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Best Buy is a specialty retailer of consumer electronics, home-office products, entertainment software, appliances and related services. Best Buy Company is the largest retail company, originated in United States. Best Buy is the brainchild of the company's founder and chairman, Richard M. Schulze. It was established in 1966 with the name “Sound of Music” and because of some natural disasters it renamed to “Best Buy Company” in 1983. After a tornado hit one of its stores in Roseville, MN, it held a “tornado sale”, and later reopened in 1983 under a new corporate name, “Best Buy.” (Funding Universe). From 1983 the company is operating in United States as well as in Canada. In last few years they expanded their business and made it globalize through launching it in the market of China. Best Buy operates retail stores in many parts of the US and through their web sites under the brand name BestBuy.com and BestBuyCanada.ca. In addition to personal computers, computer peripheral equipment, and consumer video and audio products, Best Buy outlets, which are on average about 44,000 square feet in size, offer large and small appliances, ranging from refrigerators to coffeemakers, and entertainment software, including compact discs, video games, DVD and VHS movies, and computer software. Each of the company's business units also runs an electronic shopping web site on the Internet. Overall, The Company is always proposing new ways to increase revenue and provide the best customer service to their customers. (Funding Universe).
Executive Vice President. Dunn continued to focus on the retail industry and started working at Best Buy. President. and in May. Chief Executive Officer Shari Ballard. retail in 2002. He was named executive vice president of U. Country President.S. He was promoted to regional manager for Ohio. in December 2004. Dunn. After graduating from high school. In 1989 he became a store manager and in 1990 a district manager in Minnesota. Executive Vice President. Customer Operating Groups Source: BestBuy.ORGANIZATIONAL STRUTURE: TOP MANAGEMENT Brian J. Dunn began his retail education as a teenager when he took a full-time job at a local grocery store. Retail Channel Management Eduardo Garcia Fabregat. his career has grown simultaneously with company. Human Capital Mike Vitelli. and president of retail. He was named president and chief operating officer of the Best Buy enterprise in January 2006. Emerging Business John Pershing. In more than twenty years since than. Best Buy Mexico Rusen Kopmaz. Mr. Best Buy Turkey Jim Muehlbauer. Executive Vice President. He started with Best Buy in 1985 as a sales associate when the company operated just a dozen stores. Indianapolis and Philadelphia stores in 1996. 1998 he became regional vice president of the northeastern region. Executive Vice President . responsibility of CEO. Than eventually in June 2009 took over the . He was promoted to senior vice president of division 3 retail sales in March 2000. which handles all of Best Buy’s East Coast operations. leading Best Buy’s entry into that market.Finance and CFO Kal Patel. 2009.com CEO: Brian Dun Brian Dunn is chief executive officer of Best Buy Company. Dunn became Best Buy’s CEO on June 24. Executive Vice President. North America.
They do this by making sure that they are offering competitor pricing. The company is capable of performing strong operations during coming years.e." Best Buy constantly lowers their prices by beating out all their competitors’ prices and maintaining quality customer service. Technology. it can be . from flat panel TV’s. and making sure that every week prices are updated by what their competitors are currently selling their items for. And the pursuit of happiness. The company should not rely on one product.com) SWOT ANALYSIS: “SWOT analysis will help to examine the condition of the company from internal as well as external” Strengths: The Best Buy is the specialized retailer store in the US and Canada dealing with electronic items. They want to help customers find the entertainment technology that best meets their needs and that will integrate with their existing entertainment system to maximize their enjoyment (BestBuy. It is the biggest weakness for the company.com) BEST BUY VISION: "People. They have high brand recognition. According to the management. Best Buy uses price as a tool to increase sales.BEST BUY MISSION: "Our goal is to create a flexible. If the product is hotcake today. high-velocity supply chain operating with better product availability for customers at a lower total cost for the company. the only way to get customers to come into Best Buy is by word of mouth and the only way that is going to happen is by making sure that relationships are being built between consumers and employees. Weakness: The revenue which is continuously generating by the Best buy’s are only from one sector i. Best Buy has a strong belief that relationships between energized employees and satisfied customers will lead to profits and growth. the company is able to capture the market and supply the products on cheaper prices. The company is enjoying the leadership in the market because of its highest share. Because of its large operation." “Making life fun and easy”. (BestBuy. By this method they are increasing their revenues. It is one of the leading companies in States with total market share of 18%.
