Best Buy is a company that sales consumer electronics, computing and mobile phones, entertainments, appliances and services such as consulting, delivery, design etc. It operates with 1200 large format stores and 300 small format stores in US, Canada and Mexico. Their strength lies in their efficient management of inventory and supply chain. "We believe our dedicated and knowledgeable people, integrated online and retail assets, broad products assortment, strong vendor services and support offerings, distinct store formats, brand marketing strategies and supply chain are important ways in which we maintain this advantage. (Inc., 2018)”
Strategies used by Bestbuy
Stores and outlets
Best Buy is not adamant in permanent outlets. Instead they evaluate every store at the end of their lease period and based on the performance decide on continuing or closing down the store. In 2018, they closed down 257 remaining Best Buy Mobile stand-alone stores in the US. Their domestic outlet have been reduced from around 1400 in 2016 to 1200 in 2018. These outlets are evaluated on their positive or negative operating income of the past 12 months. These strategically placed outlets are one of their major strategic advantage as they are able to ship from any large stores.
Inventory and vendors
Best Buy have a very efficient method to maintain optimal level of inventory. They do not store a lot of products but instead go in short term contract with return clauses for some products with vendors. They monitor and analyse the demand of their customers and prepare inventory based on it. So at one time they do not have assets frozen in stores but rather coming and moving as a constant flow. The vendor agreement are also set up in the same way.
Competition
With online search possibility, customers are now aware more than ever on the real time price of products. This has been one of the challenges to Best Buy. They need to be competitive in pricing, as compared to their competitors and new entrants.
They have attempted to retaliate with their competitors who may have better operational cost, greater capital power, better recognized brand, offer lower price consistently, have better deals with vendors by maintaining product quality, timely delivery and low cost delivery. They can send products from any large format stores in US and Canada. "We believe our dedicated and knowledgeable people, integrated online and retail assets, broad product assortment, strong vendor relationships, range of focused service and support offerings, distinct store formats, brand marketing strategies and supply chain are important ways in which we maintain this advantage. (Inc., 2018)”
"We believe our ability to deliver a high-quality customer experience offers us a key competitive advantage. Some of our competitors have lower cost operating structures and seek to compete for sales primarily on price. In addition, in the U.S., online-only operators are not generally required to collect sales taxes in certain states. We believe this advantage will continue to be eroded as sales tax rules are re-evaluated at both the state and federal levels. (Buy, 2018)”
CSR
"In fiscal 2018, we set a new goal to reduce our own carbon emission by 60 percent by 2020 (over a 2009 baseline), from both operational reductions and renewable sourcing, and we currently expect to meet or exceed this goal. (Inc., 2018)” A good corporate social responsibility has been shown by the company.
Customer service
Customers have the power to make or break a company and thus are at the center of any business. Best Buy sees this importance but is also challenge for them. "Because our business strategy is based on offering superior levels of customer service and a full range of services to complement the products we offer, our cost structure is higher than some of our competitors, and this, in conjunction with price transparency, puts pressure on our margins. (Inc., 2018)” Never the less these are part of their strategy to keep their customers satisfied.
With such steep competition and strategy such as pricing and store location, outlet numbers etc. their revenue has increased by 7% in 2018 as compared to previous year.
These are some of the planned new initiatives, ongoing strategies continued from prior periods, and unplanned circumstance that have supported the company to realize its business strategies.
References
Buy, B. (2018). Fiscal 2018 Annual Report. Minnesota: Best Buy.
Inc., B. B. (2018). FORM 10-K. Washington D.C: Best Buy Co. Inc.
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Best Buy is a company that sales consumer electronics, computing and mobile phones, entertainments, appliances and services such as consulting, delivery, design etc. It operates with 1200 large format stores and 300 small format stores in US, Canada and Mexico. Their strength lies in their efficient management of inventory and supply chain. "We believe our dedicated and knowledgeable people, integrated online and retail assets, broad products assortment, strong vendor services and support offerings, distinct store formats, brand marketing strategies and supply chain are important ways in which we maintain this advantage. (Inc., 2018)”
Strategies used by Bestbuy
Stores and outlets
Best Buy is not adamant in permanent outlets. Instead they evaluate every store at the end of their lease period and based on the performance decide on continuing or closing down the store. In 2018, they closed down 257 remaining Best Buy Mobile stand-alone stores in the US. Their domestic outlet have been reduced from around 1400 in 2016 to 1200 in 2018. These outlets are evaluated on their positive or negative operating income of the past 12 months. These strategically placed outlets are one of their major strategic advantage as they are able to ship from any large stores.
Inventory and vendors
Best Buy have a very efficient method to maintain optimal level of inventory. They do not store a lot of products but instead go in short term contract with return clauses for some products with vendors. They monitor and analyse the demand of their customers and prepare inventory based on it. So at one time they do not have assets frozen in stores but rather coming and moving as a constant flow. The vendor agreement are also set up in the same way.
Competition
With online search possibility, customers are now aware more than ever on the real time price of products. This has been one of the challenges to Best Buy. They need to be competitive in pricing, as compared to their competitors and new entrants.
They have attempted to retaliate with their competitors who may have better operational cost, greater capital power, better recognized brand, offer lower price consistently, have better deals with vendors by maintaining product quality, timely delivery and low cost delivery. They can send products from any large format stores in US and Canada. "We believe our dedicated and knowledgeable people, integrated online and retail assets, broad product assortment, strong vendor relationships, range of focused service and support offerings, distinct store formats, brand marketing strategies and supply chain are important ways in which we maintain this advantage. (Inc., 2018)”
"We believe our ability to deliver a high-quality customer experience offers us a key competitive advantage. Some of our competitors have lower cost operating structures and seek to compete for sales primarily on price. In addition, in the U.S., online-only operators are not generally required to collect sales taxes in certain states. We believe this advantage will continue to be eroded as sales tax rules are re-evaluated at both the state and federal levels. (Buy, 2018)”
CSR
"In fiscal 2018, we set a new goal to reduce our own carbon emission by 60 percent by 2020 (over a 2009 baseline), from both operational reductions and renewable sourcing, and we currently expect to meet or exceed this goal. (Inc., 2018)” A good corporate social responsibility has been shown by the company.
Customer service
Customers have the power to make or break a company and thus are at the center of any business. Best Buy sees this importance but is also challenge for them. "Because our business strategy is based on offering superior levels of customer service and a full range of services to complement the products we offer, our cost structure is higher than some of our competitors, and this, in conjunction with price transparency, puts pressure on our margins. (Inc., 2018)” Never the less these are part of their strategy to keep their customers satisfied.
With such steep competition and strategy such as pricing and store location, outlet numbers etc. their revenue has increased by 7% in 2018 as compared to previous year.
These are some of the planned new initiatives, ongoing strategies continued from prior periods, and unplanned circumstance that have supported the company to realize its business strategies.
References
Buy, B. (2018). Fiscal 2018 Annual Report. Minnesota: Best Buy.
Inc., B. B. (2018). FORM 10-K. Washington D.C: Best Buy Co. Inc.