FORMAT FOR WRITTEN CASE ANALYSIS

I. Introduction/Background
 One to two paragraphs in length
 background information, relevant facts, and the most important issues

II. Statement of the Problem

 State the problems facing the manager or key person
 Identify and link the symptoms and root causes of the problems
 Differentiate short term from long term problems
 Conclude with the decision facing the manager/key person

III. Causes of the Problem

 Provide a detailed analysis of the problems identified in the Statement of the
Problem
 In the analysis, apply theories and models from the text and/or readings
 Support conclusions and /or assumptions with specific references to the case
and/or the readings

IV. Decision Criteria and Alternative Solutions

 Identify criteria against which you evaluate alternative solutions (i.e. time for
implementation, tangible costs, acceptability to management)
 Include two or three possible alternative solutions
 Evaluate the pros and cons of each alternative against the criteria listed
V. Recommended Solution, Implementation and Justification
 Identify who, what, when, and how in your recommended plan of action
 Solution and implementation should address the problems and causes
identified in the previous section
 The recommended plan should include a contingency plan(s) to back up the
‘ideal’ course of action
 Using models and theories, identify why you chose the recommended plan of
action – why it’s the best and why it would work
VI. External Sourcing
5 external sources (in addition to your textbook) should be referenced to back
up your recommendations or to identify issues. This information would be ideally
sourced in current journals, magazines and newspapers and should reflect current
management thought or practice with respect to the issues identified.

Case Study: BEST BUY Company

Best Buy Company, Incorporated (henceforth: Best Buy) is a publicly traded retailer that operates
electronics and entertainment stores primarily within North America, though it does operate some
stores within China. Though most of the company’s operations are maintained under the Best
Buy brand, the company also operates a variety of niche brands, some of which are integrated
into Best Buy’s retail stores, others of which are freestanding retail storefronts (Best Buy Co.,
Inc.). These brands all focus on appliance, home information technology, or entertainment
technology sales and services.

When it was founded in 1966, the Best Buy Company’s original focus was sales of home and car
stereo systems at retail stores called “Sound of Music”, which expanded from a single-store
operation located in St. Paul. Minnesota in 1971. By 1982, the company had expanded its range
of product offerings to include home appliances and VCRs, and in the following three years, would
change its name to Best Buy Co., introduce an electronics “superstore” format retail operation,
and go public. The company’s new name stemmed from a promotion where a massively-
promoted annual sale – the “Tornado” Sale (named after a tornado hit one of the company’s
stores) – was billed as a “Best Buy” for consumers; eventually, the popular sale’s name was
adopted as the company’s new brand image.

This change in the company’s brand name marked a large shift in strategy for the company. For
the preceding two years, the company’s founder and chairman, Richard Schulze, had been
attempting to steer the company’s direction away from catering to buyers of audio equipment,
largely thanks to inspiration he credits to a management seminar he attended in 1981.

Schulze had realized that the buyers of such equipment tended to be young, and that the audio
equipment market was increasingly saturated with other brands. Hence, he decided to re-orient
the company’s strategy towards catering to the needs of a broader, older, and generally more
affluent customer base. This strategy was extremely successful – after 1984, the company
experienced explosive growth in the Midwest region, while simultaneously using expanded
warehouse size and a low-cost ‘superstore’ operations strategy to reduce operations costs and
thus product markup.

Through the early 1990s, the company’s aggressive retail and advertising tactics – such as
converting retail operations into hybrid warehouse-superstores (which cut overhead by reducing
employee costs), and focusing on offering a diverse array of products, such that Best Buy stores
became “one stop” shopping destinations for consumer electronics, appliances, and associated
accessories. These strategic shifts allowed the company to survive vicious price wars in the
consumer electronics market in the late 1980s, and later allowed it to emerge as the consumer
electronics hegemon in the 1990s, though many factors contributed to several years of mediocre
earnings throughout that decade (Funding Universe).

More recently, in the wake of the collapse of Best Buy’s primary retail competitor – Circuit City –
the company’s continued efforts to diversify its offerings and target specific segments of the
consumer electronics market has been credited as a key reason in why the company avoided the
demise that other electronics retailers (Circuit City, CompUSA, and others) have faced since the
beginning of the 20th century (Serres).

In addition to continuing to adapt its offerings within North American markets, the company is
continuing to pursue market development efforts within international markets, mostly in Asia,
Europe, and Latin America. (Doran, 2007). These efforts might appear as though Best Buy is
present in a strong position. However, the company has been facing declining revenue in
consumer electronics market segments such as gaming, digital imaging, televisions, and
notebook computers, which contributed to a staggering drop in profits during the company’s
second fiscal quarter of 2012. The company saw a 91% drop in profits, and the value of the
company’s stock dropped to a 9-year low (Blackden, Profits Plunge at Troubled Best Buy, 2012).