After successful operation in Europe and parts of Asia. WalMart. Plus they high a cost of maintaining mega warehouses like stores. Apple. Opportunities: The constant innovation of electronic items in the market is an opportunity for the Best Buy Company to increase their profits by offering new products. They also recently bought in to . Consumers then have an option of having the product shipped to their home or picking it up at a local Best Buy store. Office Depot. They became the only retailer able to sell Dell computers. The company has also brought some changes in their business to stay in the top line. they offer their products online as other companies are doing to help overcome online competitors. India and South America. As electronic items have a big consumer market. Best Buy became the first retailer in the US to be able to sell the Apple iPhone.outdated tomorrow. So at this point the company can lose the profits STRATEGIC PLANNING: The biggest competitors of Best Buy Company are Office Max. Threats: Electronic items are mostly luxurious items. Like. If the income of a person falls then he will definitely go for the basic items not for these secondary items. Best Buy allows consumers to purchase their items online. HH Gregg and all those retailers which are supplying those products on reasonable prices. Best Buy has recently established several new partnerships bringing new products to their stores. Then it will harm the company as well as its revenues. and Napster are some of the new partnerships. And high income is depended on good economy. Apple sent trainers to each store in order to make each employee more knowledgeable on the iPhone. so there is also a chance of gaining more profits inside the other countries. The consumer mostly buys these items when his/her income is high. it can explore new markets in other parts of the world which they have not yet invaded namely. Best Buy Company has an opportunity to expand their business globally. Dell.
34 2.31% 5.9x 13. Debt/Equity (MRQ) EPS Inventory turnover ratio 1. (BestBuy.23% .40 Management Effectiveness Return on Assets (TTM) Return on Equity (TTM) Return on Investments Market Comparison BEST BUY INDUSTRY(TECHNOLOGY) SOURCE: MSNMONEY.2% 5 year EPS growth rate 8.0% 16.34 0. Their strategy bought in many new customers as well as increased their repeated customer’s sales.Napster in order to try to increase their subscribers and expand the capabilities in the digital downloading business. They became an exclusive place for some of the products like Dell computers and Apple iPhone.19% 10.com) FINANCIAL ANALYSIS: Type (millions) Total Revenue Operating Income Net Income Total Liabilities Total Assets Total Inventory 2005 2006 2007 2008 2009 45015 1759 1003 11183 15826 4753 27433 30848 35934 40023 1442 1644 1999 2161 984 1140 1377 1407 5845 6607 7369 8274 10284 118604 13570 12758 2851 3338 4028 4708 Financial Strength Current Ratio (MRQ) Quick Ratio (MRQ) LT Debt/Equity (MRQ) Tot.COM Growth Sales (5Yr) Earnings Per Share Dividend Growth (5Yr) 12.24 0.9% -4.1x 1 year EPS growth rate -23.6% 15.0 P/E (forward 12 mnth) 11.6% 22.53% -8. These very strategic decisions by Best Buy were another successful marketing tool.2x 11.05 0.0% P/E 13.62 9. which was done to expand Best Buy stores into European countries. Best Buy also bought 50% of a company called Carphone Warehouse in Europe.
