Best Buy, the largest consumer electronics retailer in the United States that operates in Canada and Mexico as well offers wide range of products like computing and mobile phones, smart home technology, entertainment products, sporting goods, gaming hardware and software and home appliances to its customers. In addition to these products, it also provides services relating to consultation, designing, delivery, installation, set-up, protection plan, and repairing along with required technical support. Best Buy uses physical stores, mobile applications, call centers and websites like Best Buy, Best Buy Direct, Best Buy Express, Geek Squad, Magnolia Home Theatre, Pacific Kitchen and Home, bestbuy.ca and bestbuy.com.mx to ensure easy access of customers towards its products and services (Bloomberg).
Some of the rival companies of Best Buy as given in the discussion question itself are Costco Wholesale (American multinational corporation that operates a chain of membership only warehouse), Walmart (American multinational retail corporation that operates a chain of hypermarkets, discount department stores and grocery stores), Sam’s Club (American chain of membership only retail warehouse clubs owned and operated by Walmart Inc.) and Target (second largest department store retailer in the United States). In order to offset these competitors and sustain in the market, it is necessary for Best Buy to gain competitive advantage over them by developing durable preferences for its products and services among a large number of buyers. For this, formulating and implementing the right strategy is of great essence.
In order to compete with Amazon and other e-commerce sites and prevent the customers from buying the products online from somewhere else after testing them on Best Buy stores, it came up with price matching guarantee. As per this, Best Buy compares the price of the products selected by the customers with key online and local competitors and if others are offering it at lower price than that of Best Buy, it will offer them at the lowest price available in the market excluding special offers and discounts offered by those stores after properly validating the price (Best Buy ).
This proves that Best Buy competes aggressively on price, but the customers know it for its first-rate customer service. Through the growth strategy named "Best Buy 2020: The New Blue Moon”, the company aims to expand what it sells, evolve how it sells and solve the customers’ issues in most effective and efficient way possible. Unlike other e-commerce sites, it focuses on maintaining retailer-customer relationship and help the customers achieve great new things through technology (Badlotto). Best Buy is trying to differentiate its products from existing competitors in following ways:
1.Its partnership with brands like Apple and Microsoft to build in-store boutiques where the products are displayed in ready to use state and the customers can check the products at the real time (Cheng, 2018).
2.It trains the staffs to make them product experts so that they can provide customers with the required information about the product they want to know about and encourage them to build relationships with the customers (Shapiro, 2016).
3.It has a 24/7 support tab where the customers can get answers to their queries or ask for information about any product or service easily.
4.It conducts research to know about its customers so that it can customize the products and services based on the customers’ requirement (Gulati, 2010).
5.Its army of specially trained tech experts, known as Best Buy’s Geek Squad provide installation as well as other tech related support to the customers at their home.
If we look carefully at the strategies being adopted by Best Buy, we can figure out that it is offering its products at relatively lower costs and offering substantial differentiation as well. So, in my opinion, the strategy of Best Buy can be classified as best-cost strategy. As the definition of best-cost provider strategy explains, it is about giving more value to the customers for money by emphasizing both on low cost and upscale difference (Misner, n.d.). Best Buy falls in this criteria as it is focusing on continuously improving the customer experience and offering the products at lower cost by incorporating technology. Thus, the strategy of Best Buy can be categorized as best-cost strategy.
References
Badlotto, J. (n.d.). Best Buy’s Putting their Best Strategy Forward. Retrieved from Market Track: The Power of Market Intelligence: markettrack.com/blog/best-buy-best...
Gulati, R. (2010, April 12). Inside Best Buy’s Customer-Centric Strategy. Harvard Business Review . Retrieved from hbr.org/2010/04/inside-best-buys-c...
Shapiro, R. (2016, July 22). Best Buy’s Competitive Strategy to Beat Amazon: Educate Consumers. Retrieved from Business 2 Community: business2community.com/trends-news...
