Headquartered in Richfield, Minnesota, Best Buy Co., Inc. is multinational American company catering to the electronics retail need of the customer. Having started its services since 1996 as a specialist in audio, they have come a long way to expand their services beyond just that. Today, Best Buy is known for all kind of electronic and technological products, services, and solutions. They have their stores in three countries which is Canada, USA, and Mexico where they serve with around 1500 stores of different size and customization to the area (Fiscal 2018 Annual Report, 2018). They also cater to the needs with geek squad agents in the store. While also providing customers to make use of their website and mobile application to shop after which they can pick it up themselves or have it delivered.
After looking at their annual report and 10-K filings, these are few of the key strategies that I could point out:
Operational Excellency : Best Buy maintains inventory system in a controlled environment with a strong relationship with the vendors while also ensuring that the customer experience be it in the store, website or the mobile application is as smooth as possible with the use of omnichannel strategy (Gao & Su, 2016). The business also maintains a huge variety of products to cater to the different needs of the customer, this with the integration with online and retail assets makes the selection of product easier for the customer and the load lower in the retail store, helping store agents support effectively to the people present in the store. This omnichannel strategy and the excellence they show as a business in the way they operate add to their competitive advantage.
Renew Blue effort completion: It was initiated by the company with the vision to increase the sales and financial growth in late 2012. It came in action aiming to address the company’s falling operating margin and declining same-store sales. The plan included actions to accelerate the online growth as people during that time were more and more shifting towards the online platform, it would also contribute to reducing the cost in the business front. It also included improving customer experience in all the platform and store it serves while optimizing the space in the store in the most captivating way to draw the attention of the customers. Further to that the plans also focused on improving and strengthening the partnership with the vendors to enhance employee skills and drive value with it. The plans got the business on track with increased financial performance as it saw a 4.5% growth in 2017 as opposed to 3.4% in 2013 as non-GAAP operational income increase. They completed this effort in March 2017.
New Growth Strategy (Best Buy 2020: Building the New Blue): With the completion of renewing blue effort, the business focused on a new growth strategy with Best Buy 2020. The company has been able to dominate the market share of home theater (33%) and notebooks & desktops (30%) in the market they sell. However, the sales of major appliances (12%) and mobile phones (6%) are significantly low. The business with this growth plan aims to expand their presence in these categories where they’re lowly performing while also strengthening in the categories they’re doing well. The business believes smart home appliances would be key in the days to follow and have thus had these solutions in 450 stores and 1,500 dedicated support employees for smart home solutions around its ecosystem. They believe their service business to be a key differentiator and thus includes a team of 300 in-house advisor and several other teach support staffs (Best Buy 2020: Building the New Blue, 2018).
Best Buy appears to be using the following approach towards winning a competitive advantage:
The business already has a stronghold in the United States if it’s compared to the other two countries it serves. So, the business appears to be taking a position to accelerate growth in these two nations to increase the revenue of the company.
Another focus of the business appears to be towards maximizing the business model it holds of using a multichannel retail system to serve its customer. Looking into the financial report, it’s clear that the company positions itself to be customer-centric to enhance the customer experience while also growing their business in current and new channels. They hope to do so by adding a new product category and a stronger customer relationship.
Cater to the needs of the customer. Not come up with any random product or bluff but rather provide the service and solution that the customer actually needs/wants. These may be ones they know or ones they’re not even aware of. Best Buy intends to enhance customer value with a customer-centric approach. With this, they can not only solve the problems of the customer but also increase their satisfaction level.
Overall, Best Buy looks in a healthy position and with the key strategies and approaches as highlighted above shows they know what they’re doing to gain a competitive edge. The key differentiation appears to be on the service they provide, best use of technology for customer-centric approach, multi-channel distribution and commitment for quality.