com). The inventory turn over ratio of Best buy seems to be an Industry average of 9. it is critical that we attract. so as the net income. diversity. She also will have oversight of Best Buy’s legal department.05 and quick ratio of 0. compensation and benefits and employee relations. motivate and retain experienced. however. Except of 2009 most of the previous years the company has perfrom well. The Human resources department is headed by Carol A. Low values.com) Best buy believes in diversity in workforce.9%. leadership development.50). She will lead Best Buy’s overall human resources strategy. which rose about 30% in last 5 years (except 2009). which is 22% way above the industry norm.” said Best Buy CEO Brian Dunn (UPI. Surface who reports directly to Mr. if an organization has good long-term prospects. and an inclusive policy where they try to promote within . companies that require large initial investments will generally have lower return on assets. employee education and development. But the alarming information of the company is its return on assets which is low 5. It seems Bestbuy have a forward looking long term prospects with many new markets to explore I believe debt oblugation would be taken care of. which means it will take (365 days / Inventory ratio) almost 40 days for inventory to sell. (Wikipedia) Plus the browth rate of the sales of the company is well beyond double digit of 12. its revenue were up.Since Best Buy has a Current ratio of 1. their innovation and their passion. which is a poor showing. knowledgeable and creative employees.0. But in its defense. staffing and retention. The stock price has gone up by $8 in previous year (currently trading at 36. I see there is going to be some problem. (Wikipedia) HUMAN RESOURCES FUNCTION: “Best Buy success is directly related to its people – their commitment. By looking at PE ratio of 13. She will be responsible for developing and directing Best Buy’s global human resources organization.6%.34. do not indicate a critical problem. organizational design and cultural development. Since Best buy is in constant expansion mode. Low values for the current or quick ratios (values less than 1) indicate that a company may have difficulty meeting current obligations. As we look to the future and the opportunity to serve our customers in the digitally connected world. (Bestbuy. I believe they value their employees whole lot.9 it seems a healthy average since between 10-17 is considered a fair value of the stock. By analyzing Best Buy website’s human resources department. Dunn. including global talent attraction. Best buy has a very healthy return on equity.
As the company looks forward. They will continue to invest in their employees and encourage their participation in the development of overall business. All this policies have made Best Buy standout among their competitors.000 employees. users must know about the site. The company does it well to keep it updated with new information and deals what they offer on their website. networking and personal development for their employees. They are trying to expand their efforts to make employee innovation a reality through investments in technology. processes and training. INFORMATION SYSTEMS: WEBSITE A website is effective when both the users and the owners achieve goals for the site. This model is increasingly being integrated at the store level. Best Buy delivers their advertisements in a very bright and joyful fashion. First.the company whenever posible. which they hold constantly at college campuses. which emphasis on diversity such as age. with the information they want. Typical qualifications of a Best Buy employee are to enjoy interacting with people and initiate conversation naturally and show authentic interest in others. Best Buy does not allow expensive gifts from vendors to be given to employees (SPIFFS. employee engagement will continue to be core value and priority for Best Buy. The executives at Best Buy who proposed the strategy have since started a consulting group called CultureRx. Many Best Buy employees. Going through the Best Buy website. Most of the paper advertisements have a blue background with several yellows and reds in order to grab . The EBNs provide opportunities for education. as there is a high morale among employees and an emphasis more on the bottom line. They recruit most of their employees from job fairs. including approximately 5. normally some kind of sequence is involved. Best Buy has approximately 100. etc). race. it is way easy top navigate and find what you are looking for with many options. They sponsor an Employee Business Networks (EBN). The second best place for them to recruit is through their website. Since Best Buy does a lot of adverstising its name is very attractable and popular.000 who work in the corporate office. are under a policy of Results Only Work Environment. They pride themselves itself on the fact that their sales people are not on commission. wherein employees are paid for results rather than the number of hours worked. especially at the corporate level. then they find the page they want. then they find the site on the web. gender or sexual orientation. For the users. nor does it allow employees to collect tips or gifts from customers of any type.
