Best Buy Case Analysis
Case Analysis
Current Situation
“Our formula is simple: we’re a growth company focused on better solving the unmet needs of our customers—and we rely on our employees to solve those puzzles. Thanks for stopping."
Richard Schulze started Best Buy and grew it to a million dollar company within four years. The future CEO of Best Buy learned that diversification in the stores’ offerings and serving various target segments led to increased market share. After going public in 1985, Best Buy changed from commissioned and specialized customer assistants to a non-exempt, hourly paid sale associates to ensure that customers’ needs are the employees’ top priority. In 1999, Best Buy successfully launched its online store. Through acquisitions of Napster, electronic sellers, and home appliances suppliers, Best Buy was able to grow and gain the resources necessary for its international expansion. By using backwards vertical integration, Best Buy was able to broaden their scope and have bigger economies of scale, achieving savings that were passed along to our customers. Related diversification has also allowed Best Buy to maintain revenues, even through the recent economic recession. Best Buy’s primary industries are Radio, Television, and Other Electronics Stores (NAICS 443112), Electrical and Electronic Appliance, Television, and Radio Set Merchant Wholesalers (NAICS 423620), Computer and Computer Peripheral Equipment and Software Merchant Wholesalers (NAICS 423430) and Household Appliance Stores (NAICS 443111). Price per share as of February 19, 2013 is $17.33. In September 2011, Best Buy was named to the 2011 Dow Jones Sustainability index for corporate citizenship and philanthropy, social reporting, stakeholder engagement and operational eco-efficiency. Currently, Best Buy’s greatest struggle is facing new industry competitors. The company is losing market share to online retailers, such as Amazon, and to its primary suppliers, including Apple, HP, and
Current Situation
“Our formula is simple: we’re a growth company focused on better solving the unmet needs of our customers—and we rely on our employees to solve those puzzles. Thanks for stopping."
Richard Schulze started Best Buy and grew it to a million dollar company within four years. The future CEO of Best Buy learned that diversification in the stores’ offerings and serving various target segments led to increased market share. After going public in 1985, Best Buy changed from commissioned and specialized customer assistants to a non-exempt, hourly paid sale associates to ensure that customers’ needs are the employees’ top priority. In 1999, Best Buy successfully launched its online store. Through acquisitions of Napster, electronic sellers, and home appliances suppliers, Best Buy was able to grow and gain the resources necessary for its international expansion. By using backwards vertical integration, Best Buy was able to broaden their scope and have bigger economies of scale, achieving savings that were passed along to our customers. Related diversification has also allowed Best Buy to maintain revenues, even through the recent economic recession. Best Buy’s primary industries are Radio, Television, and Other Electronics Stores (NAICS 443112), Electrical and Electronic Appliance, Television, and Radio Set Merchant Wholesalers (NAICS 423620), Computer and Computer Peripheral Equipment and Software Merchant Wholesalers (NAICS 423430) and Household Appliance Stores (NAICS 443111). Price per share as of February 19, 2013 is $17.33. In September 2011, Best Buy was named to the 2011 Dow Jones Sustainability index for corporate citizenship and philanthropy, social reporting, stakeholder engagement and operational eco-efficiency. Currently, Best Buy’s greatest struggle is facing new industry competitors. The company is losing market share to online retailers, such as Amazon, and to its primary suppliers, including Apple, HP, and