Best Buy is an American multinational consumer electronics retailers that operates in Canada and Mexico besides America. The wide range of products offered by this company includes consumer electronics, computing and mobile phones, entertainment products, sporting goods, gaming hardware and software and home appliances along with services of consultation, design, delivery, installation, set-up, protection plan, repair and technical support. These products and services are offered through stores, mobile applications, call centers and websites under Best Buy, Best Buy Direct, Best Buy Express, Geek Squad, Magnolia Home Theater, Pacific Kitchen and Home, bestnuy.ca and bestbuy.com.mx (Bloomberg).
Strategy refers to the ideas and plans prepared to attain the stated objectives overcoming the physical, mental and financial constraints by using minimum possible resources. It is all about finding the reasons and ways to compete and sustain in the market. But strategy cannot be static. The strategies evolve over time because of unexpected moves from competitors, shifts in the needs and preferences of buyers, emerging market opportunities, generation of new ideas for performance improvement and increasing evidences reflecting the failure of current strategy (Gamble, Peteraf, & Thompson, 2015). The key elements of Best Buy’s strategies based on the latest annual report and framework provided in textbook are:
Executing Priorities (Deliberate Strategies)
The deliberate strategies refer to the addition of new initiatives in the ongoing strategies continued from prior period. In case of Best Buy, it set three priorities in the beginning of the year that includes build on strong industry position and multi-channel capabilities to drive existing business, drive cost reduction and efficiency and advance key initiatives to drive future growth. The omni-channel strategy, carefully managed inventory system, strong vendor relationships, high quality customer experience, integrated online and retail assets and broad product assortment helped in achieving these priorities that are reflected through increase in market share, net promoter score, domestic online revenue and cost reduction (Best Buy, 2018).
Completion of Renew Blue Efforts (Emergent Strategies)
Emergent strategies are the unplanned reactive responses to changing circumstances . In order to address the reduction in sales and compete with Amazon, eBay and Wal-Mart, the company launched a transformation program named Renew Blue in 2012. This program was launched with the aim of accelerating online growth, improving customer experience, optimizing store space, building better partnership with vendors to drive value and focusing on employee skills (Trefis Team , 2015). The program that was launched to address the changing business environment helped the company to stabilize the sales and increase non-GAAP operating income. The increase in operating income by 110 basis points, Earning per Share by 9% per year and Return on Invested Capital by 810 basis points from year 2013 to 2017 reflects the success of this strategy.
Best Buy 2020: Building the New Blue (Realized Strategies)
Realized strategy is a blend of deliberate and emergent strategies. Depending upon the priorities and success of the Renew Blue, the company unveiled the strategy for next phase named Best Buy 2020: Building the New Moon that aims to create a company that will enhance the customer value proposition and shareholders’ return. This strategy mainly focuses on maximizing the multi-channel retail business, providing services and solutions that solve real customer needs and accelerating growth in Canada and Mexico (Best Buy, 2018).
Gaining competitive advantage is all about developing durable preferences for the products/services offered by the company among a large number of buyers to offset the customers. Relating to best buy, from the annual report we can see that the company is prioritizing on exploring and pursuing growth opportunities by continuing to innovate digital capabilities, creating growth in international market and expanding in-home advisor program. In addition, it is continuously working on reducing costs and increasing efficiency, improving execution in key areas to improve sales, strengthen supply chain and enhance service fulfillment capabilities. The company is also planning to build the capabilities to execute the plans effectively. Thus, the company is using cost leadership and adapting itself with the technological development to gain competitive advantage and cater the needs of customers in innovative and effective manner.
Gamble, J. E., Peteraf, M. A., & Thompson, A. A. (2015). Essentials of Strategic Management: The Quest for Competitive Advantage (Fourth ed.). New York: McGraw Hill Education.
Trefis Team . (2015). How Best Buy’s “Renew Blue” Transformation Program can Impact its Valuation . Retrieved from Forbes: forbes.com/sites/greatspeculations...
For further actions, you may consider blocking this person and/or reporting abuse
We're a place where students share, stay up-to-date, learn and grow.
