Business: Retailing and Low Price Guarantee
Go to www.bestbuy.com, click on the investor relations section (i.e., Four Our Investors), and explore Best Buy’s latest annual reports and 10-K (SEC) filings to see if you can identify the key elements of Bust Buy’s strategy.
Provide an overview of Best Buy and use the framework provided in Figure 1.1 to help identify the key elements of Best Buy 's strategy.
One of the key element of Best Buy’s success is its competitive advantage. Competitive advantage as stated by Thompson et al. (2012) is the “ability to meet customers needs more effectively, with products or services that customers value more highly, or more efficiently, at lower cost; (p. 6). Best Buy has always taken an innovative approach to retailing. The company is aware of the types of customers that it drew, by creating their Customer Centricity model. The model consisted of five customer groups, each was given a name of its own. The company’s employees were given extensive training and was taught how to specifically handle each different customer segment, while merchandise, promotions and even entire stores were changed to target each market segment.
Address what approach toward winning a competitive advantage does Best Buy seem to be pursuing?
One of the biggest challenge Best Buy is facing is the stiff competition from online retailers. Customers are able to buy the same quality product at a lower price from online retailers such as Amazon.com and Walmart.com. Facing the loss of retail sales to lower price offers from these retailers, Best Buy has adopted an aggressive online offering, matching any online offers to in store shoppers. This is known as best-cost provider strategy which is to “offer the lowest prices for differentiated goods that at least match the features and performance of higher priced rival brands” (Thompson et. al, 2012, p.9). The price match is a salvo aimed directly at companies such as Amazon.com, Walmart.com and Target.com. The company is the only retailer
Provide an overview of Best Buy and use the framework provided in Figure 1.1 to help identify the key elements of Best Buy 's strategy.
One of the key element of Best Buy’s success is its competitive advantage. Competitive advantage as stated by Thompson et al. (2012) is the “ability to meet customers needs more effectively, with products or services that customers value more highly, or more efficiently, at lower cost; (p. 6). Best Buy has always taken an innovative approach to retailing. The company is aware of the types of customers that it drew, by creating their Customer Centricity model. The model consisted of five customer groups, each was given a name of its own. The company’s employees were given extensive training and was taught how to specifically handle each different customer segment, while merchandise, promotions and even entire stores were changed to target each market segment.
Address what approach toward winning a competitive advantage does Best Buy seem to be pursuing?
One of the biggest challenge Best Buy is facing is the stiff competition from online retailers. Customers are able to buy the same quality product at a lower price from online retailers such as Amazon.com and Walmart.com. Facing the loss of retail sales to lower price offers from these retailers, Best Buy has adopted an aggressive online offering, matching any online offers to in store shoppers. This is known as best-cost provider strategy which is to “offer the lowest prices for differentiated goods that at least match the features and performance of higher priced rival brands” (Thompson et. al, 2012, p.9). The price match is a salvo aimed directly at companies such as Amazon.com, Walmart.com and Target.com. The company is the only retailer