Best Buy

H A R S H S R I VA S TA
P R I YA N K A B I S WA S
RASHIKA SAXENA
S AT YA M P R A B H A K A R
5 C Analysis
 Company: Best Buy, world’s largest electronics retailer in Brick
and Mortar format
 Customers: Prospective electronic appliance and gadgets buyers
 Competition: Amazon, eBay and other online retailers
 Collaborators: Manufacturers, Shopkick, Celebrities, Web
Designers
 Context: Online stores have lower prices, hence are pulling
customers who were previously purchasing from brick and
mortar stores
Problem Statement
Best Buy has been fighting against the growing
showrooming. Can they afford to sell their products at
the same price as of online retailers, given that they have
higher operating costs like inventory maintaining costs?

Alternatives
 Operate both in online and offline modes
 Diversify the business by adding new product
categories like toys, jewelry, etc. with earlier pricing
models
Evaluation of
Alternatives
 Operate in both offline and online modes
 After recession of 2008-09, the customers have become
price sensitive
 In existing price mode, margins will be less, but volume
will make up for profits
 Brick and mortar stores give more data on consumer
behavior, latest trends
 US customers still look for “touch and feel” experience,
existing outlets will satisfy this need
Evaluation of
Alternatives
 Diversify the business by adding new product categories
 Toys and Jewelry are less popular categories for online buyers
 Best Buy sells electronics goods today. Such diversification
will destroy their value proposition
 If they keep their former pricing model (more expensive one),
it might attaract negative publicity for them, further reducing
the sales
 Fees for showrooming ($5) should be looked at as a last resort
Recommended Action
 Focus more on customer experience, rather than matching
the prices with online apps
 Build a strong sales team to better understand the needs of
the user, which will lead to greater customer satisfaction
 Start a referral program to increase sales
 Invest more in physical stores, while starting an online
platform as well
 Build same day delivery system in the same city through
online app
 Partner with other brands to be their exclusive partners