Best Buy Case Study

BEST BUY In 1966, Richard Shulze opened a small business in St. Paul, Minnesota called Sound of Music. In the next 17 years Shulze's small store rapidly grew into a multi-million dollar outfit. In 1983, Sound of Music changed its name to Best Buy Co., Inc and the first superstore was opened in Burnsville, Minnesota. With the new name the store also began carrying more name brands, appliances, VCRs and offering central service and warehouse distribution. Throughout the nineties Best Buy became pioneers in offering the newest technology such as DVDs and high definition TVs. In 1999, Best Buy and Microsoft combined to cross promote each other and also offered a two for one stock split. Now in 2005, almost 40 years after the first store was opened in St. Paul, this global giant was named Forbes magazine's "Company of the Year". Financially Best Buy operates two reportable segments, Domestic and International. Best Buy's financial security relies on their Best Buy stores, Magnolia Audio Visual Stores (their high end store), and the Geek Squad (provider of in home computer repair, support and installation services). From 2005 to 2008, Best Buy wants to achieve a 7% higher income rate. The four strategies they plan to use to get to this financial goal are Customer Centricity, Efficient Enterprise, Service, and Entertainment. Some ways Best Buy has been saving money is by improving human resources, reduce fixed headcount, lower health care costs, increased productivity, and reduced their production cost to construct new stores.
Best Buy's S.W.O.T analysis
Strengths
Best Buy's strength is that they are a very large, well known company.
They have always been on the forefront of carrying the newest and most technologically advanced products. They are known also for their financing and great customer service.
Weaknesses
Best Buy's weakness is that although they are still making money their individual stores sales and gain are down 3% in 2005 as compared to