which they can use in their marketing strategies. Generally if they have a special for the week they will highlight it in red and put it on the bottom of the cover page. OPERATIONS: Best Buy has a certain way of targeting their customers by separating them into several different lifestyle groups. The four groups include Urban Trendsetters. they make up about 22% of their customers and about 25% of their revenue. Their second lifestyle group is Upscale Suburban.9% of their revenue. The final lifestyle groups owns more than 80% of the personal savings in the US. Best Buy’s operating model “places greater emphasis on customer-facing employees and provides more focus and clarity to the leadership roles in the store. Best Buy is most well known for their yellow tag . and around 32. and are at the height of their earning power. The first lifestyle group is the Urban Trendsetters. This breakdown of their customers profile helps Best buy understand their customer needs and their spending habits. The third lifestyle group is Middle America. Upscale Suburban. spokesperson for Best Buy. . All prices for the products are on a yellow tag whether you are looking at one of their advertisements or a price tag in their stores. This unique way of advertising helps them very much at time of promotions and sales to differ themselves from their competitions. (Best Buy) They have well documented safety procedure. They also have a well documented code of ethics for their employees on their website. controls 70% of the financial assets. this group makes up about 26% of their customers and about a quarter of their revenue. they are made up of 31. They are between the ages of 23-30 who is typically single. (Twice) Best Buy launched what it calls Greener Together to increase the energy efficiency of its products as well as reduce consumer waste through more recyclable packaging and proper disposal of certain electronic components.” according to Susan Busch. Middle America and Empty Nesters. which they follow as well do a routine drill of those guidelines inside the store.the consumer’s attention.3% of their customers. And their website is a very crucial part of all this operation. It gives step by step directions about how to resolve any problems which occur at store level among employees and their supervisor.
Dunn." “Making life fun and easy”. The area they need to work on is their service department. They are one of the pioneers in advertisements as far as creating funny ads to make their point. No matter how much the company grows. Just look at their most immediate competition Circuit City. I would recommend them to improve their current ratio and quick ratio. what brought them to this level. which end up filling for bankruptcy and closing down stores. There is a danger of loosing the golden touch of customer service. They offer very exclusive products to their customers. And the pursuit of happiness. which customers usually cannot find anywhere else. They should never forget. Geek Squad. They use all the publicity they can get through their socially good deeds. All this marketing strategies have made them very profitable companies of our time. competitive pricing and good customer service. The overall standard of the company is in good condition. They use a very competitive pricing policy to give them upper hand with their customers. Technology. they should hold down to their vision: "People. I would still like them to focus on small things. Since Best Buy is known for cheaper price. they need to highlight more of the same items which are cheaper from their competitions.CONCLUSION & RECOMMENDATIONS: In conclusion one of successful electronics store of our time is utilizing all the marketing strategies it needs to create new customers as well as maintain their regular loyal customers. with a good direction from their CEO Mr. . once a company becomes big. which will help them ease some of their debts on the books. like handling day to day operations. They have done a very good research on their customers who comes in their stores and shops on their websites. Looking at the financial analysis. by reducing spending. The time it takes for their response to a problem needs to be shortened.
upi. March 2009 http://www. March 2010 Detail Quote http://moneycentral.aspx The Marketing Mix. 29th. Commercial etc.blogspot.org/wiki/Current_ratio/ Quick Ratio UPI.com/detail/stock_quote? Symbol=BBY Wikipedia. the four P's of Marketing. 2008. Having and Being sixth edition. (2008) Best Buy Inc. from American Marketing Association Web site: http://www. http://www.com/finance/?ChannelID=3191&GUID=11944452&Page=MediaViewer Best Buy Inc.wikipedia.html MSNMONEY. Analysis http://www. March 2010 http://bestbuyinc. 2009. Marketing Power June 30.R (2004). Nov.fundinguniverse. March 2010 Definitions http://en. Upper Saddle River. from Net MBA Web site: http://www.Com February 2010.twice.com/company-histories/Best-Buy-Co-Inc-CompanyHistory.J. from Company History Best Buy Inc.com/marketing/mix Great Ads. Best Buy Revamps Store Operations.com/2008/11/best-buy-funny-commercial-2008-holiday.WORK CITED Solomon.com/article/252264-Best_Buy_Revamps_Store_Operations. Consumer Behavior: Buying.php . N. 2008.htm Twice.: Prentice-Hall. M. November 2004.com/corporate_responsibility/employee_engagement. June 28.msn.com/Pages/default.marketingpower.org.netmba. http://greatads.html Funding Universe.
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