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Best Buy, the largest consumer electronics retailer in the United States that operates in Canada and Mexico as well offers wide range of products like computing and mobile phones, smart home technology, entertainment products, sporting goods, gaming hardware and software and home appliances to its customers. In addition to these products, it also provides services relating to consultation, designing, delivery, installation, set-up, protection plan, and repairing along with required technical support. Best Buy uses physical stores, mobile applications, call centers and websites like Best Buy, Best Buy Direct, Best Buy Express, Geek Squad, Magnolia Home Theatre, Pacific Kitchen and Home, bestbuy.ca and bestbuy.com.mx to ensure easy access of customers towards its products and services (Bloomberg).
Some of the rival companies of Best Buy as given in the discussion question itself are Costco Wholesale (American multinational corporation that operates a chain of membership only warehouse), Walmart (American multinational retail corporation that operates a chain of hypermarkets, discount department stores and grocery stores), Sam’s Club (American chain of membership only retail warehouse clubs owned and operated by Walmart Inc.) and Target (second largest department store retailer in the United States). In order to offset these competitors and sustain in the market, it is necessary for Best Buy to gain competitive advantage over them by developing durable preferences for its products and services among a large number of buyers. For this, formulating and implementing the right strategy is of great essence.
In order to compete with Amazon and other e-commerce sites and prevent the customers from buying the products online from somewhere else after testing them on Best Buy stores, it came up with price matching guarantee. As per this, Best Buy compares the price of the products selected by the customers with key online and local competitors and if others are offering it at lower price than that of Best Buy, it will offer them at the lowest price available in the market excluding special offers and discounts offered by those stores after properly validating the price (Best Buy ).
This proves that Best Buy competes aggressively on price, but the customers know it for its first-rate customer service. Through the growth strategy named "Best Buy 2020: The New Blue Moon”, the company aims to expand what it sells, evolve how it sells and solve the customers’ issues in most effective and efficient way possible. Unlike other e-commerce sites, it focuses on maintaining retailer-customer relationship and help the customers achieve great new things through technology (Badlotto). Best Buy is trying to differentiate its products from existing competitors in following ways:
1.Its partnership with brands like Apple and Microsoft to build in-store boutiques where the products are displayed in ready to use state and the customers can check the products at the real time (Cheng, 2018).
2.It trains the staffs to make them product experts so that they can provide customers with the required information about the product they want to know about and encourage them to build relationships with the customers (Shapiro, 2016).
3.It has a 24/7 support tab where the customers can get answers to their queries or ask for information about any product or service easily.
4.It conducts research to know about its customers so that it can customize the products and services based on the customers’ requirement (Gulati, 2010).
5.Its army of specially trained tech experts, known as Best Buy’s Geek Squad provide installation as well as other tech related support to the customers at their home.
If we look carefully at the strategies being adopted by Best Buy, we can figure out that it is offering its products at relatively lower costs and offering substantial differentiation as well. So, in my opinion, the strategy of Best Buy can be classified as best-cost strategy. As the definition of best-cost provider strategy explains, it is about giving more value to the customers for money by emphasizing both on low cost and upscale difference (Misner, n.d.). Best Buy falls in this criteria as it is focusing on continuously improving the customer experience and offering the products at lower cost by incorporating technology. Thus, the strategy of Best Buy can be categorized as best-cost strategy.
References
Badlotto, J. (n.d.). Best Buy’s Putting their Best Strategy Forward. Retrieved from Market Track: The Power of Market Intelligence: markettrack.com/blog/best-buy-best...
Best Buy . (n.d.). Best Buy Price Match Guarantee: We won’t be Beat on Price. Retrieved from bestbuy.com/site/help-topics/best-...
Bloomberg. (n.d.). Company Overview of Best Buy Co., Inc. Retrieved from Specialty Report: bloomberg.com/research/stocks/priv...
Cheng, A. (2018, August 28). Why Best Buy Remains Relevant In The Age of Amazon. Retrieved from Forbes: forbes.com/sites/andriacheng/2018/...
Gulati, R. (2010, April 12). Inside Best Buy’s Customer-Centric Strategy. Harvard Business Review . Retrieved from hbr.org/2010/04/inside-best-buys-c...
Misner, I. (n.d.). The Five Key Competitive Strategies . Retrieved from ivanmisner.com/the-five-key-compet...
Shapiro, R. (2016, July 22). Best Buy’s Competitive Strategy to Beat Amazon: Educate Consumers. Retrieved from Business 2 Community: business2community.com/trends-news...