stores, Inc.,” International Directory of Company Histories, Vol. 65, 1994.

62 . Ibid.

63 . Ibid.

64 . Ibid.

65 . Ibid.

66 . Ibid.

67 . Ibid.

68 . Ibid.

69 . Ibid.

70 . Lynch, D. J. (2007), “Flat-panel TVs display effects of globalization,” USA Today, May 8, www.usatoday.com/educate/ college/business/articles/20070513.htm .

71 . www.mediapost.com/publications/index.cfm?fa=Articles.showArticle&art_aid=52831 .

72. “Circuit City revamps its retail strategy,” Washington Post, February 9, 2007.

73 . www.hci.org/category/tracks/talent-communities/talent-strategy/workforce-planning?page=18 .

74 . Herb Greenberg (2008), “‘Worst CEOs of year—of 2008, that is,” The Wall Street Journal, January 5, http://online.wsj. com/news/articles/SB119949836459369317 .

75 . www.marketwatch.com/story/circuit-city-may-shut-stores-to-avoid-bankruptcy-report .

76 . www.internetretailer.com/2009/05/29/a-tale-of-two-bankruptcies-systemax-nabs-circuitcity-com-linen .

77 . Best Buy 2010 Shareholder Meeting Presentation, June 24, 2010, http://phx.corporate-ir.net/External.File?item=UGFyZ W50SUQ9Mzg3NDk3fENoaWxkSUQ9MzkwMDEwfFR5cGU9MQ= = &t=1 .

78 . “Profit at Best Buy beats expectations,” The New York Times, March 25, 2010.

79 . “Best Buy Co, Inc.,” Datamonitor, June 25, 2010, www.datamonitor.com .

80 . http://www.walmartstores.com/sites/annual-report/2012/WalMart_AR.pdf .

81 . http://corporate.walmart.com/our-story/heritage/history-timeline .

82 . Walmart.com USA, LLC (December 15), Hoover’s Company Records, 125250. Retrieved December 20, 2010, from Hoover’s Company Records. Document ID: 548531731.

83 . http://www.walmartstores.com/sites/annual-report/2012/WalMart_AR.pdf .

84 . http://hothardware.com/News/Walmart-Expands-Consumer-Electronics-Offerings/ .

85 . http://www.bloomberg.com/news/2011-04-12/wal-mart-plans-to-reduce-space-for-electronics-in-stores.html .

86 . http://seekingalpha.com/article/562821-why-wal-mart-beats-its-competitors .

87 . http://www.forbes.com/sites/lauraheller/2013/01/09/walmart-defies-ce-recession/ .

88 . http://finance.yahoo.com/q/is?s=AMZN+Income+Statement&annual .

89 . Jannarone, J. (2011), “Forecast for Best Buy: Worst is yet to come.”

90 . http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-corporateTimeline .

91 . http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-newsArticle&ID=906817 .

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92 . http://aws.amazon.com/products/ .

93 . http://www.marketintelligencecenter.com/articles/244873 .

94 . Ibid.

95 . Amazon 2011 Annual Report.

96 . http://money.cnn.com/magazines/fortune/fortune500/2012/full_list/ .

97 . http://seekingalpha.com/article/735201-amazon-s-competitive-advantage-growth-opportunities-make-it-a-buy .

98 . Ibid.

99 . “Best Buy feels the pressure of rivals on the web,” The New York Times, December 18, 2010.

100 . Ibid.

101 . http://www.kantarretail.com/top20/BrandZRetailTop20.pdf .

102 . www.retrevo.com/content/bestbuy-competitors-gained-ground .

103 . Apple 2012 Annual Report, http://investor.apple.com/secfiling.cfm?filingID=1193125-11-282113&CIK=320193 .

104 . www.tuaw.com/2010/04/28/apple-retail-store-sales-climb-8/ .

105 . Apple 2011 Annual Report, http://investor.apple.com/secfiling.cfm?filingID=1193125-11-282113&CIK=320193 .

106 . Apple 2012 Annual Report.

107 . http://www.bloomberg.com/news/2013-01-23/apple-s-holiday-sales-miss-predictions.html .

108 . Target 2011 Annual Report, https://corporate.target.com/annual-reorts/2011/images/company/annual_report_2011/ documents/Target_2011_Annual_Report.pdf.

109 . http://blogs.consumerreports.org/electronics/2010/05/walmart-target-home-entertainment-electronics-upgrades-tvs- smart-phones-bluray-best-buy-competition.html .

110 . Ibid.

