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Discussion Board- Unit 1- Standards and Poors Net Advantage Jacquelyn Layman Liberty University BUSI 530 B20 Managerial Finance Charles Smith January 16, 2014

COMPANY ANALYSIS Analysis of a Company Lam Research Abstract This discussion is an analysis of the U.S. based etch products manufacturing company, Lam Research. This discussion will briefly introduce Lam Research and its niche in the market, as

well as describe the industry conditions, and the financial position of the Lam Research (relative to the industry and the company as a whole). We will consider the economic outlook of Lam Research and define why a potential investor would or would not invest in this company. Finally, there will be a brief overview of some of the key financial indicators that helped to determine the decision to invest or not to invest. Lam Research Lam Research is a highly innovative manufacturer of etch products. This technology is required to make every type of semiconductor device, and as such makes this company, as the industry leader a and an innovative leader, a highly attractive bid. . both products and services worldwide via the retail, online and call center channels. Recognized associated brands of Lam Research include but are not limited to Lam Research, Best Buy Mobile, The Geek Squad, Pacific Sales, The Carphone Warehouse, and the Future Shop. The chain is a retail outlet of most products electronic, including audio, video, wireless and cellular and appliances. The other of the offerings of Lam Research are services, such as installation, repair, maintenance, support, and subscriptions for services including mobile, and internet services. The Reason For Change Lam Research is a publicly traded company and is professionally audited by the auditing firm of Deloite and Touche, LLP. Best Buy has traditionally offered incentives for customer retention in the form of customer loyalty points. The loyalty program at Best Buy allows you to

COMPANY ANALYSIS

apply a portion of each product sold toward a loyalty reward that can be claimed at a later date. This program is appropriately named the Reward Zone. Despite the multiple well-known brands and a popular reward program, Lam Research has suffered from a decline in customer loyalty due to a shift in customer trends showing a marked difference in the way consumers buy electronics, with that shift being in favor of e-commerce. Lam Research in hopes of winning back those customers has implemented some strategic changes to win back the lost loyalty. The strategic changes that have been implemented in the plan named Renew Blueare both simple and complex in nature, with an idea as simple as becoming more service oriented to something as complex as revamping and redesigning the layout of the retail stores. The reasons for wanting to implement a new strategy are clear, the pressure of web-based shopping caused by the loss of in store clientele, an misconception that the in store prices are higher than the web store prices, and internal issues such as potential takeover bids, and sex scandals. Because these threats have caused the stock to lose almost half of its value in the last year, the newly formed executive team has constructed a series of goals. A New Strategy Under the guide of new CEO, Hubert Joly, a handpicked executive team recently assembled by Mr. Joly himself has come up with a new strategy for winning back the lost customer and retaining the new. In an effort to regain the customers lost to a major increase in web shopping along with the lost in store traffic, Lam Researchis attempting to fix some basic retailing problems also discovered by the executive team (Brown, 2012). The main concepts of the new strategy are an enhanced in-store experience, redesigned store layouts and a storewithin-a store concept. Enhanced in store experience

COMPANY ANALYSIS One of the strategic marketing goals is to increase revenue by tying Web and mobile

shopping with the experience of in-store shopping (Brown, 2012). With an app designed by Red Laser that allows for what is known as Showrooming Lam Research hopes to enhance the instore experience by interlacing it with the online experience by offering the same coupons and one-click ordering to customers in store that they offer to the customers of Bestbuy.com (2012). Redesigned store layouts Redesigning the store layouts is another of the strategic moves that has been aggressively pursued by CEO Hubert Joly (Lee, 2013). More specifically, the store-within-a store strategy that places other well-known brands such as Samsung, and Microsoft inside Best Buy with dedicated checkouts, and large displays, each major retailer responsible for their own pricing and merchandising decisions. Best buy benefits by having the high end and hot ticket items in the store to drive traffic and boost sales per square foot, an industry measure of success. Will It Work? In assessing and offering an opinion of how successful this campaign will be research was made into other retailers that have tried similar concepts, and their successes. JC Penney has been practicing the strategy for nearly a year with the launch of mini-boutiques featuring brands like Levis, and Liz Claiborne. Since its inception, the mini-boutiques have outsold the rest of the store by 20% (Tuttle, 2013) It does seem as though the trend has turned to associating your brand with another for success. If this is an indicator of the success to be realized by Lam Research, it should be a huge success. While the idea of the store-within-a store is one that seems to have potential, I feel that it may be laying all of your eggs in one basket. It is risky to set all of your hopes into one or two drastic strategies and can prove to be disastrous. If given the opportunity to suggest alternatives,

COMPANY ANALYSIS the suggestions would include the implementation of several smaller campaigns such as the

ability to earn larger incentive bonuses for purchases from both the Best Buy store and the brand retailer located within the store, and the ability to use those bonuses at either of the retailers checkouts. The future of retailing is changing, many stores are opting for the mini-mall concept of stores within stores. The only question I have for the future is what is going to happen to the department store? If all of the department stores try this scenario, my concern is that this will affect pricing to the extent that there will no longer be a truly low cost department store. Summary With hopes of regaining lost customer traffic, electronics superstore Best Buy Inc. has implemented a new strategic marketing solution that includes revamping the store layout and bringing in outside brands such as Microsoft and Samsung to solicit their wares in a store within-a store scenario that was implemented with some success so far by department store giant JC Penney in early 2012. The hope is to increase foot traffic in the store, and provide a more robust shopping experience for the consumer. In addition, Best Buy has partnered with Red Laser to introduce an app that allows in-store customers to take advantage of web-only specials. The combination of web, mobile and in store shopping will hopefully bring a more satisfying experience to the loyal customer of Best Buy Inc., and bring back some of the lost in-store traffic. While all initial signs point to success for JC Penney, this appears to be a trend that if followed by other major department store retailers, could theoretically eliminate the low cost department store and drive prices higher in an already unstable market.

COMPANY ANALYSIS

References Brown, A. (2012, November 13). Best Buy Offers New Details On Bid To Regain Relevance And Customers - Forbes. Retrieved from http://www.forbes.com/sites/abrambrown/2012/11/13/inside-best-buys-bid-to-regainrelevance-and-customers-live-analyst-day/ Lee, T. (2013, July 20). Best Buy Bets Big With Stores-Within-Stores. Pittsburgh PostGazette [Pittsburgh]. Retrieved from http://www.lexisnexis.com.proxy.msbcollege.edu/hottopics/lnacademic/ Tuttle, B. (2013, April 8). Can the Boutique Store-Within-a-Store Concept Save Big Box Retailers from Extinction? business.time.com. Retrieved from http://business.time.com/2013/04/08/can-the-boutique-store-within-a-store-concept-savebig-box-retailers-from-extinction/