Headquartered in Richfield, Minnesota, Best Buy Co., Inc. is multinational American company catering to the electronics retail need of the customer. Having started its services since 1996 as a specialist in audio, they have come a long way to expand their services beyond just that. Today, Best Buy is known for all kind of electronic and technological products, services, and solutions. They have their stores in three countries which is Canada, USA, and Mexico where they serve with around 1500 stores of different size and customization to the area (Fiscal 2018 Annual Report, 2018). They also cater to the needs with geek squad agents in the store. While also providing customers to make use of their website and mobile application to shop after which they can pick it up themselves or have it delivered.
After looking at their annual report and 10-K filings, these are few of the key strategies that I could point out:
Operational Excellency : Best Buy maintains inventory system in a controlled environment with a strong relationship with the vendors while also ensuring that the customer experience be it in the store, website or the mobile application is as smooth as possible with the use of omnichannel strategy (Gao & Su, 2016). The business also maintains a huge variety of products to cater to the different needs of the customer, this with the integration with online and retail assets makes the selection of product easier for the customer and the load lower in the retail store, helping store agents support effectively to the people present in the store. This omnichannel strategy and the excellence they show as a business in the way they operate add to their competitive advantage.
Renew Blue effort completion: It was initiated by the company with the vision to increase the sales and financial growth in late 2012. It came in action aiming to address the company’s falling operating margin and declining same-store sales. The plan included actions to accelerate the online growth as people during that time were more and more shifting towards the online platform, it would also contribute to reducing the cost in the business front. It also included improving customer experience in all the platform and store it serves while optimizing the space in the store in the most captivating way to draw the attention of the customers. Further to that the plans also focused on improving and strengthening the partnership with the vendors to enhance employee skills and drive value with it. The plans got the business on track with increased financial performance as it saw a 4.5% growth in 2017 as opposed to 3.4% in 2013 as non-GAAP operational income increase. They completed this effort in March 2017.
New Growth Strategy (Best Buy 2020: Building the New Blue): With the completion of renewing blue effort, the business focused on a new growth strategy with Best Buy 2020. The company has been able to dominate the market share of home theater (33%) and notebooks & desktops (30%) in the market they sell. However, the sales of major appliances (12%) and mobile phones (6%) are significantly low. The business with this growth plan aims to expand their presence in these categories where they’re lowly performing while also strengthening in the categories they’re doing well. The business believes smart home appliances would be key in the days to follow and have thus had these solutions in 450 stores and 1,500 dedicated support employees for smart home solutions around its ecosystem. They believe their service business to be a key differentiator and thus includes a team of 300 in-house advisor and several other teach support staffs (Best Buy 2020: Building the New Blue, 2018).
Best Buy appears to be using the following approach towards winning a competitive advantage:
The business already has a stronghold in the United States if it’s compared to the other two countries it serves. So, the business appears to be taking a position to accelerate growth in these two nations to increase the revenue of the company.
Another focus of the business appears to be towards maximizing the business model it holds of using a multichannel retail system to serve its customer. Looking into the financial report, it’s clear that the company positions itself to be customer-centric to enhance the customer experience while also growing their business in current and new channels. They hope to do so by adding a new product category and a stronger customer relationship.
Cater to the needs of the customer. Not come up with any random product or bluff but rather provide the service and solution that the customer actually needs/wants. These may be ones they know or ones they’re not even aware of. Best Buy intends to enhance customer value with a customer-centric approach. With this, they can not only solve the problems of the customer but also increase their satisfaction level.
Overall, Best Buy looks in a healthy position and with the key strategies and approaches as highlighted above shows they know what they’re doing to gain a competitive edge. The key differentiation appears to be on the service they provide, best use of technology for customer-centric approach, multi-channel distribution and commitment for quality.
References
Best Buy. (2018). Best Buy 2020: Building the New Blue (pp. 1-4). Retrieved from s2.q4cdn.com/785564492/files/doc_f...
Best Buy. (2018). Fiscal 2018 Annual Report . Retrieved from s2.q4cdn.com/785564492/files/doc_f...
Gao, F., & Su, X. (2016). Online and Offline Information for Omnichannel Retailing. SSRN Electronic Journal , 26.