Best Buy is an American multinational consumer electronics retailers that operates in Canada and Mexico besides America. The wide range of products offered by this company includes consumer electronics, computing and mobile phones, entertainment products, sporting goods, gaming hardware and software and home appliances along with services of consultation, design, delivery, installation, set-up, protection plan, repair and technical support. These products and services are offered through stores, mobile applications, call centers and websites under Best Buy, Best Buy Direct, Best Buy Express, Geek Squad, Magnolia Home Theater, Pacific Kitchen and Home, bestnuy.ca and bestbuy.com.mx (Bloomberg).
Strategy refers to the ideas and plans prepared to attain the stated objectives overcoming the physical, mental and financial constraints by using minimum possible resources. It is all about finding the reasons and ways to compete and sustain in the market. But strategy cannot be static. The strategies evolve over time because of unexpected moves from competitors, shifts in the needs and preferences of buyers, emerging market opportunities, generation of new ideas for performance improvement and increasing evidences reflecting the failure of current strategy (Gamble, Peteraf, & Thompson, 2015). The key elements of Best Buy’s strategies based on the latest annual report and framework provided in textbook are:
Executing Priorities (Deliberate Strategies)
The deliberate strategies refer to the addition of new initiatives in the ongoing strategies continued from prior period. In case of Best Buy, it set three priorities in the beginning of the year that includes build on strong industry position and multi-channel capabilities to drive existing business, drive cost reduction and efficiency and advance key initiatives to drive future growth. The omni-channel strategy, carefully managed inventory system, strong vendor relationships, high quality customer experience, integrated online and retail assets and broad product assortment helped in achieving these priorities that are reflected through increase in market share, net promoter score, domestic online revenue and cost reduction (Best Buy, 2018).
Completion of Renew Blue Efforts (Emergent Strategies)
Emergent strategies are the unplanned reactive responses to changing circumstances . In order to address the reduction in sales and compete with Amazon, eBay and Wal-Mart, the company launched a transformation program named Renew Blue in 2012. This program was launched with the aim of accelerating online growth, improving customer experience, optimizing store space, building better partnership with vendors to drive value and focusing on employee skills (Trefis Team , 2015). The program that was launched to address the changing business environment helped the company to stabilize the sales and increase non-GAAP operating income. The increase in operating income by 110 basis points, Earning per Share by 9% per year and Return on Invested Capital by 810 basis points from year 2013 to 2017 reflects the success of this strategy.
Best Buy 2020: Building the New Blue (Realized Strategies)
Realized strategy is a blend of deliberate and emergent strategies. Depending upon the priorities and success of the Renew Blue, the company unveiled the strategy for next phase named Best Buy 2020: Building the New Moon that aims to create a company that will enhance the customer value proposition and shareholders’ return. This strategy mainly focuses on maximizing the multi-channel retail business, providing services and solutions that solve real customer needs and accelerating growth in Canada and Mexico (Best Buy, 2018).
Gaining competitive advantage is all about developing durable preferences for the products/services offered by the company among a large number of buyers to offset the customers. Relating to best buy, from the annual report we can see that the company is prioritizing on exploring and pursuing growth opportunities by continuing to innovate digital capabilities, creating growth in international market and expanding in-home advisor program. In addition, it is continuously working on reducing costs and increasing efficiency, improving execution in key areas to improve sales, strengthen supply chain and enhance service fulfillment capabilities. The company is also planning to build the capabilities to execute the plans effectively. Thus, the company is using cost leadership and adapting itself with the technological development to gain competitive advantage and cater the needs of customers in innovative and effective manner.
References
Best Buy. (2018). Annual Report 2017 . Retrieved from s2.q4cdn.com/785564492/files/doc_f... 1
Bloomberg. (n.d.). Company Overview of Best Buy Co., Inc. Retrieved from Specialty Report: bloomberg.com/research/stocks/priv...
Gamble, J. E., Peteraf, M. A., & Thompson, A. A. (2015). Essentials of Strategic Management: The Quest for Competitive Advantage (Fourth ed.). New York: McGraw Hill Education.
Trefis Team . (2015). How Best Buy’s “Renew Blue” Transformation Program can Impact its Valuation . Retrieved from Forbes: forbes.com/sites/greatspeculations...