111 . http://pressroom.target.com/pr/news/target-launches-new-electronics.aspx .

112 . Ibid.

113 . http://pressroom.target.com/news/target-announces-brightstar-and-marketsource-as-new-target-mobile-service-partners .

114 . http://minnesota.publicradio.org/display/web/2010/08/25/target-electronics .

115 . http://seekingalpha.com/article/562821-why-wal-mart-beats-its-competitors .

116 . http://minnesota.publicradio.org/display/web/2010/08/25/target-electronics .

117 . http://seekingalpha.com/article/562821-why-wal-mart-beats-its-competitors .

118 . http://pr.bby.com/best-buy-holds-analyst-and-investor-day-to-provide-assessment-of-the-company-and-to-outline- priorities-to-reinvigorate-performance-and-rejuvenate-its-business/ .

119 . http://www.informationweek.com/global-cio/careers/best-buy-hires-starbucks-cio-stephen-gil/232602314 .

120 . http://pr.bby.com/best-buy-names-former-starbucks-executive-stephen-gillett-evp-and-president-best-buy-digital-and- global-business-services/ .

121 . http://pr.bby.com/best-buy-names-matthew-furman-new-communications-chief/ .

122 . http://pr.bby.com/best-buy-hires-top-global-technology-talent/ .

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123 . http://pr.bby.com/best-buy-makes-personnel-announcement/ .

124 . http://pr.bby.com/retired-williams-sonoma-executive-sharon-mccollam-returns-to-retail-as-best-buys-new-chief- administrative-officer-and-chief-financial-officer/ .

125 . http://www.reuters.com/article/2012/10/24/idUS219043+24-Oct-2012+HUG20121024 .

126 . Best Buy Q1 FY09 Earnings Call, June 16, 2009.

127 . http://blogs.hbr.org/hbsfaculty/2010/04/inside-best-buys-customer-cent.html .

128 . www.scdigest.com/assets/NewsViews/04-11-18-1.cfm .

129 . www.dailytech.com/article.aspx?newsid=11133 .

130 . http://money.cnn.com/magazines/fortune/fortune_archive/2006/04/03/8373034/index.htm .

131 . Ibid.

132 . http://pr.bby.com/best-buy-holds-analyst-and-investor-day-to-provide-assessment-of-the-company-and-to-outline- priorities-to-reinvigorate-performance-and-rejuvenate-its-business/ .

133 . http://beta.fool.com/pirlo0o/2012/11/19/best-buy-loves-showrooming/16761/ .

134 . http://cecinsider.exbdblogs.com/2010/11/23/best-buy%E2%80%99s-employee-listening-system/ .

135 . Pink, D. H. (2009), Drive: The Surprising Truth about What Motivates Us (New York: Riverhead Books).

136 . http://money.cnn.com/magazines/business2/business2_archive/2007/03/01/8401022/index.htm .

137 . http://www.bestbuy-jobs.com/bestbuy/pdf/?file=best-places-to-work-hrc-2008 .

138 . www.diversityatbestbuy.com/Awards.html .

139 . Copeland, M. V. (2012), “Death by a billion clicks.”

140 . Ibid.

141 . http://m.startribune.com/business/?id=195156871&c=y .

142 . www.bby.com/about/ .

143 . http://www.forbes.com/sites/barbarathau/2012/10/18/retailers-fight-back-against-amazon-with-private-brands/ .

144 . http://www.bizjournals.com/twincities/news/2012/11/14/best-buy-might-buy-electronics-brands.html .

145 . http://www.bloomberg.com/news/2012-11-14/best-buy-ceo-joly-considers-buying-electronics-brands-for-stores.html .

146 . http://www.thestreet.com/story/11797581/1/stephen-gillett-leaves-sinking-ship-best-buy-for-symantec.html .

147 . Copeland, M. V. (2012), “Death by a billion clicks.”

148 . http://it-jobs.fins.com/Articles/SBB0000872396390443792604577573461110189118/ Best-Buy-Founder-Makes-Takeover-Bid .

149 . http://pr.bby.com/best-buy-board-and-founder-richard-schulze-reach-agreement-permitting-schulze-to-form- investment-group-and-conduct-due-diligence/ .

150 . http://pr.bby.com/best-buy-board-and-founder-richard-schulze-agree-to-amend-august-26th-cooperation-agreement/ .

151 . http://online.wsj.com/article/SB10001424127887324616604578302390201622424.html?mod=googlenews_wsj .

152 . Copeland, M. V. (2012), “Death by a billion clicks.”

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