Strategies and Core Competencies-Best Buy case study

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Strategies and Core Competencies-Best Buy case study (2001-2010)- this report aims at analysing the strategic management case of Best Buy. The report consists of several sections. The first part conducts a brief review of Best Buy’s strategy, including acquisition and employee-listening program.

Strategies and Core Competencies

The next section identifies five issues faced by Best Buy, which are declined profits due to low customer demands, less competitive business model than its rivals, weaker capabilities and resources, unfavourable macro environment and threats from substitutes. With the declaration of company’s core value, the theoretical frameworks of Porter’s five forces, PESTEL and SWOT analysis are utilized to analyse Best Buy’s development path in the future. Moreover, the biggest threat for Best Buy now is the rivalry among current competitors like Amazon, Walmart, Target etc. The SWOT analysis implicates that Best Buy is supposed to construct a matrix to foster quicker decision-making process and future planning. This is also the most popular strategy tool to support making decision from many enterprises. In addition, PESTEL has offered the general situation of the current external environments. Based on the above evaluation, both long-term and short-term solutions, such as decrease in expansion, a lower price tag and provision of home installation service as well as introduction to a new online shop and provision of high-end products, are recommended to help Best Buy overcome the challenge and further develop their business.  

Strategy profile of the case – Strategies and Core Competencies in the BB’s case

From 2000 to 2008, Best Buy used acquisition strategy within US and international market to expand the company. Magnolia, Musicland, Geek Squad, Napster in the United States Best Buy first acquired and then Future Shop in Canadian and Jiangsu Five Star Appliance Co., Ltd. In 2008, Best Buy opened stores in Mexico, Turkey, the United Kingdom, and other European countries. As a result, Best Buy has increased the revenue through the acquisition strategy. In addition, Best Buy is focusing its strategy in three areas: customer-centricity, employment policies, and exclusive branding. Best Buy realized that they should find a different way to compete rather than competing on price. Therefore, the company achieves customer-centricity through systematic customer segmentation. They provide the unique in-store customer experience. The customer should go to the store to see the quality of the product, they cannot use sense online to see what difference is. Also, the company thinks that the same principles applied equally well to employees. Thus, the company creates an employee-listening program that used open communication to understand the employee’s needs, such as annual company-wide surveys, virtual discussion board, and one-on-one a dialogue meeting. The company collects information in this way to identify important issues for employees. Best Buy value everyone’s talents, life experiences, beliefs and backgrounds. For example, the company will provide reasonable accommodations for employees and applicants with disabilities, and for their religious beliefs and practices. To achieve differentiation with competitors, the company created its own brands. Best Buy has five exclusive brands that are Insignia, Dynex, Init, Rocketfish, and Geek Squad, and with the manufacture to produce the products and increase margin. Also, exclusive brands developed product diversity.

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