Best Buy is an American multinational consumer electronics corporation headquartered in Richfield, Minnesota, a Minneapolis suburb. It operates in the United States as Best Buy Mobile and Best Buy Direct. Internationally, it operates under the brand names Best Buy China and Five Star. Best Buy Company was founded by Richard M. Schulze and Gary Smoliak in 1966 as an audio specialty store. In 1983, it was renamed and rebranded with more emphasis placed on consumer electronics. Best Buy’s subsidiaries include Geek Squad, Magnolia Audio Video, and Pacific Sales.
Best Buy operates under a multi-format business model that provides a seamless customer experience through its omnichannel capabilities. The company has physical stores as well as an online store at bestbuy.com. Best Buy also offers price matching on identical products when customers buy from Best Buy’s online store.
Best Buy is a publicly traded company, listed on the Nasdaq Global Select Market under the ticker symbol BBY. As of February 3, 2018, Best Buy had a market capitalization of $19.8 billion. Best Buy employs approximately 125,000 people in the United States and Canada as of March 2018.
Best Buy is currently the leader in the electronic retail industry. Following close behind are Circuit City and Radio Shack. Last year, Best Buys’ total sales were $35,934 billion, while Circuit City’s were $12,429 billion (“Competitive Landscape”). If you compare Best Buy and Circuit City in the realm of electronics retailing, you’ll notice that Best Buy has a staggering $23,505 billion lead over its competitor.
In terms of market share, Best Buy owns 20.8% and Circuit City has 11.4%. (“Competitive Landscape”). Even with the lagging economy, Best Buy is still projected to grow its earnings by 10% this year and 8-9% next year (“Best Buy Company Profile”).
Best Buy was founded in 1966 under the name Sound of Music. It was started by Richard Schulze and a partner. They started out as a small store in St. Paul, Minnesota that sold audio equipment. In 1983, Best Buy opened its first superstore in Burnsville, Minnesota. The company went public in 1985 with an initial public offering of $8.50 per share (“Best Buy Company Profile”). Best Buy has been profitable every year since going public, except for 2001.
Best Buy’s strengths are its efficient operations, knowledgeable sales staff, and broad product selection. Best Buy sells a wide variety of consumer electronics, including digital cameras, home-theater systems, and video games. In recent years, Best Buy has expanded its services to include Geek Squad (computer technical support), Magnolia Home Theater (customized home theater installation), and Pacific Kitchen & Home (appliance installation) (“Best Buy Company Profile”).
Best Buy’s main competitors are Circuit City and Radio Shack. Best Buy differentiates itself from these two retailers by providing more services and having a wider product selection. Best Buy’s goal is to be the retailer of choice for consumer electronics and to provide the best customer service in the industry (“Best Buy Company Profile”).
The rivalry from discount shops has the most significant influence on the electronic retail business. The stores that offer the same products as Best Buy but at a lower price have a huge impact on the industry as a whole. Wal-Mart, Target, and Costco are all blamed for increasing competition after Best Buy’s last earnings miss, in addition to declining margins for various items (Lee, 2007).
Best Buy’s business model is to provide end-to-end solutions for individual consumer electronics needs, which necessitates a greater employee involvement and higher service intensity. Best Buy has strategically placed large format stores in suburban areas and near competing retail shops to better serve customers. The aim of Best Buy’s marketing strategy is to establish itself as the low-cost provider of consumer electronics goods and services. The company has used cost leadership (Ansoff Matrix) as a basis for its generic approach (Porter’s model).
The company needs to focus on its online presence and expand internationally in order to stay ahead of the competition. Best Buy acquired Magnolia Audio Video in 2000 to enter the home theater installation and high-end audio market, as well as strengthen its brick-and-mortar operations. Best Buy entered Europe in 2002 with the purchase of 50% of the UK-based The Carphone Warehouse’s (CPW) retail business. Best Buy increased its ownership stake in CPW to 20% in 2008. In 2006, Best Buy launched an online music store called BestBuyMusicDownloads.com in the US, which has since been discontinued. Best Buy also has an e-commerce site in China called BestBuyCo.cn.
In order to increase its online presence, Best Buy needs to improve its website and make it more user-friendly. The company should also focus on expanding its international operations, as this is a growth area for the company. Best Buy needs to continue to innovate and come up with new ideas in order to stay ahead of the competition.
The Domestic segment includes all operations in all states, districts, and territories of the United States, under a variety of brand names including but not limited to Best Buy, Best Buy Mobile, Geek Squad, Magnolia Audio Video, and Pacific Sales. The International segment covers all activities outside the United States as well as its territories, which include Canada, Europe, China, Mexico, and Turkey.
Best Buy is a retailer of consumer electronics, home office products, entertainment software, appliances and other related services. The company’s operations are conducted through two segments: Domestic and International. Best Buy operates under various brand names in the United States, Canada, China, Europe and Mexico.
Best Buy is one of the largest retailers of consumer electronics in the world with over 1,400 stores globally as of February 2014. Best Buy also operates Best Buy Mobile standalone stores in the United States and Best Buy Express automated retail locations in airports across the United States.
Geek Squad provides technical support to consumers and small businesses either in-store, on-site or via remote means, including telephone and the Internet. Best Buy’s Services Division comprises of Geek Squad, Magnolia Audio Video and Pacific Sales Kitchen & Bath Centers. Best Buy provides service contracts to consumers for warranty coverage beyond the manufacturer’s warranty on products purchased from Best Buy or from other retailers. Best Buy also provides product installation services and protection plans, such as Geek Squad Protection Plans, that cover accidental damage and product malfunctions.