Best Buy International Analysis
The Company Richard M. Schulze founded Best Buy with business partner James Wheeler when they opened “Sound of Music,” an audio specialty store located in Saint Paul, Minnesota in 1966. In 1967 Sound of Music acquired Kencraft Hi-Fi Company and Bergo Company, which led to a second and third store opening near the University of Minnesota and in downtown Minneapolis. The Sound of Music ended its first year with gross sales of $173,000(USD). In 1969 Sound of Music stock was first traded as a publicly held company and in 1970 they hit the $1 million mark in annual revenues. In 1983, Sound of Music’s board of directors approved a new corporate name: Best Buy Co., Inc. The name resembled its marketing strategy: Whatever the product, it would be inexpensive and a good deal. Best Buy went onto open its first superstore in Burnsville, Minnesota that provided expanded selling space, a wide assortment of discounted brand-name goods, central service, and warehouse distribution. The first stores began selling appliances and videocassette recorders, as they became regular household items. Best Buy’s debut on the New York Stock Exchange (BBY) came in 1985 with an offering of 8.3 million shares. In 1986 a public stock offering raises $33.6 million, which in result helped financed a 12-store expansion.
In 1989 Best Buy implements a revolutionary “grab and go” store format in a non-commissioned, warehouse-style environment. Richard Schulze was always looking for customer feedback and found the most customers disliked the pressure associated with salesmen working on a commission basis. Due to this customer feedback, Schulze took the superstore concept a step further by eliminating sales commissions. They called this new direction as Concept II. The Grab and Go format appealed to customers, as they were able to walk into a store, find what they were looking for, and walk out. Schulze stressed the importance of customer service to his employee’s, but also gave the
In 1989 Best Buy implements a revolutionary “grab and go” store format in a non-commissioned, warehouse-style environment. Richard Schulze was always looking for customer feedback and found the most customers disliked the pressure associated with salesmen working on a commission basis. Due to this customer feedback, Schulze took the superstore concept a step further by eliminating sales commissions. They called this new direction as Concept II. The Grab and Go format appealed to customers, as they were able to walk into a store, find what they were looking for, and walk out. Schulze stressed the importance of customer service to his employee’s, but also gave the
Cited: "About." BBY.com. Web. 30 Apr. 2010. . "Best Buy: Company History and Facts." Telegraph.co.uk. Web. 29 Apr. 2010. "Best Buy: Learning from Challenge and Change." Bby.com. Web. 29 Apr. 2010. "Best Buy Snaps up Future Shop for $580 Million." CBC.ca. Web. 29 Apr. 2010. Central Intelligence Agency. Web. 30 Apr. 2010. "Investor Relations." Web. 30 Apr. 2010. . "Schulze, Richard-Overview." Web. 29 Apr. 2010. "Summary of Australia 's Foreign Investment Policy." Web. 30 Apr. 2010. U.S. Securities and Exchange Commission. Web. 30 Apr. 2010.