According to this case, and concerning about the strategy that Best Buy has created, retailers can similarly create a retailer-led product strategy to leverage their customer knowledge for product differentiation and to understand what the needs of the customers are; they must discover what satisfies the customer and what not. In addition, the retailer can seek for news partnerships, new stores, new countries and new categories and services in order to increase their net sales and their share market.

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It’s very important invest in marketing study aiming to discover what the other companies are doing. Besides, with the time, the smaller retailer can increase significantly even more than the bigger companies as Best Buy. 2. Analyse the data in Tables 1 and 2. What conclusions do you reach? Table 1 Trying to explain the consumer behaviour, after a good period of consumer spending between 1993 and 1995, and up and downs between 1996 and 2006, there was an increased 4. 0 percent in 2007, a severe slowdown compared with the strong gains in prior years. In the following year, the increase was only 3. percent how it was expected, due the weaker computer spending growth. The next year the result was not too much better (4. 0 percent increase). The growth should pick up again in 2010 to 6. 1 percent before the narrow growth in the final two years of the forecast period but remain sleep. The prices have trended downward from the beginning in the consumer electronics and computer categories. It means that the expending on consumer electronics is due not only for the price, depend also of the marketing strategy and the incomes that the consumer could have. Table 2

Best Buy, Wal-Mart, Circuit City, Target and Dell were the largest U. S. sellers of consumer electronics between 2003 and 2007. Both Circuit City and Dell lost market share, while Best Buy, Wal-Mart and Target increased Market Share. The situation continued to go quite badly through 2008 for Circuit City, so much so that it went out of business in 2009. This table, show the Best Buy strategy as the best to gain land in the market share’s field. If this company continue applying this scheme and investing in marketing study, they could remain leading the market, even with strong competitor as Wal-Mart and Circuit City. . Why has Best Buy been able to weather the recent economic downturn better than many other retailers? Best Buy has created the strategy of sell products developed by others but branded as their own; the company has also done something different in order to differentiate itself in the market. First, it leveraged its deep knowledge of consumers to understand what consumer needs were unmet in the market. Second, it move toward PC OEMs (it means the component is intended to be sold as part of a complete system instead of as an individual component) to develop a unique line of laptops to meet consumers specifications.

Third, it includes the laptops with extended warranties, antivirus protection, and/or Geek Squad service. Finally, it created its own category brand for these laptops (“You Spoke. We Listened. “) that transmit relevance and simplifies the buying process, yet it is dependent of the OEMs’ own brands to transmit quality and reliability. With this kind of product, Best Buy uses its unique relationship with customers to create product differentiation, thereby giving solutions to its customers. 4. Does Best Buy do a good job with regard to the retailing concept? Explain your answer.

Form my outlook; Best Buy has done a good job regarding the retail conception of the last years related with their competitors. Its current retail model is to be the one stop shop for a customer’s electronic needs, irrespective of demographic differences. Nonetheless nowadays, the company has been some threats concerning the market; therefore, the store needs to stock most price points, brands, and categories. This strategy resulted in large stores with confusing layouts and overwhelmed staff. Best Buy should try to identify its core consumers for each category of products and target its offerings to those consumers.

They should also carefully evaluate categories and brands and stock only the best performing products. This would allow them to reduce store size, while at the same time retain its experience and presence in multiple categories. 5. Assess Best Buy’s global strategy. Best Buy is a company that is a financially strong and profitable, that has generated a good few billion in cash flows from operating activities as is shown in its financial statements. They also delivered positive operating income through their trajectory.

They grew total market share in the third quarter according to the most recent public data available. They have closed down certain operations that were not profitable (according to recent reports), which they expect to have a positive impact on their earnings going forward. And they are focusing the company on areas where they see the greatest opportunities for growth and profit: mobile devices and connection plans; enhanced digital and e-commerce strategies; growth in their services business; and expansion of their established business in China.

Furthermore, they offer to the customer the experience to buy in a physical store, compared with Amazon that is one of the strongest competitor, there’s no doubt that the internet, and the mobile web in particular, have changed the way people shop, but there is strong evidence that consumers continue to value the experience of shopping in stores. According to a recent study that I found useful to point out, in order to clarify the Best Buy’s strategy, it shows that nearly 80% of consumer electronics revenue still moves through physical stores. Additionally, approximately 40% of customer purchases made through Bestbuy. om are picked up in one of their stores. This strategy has evidenced that the people still enjoy buying in a physical store, and this company give to the consumers the opportunity to do it. 6. Look at the Web site of Best Buy’s Geek Squad. Why has this service business done so well? The Geek Squad is a subsidiary of the Best Buy Company. This company has done so well, due to they offer a la carte pricing, so you’re unlikely to get any “surprise” fees. Because they are a national chain, you should, in theory, at least, be able to take your computer into any Best Buy in the country and have the techs able to look up the history.

This would be extremely useful if, say, you travel a great deal and might need to drop it in for repair halfway across the country. Or if you operate a business with multiple locations and need a local repair service who is familiar with your network. Also, because they are a retailer, you are not likely to be waiting on most parts, as they should have them in stock. Your local PC Repair shop may have to make a parts run, and that could mean extended downtime in certain circumstances.

The above mentioned services have attracted numerous of customers, and most of them are woman who are willing to expend more money into the customer service. The company helps the female population when trying to install e. g. a “home theater”. If someone needs fast, professional solutions and the advantages of nationwide support, the Geek Squad may be just what you’re looking for. Who is not happy with this sort or service? 7. From strategic planning perspective, what must Best Buy do in the future to try to stay ahead of Wal-Mart?

Will it be able to do so in the long run? Explain your answers. Best Buy should be able to service any make and model of computer. An older computer, a Mac, or certain proprietary computers might pose a problem for your local shop, but Best Buy should have an internal database to help if an unusual problem pops up. In addition, sales of mobile phones, related devices as well as the wireless service are a big deal for Best Buy. They have the expertise to help customers connect on the mobile platform not just with phones, but also with notebooks and tablets.

Therefore they can continue investing in this field in order to improve and reach more loyalty to the customers. It’s about understanding what problems customers face in their lives and then providing mutually advantageous solutions. Best Buy should take more time to understand who its customers are and what they need and then started selling solutions instead of products. Accordingly, Best Buy should adopt mostly common sense solutions once it understood the issues involved. Also, it has to be more organized separating merchandisers to work together.

In the stores, kids could have special play areas while their moms browse. The company can remain working with Geed Squad to continue helping with installation as is required. Buy a flat screen TV and they’ll have it running before your favorite show airs. Division of labor, specialization, and departmental responsibility are necessities in any operation that Best Buy could have. But this company today is still structured around product and geography and this is one of the issues that they should change. They must have an excellent perspective on what they make and where they distribute and sell their products and services.

Best Buy needs adjusting distribution schedules, creating new store space, and training front-line employees to serve as personal shopping assistants. It requires connection and cooperation across broad swaths of the organizational terrain. More often you can bridge them with some persuasion and cajoling. But however, they have to be aware about what they do, and that takes determination and more than anything else, strong and sustained leadership. The suggestions above, will take lots of work, but If Best Buy applies such suggestions, definitely they are going to be ahead of Wal-Mart and even, ahead of the others strong competitors.

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