Another prevalent issue is that Best Buy's corporate culture has become complacent and its new strategy is faced with a degree of resistance B: A corporate culture resistant to change is unhealthy to the execution of this new strategy, as executives will be reluctant to implement ideas from mid-level managers and representatives at the store-level and field-level.
This is a direct violation of the philosophy of customer-centricity. Although tensions among the executive level have eased slightly, there is still a cultural trait of resistance to change that must be eliminated. Profitable customer segments and behaviours will change over the years, and Best Buy's executive team has to adapt to these changes quickly. Failure to adapt to customer segment changes under the new customer centricity strategy will result in a lesser competitive advantage and unprofitable earnings performance.
In order to execute customer-centricity to maximize its full potential of earnings, there needs to be more strategic importance placed on Best Buy's human capital at the lower levels. First, training at the store-level and field-level needs to be upgraded to ensure that decisions being made in the importance of customer segments are balanced with financial objectives. As a result, it is important to provide and train store-level and field-level mangers in key strategic financial measures.
A thorough understanding of these key financial measures will help guide the decision making process at the lower levels. However, it is not sufficient that employees are trained and are able to analyze strategic financial indicators, but the information must be provided to them promptly and consistently.
Page 1 of 5. ISSUES Strategic Decision-Making is in the Hands of Mid-level Managers and Sales Associates With the implementation of customer-centricity, customer focus is regarded more highly among the value chain, giving lower-level employees more power in the profitability of operations.
Best Buy offers both in-store pickup and online marketing. An analysis of the strengths, weaknesses, opportunities and threats facing the company is crucial as it makes understanding the future of the enterprise. In terms of strengths, the company has shown willingness to adopt multiple approaches and solutions. Such a move is critical as technology and economy climate are always changing. The company operates on a decentralized structure and therefore branch stores do not have to wait for decisions from the central management.
This fastens the decision making process and hence creating a better management. The company has also managed ti create local market familiarity.
In cities such as Chicago, certain products are found i. Another major strength of the company is that it has up to date information on distribution and logistics from its wholesale businesses. Best Buy also has the capability and capacity to create supply chains across the US. Best Buy also has a variety of store brands and regional banners and therefore customers have a wide range Abhijeet, Best Buy lacks shopper data for targeted market programs or local insights.
This can be a big hindrance as customer communication is critical in satisfying their needs. Best Buy also has an underdeveloped marketing expertise Abhijeet, Online marketing has proven to be the most common in modern day with the current technological advancement.
Best Buy also faces challenges in alignment of the divisions of the organization. The retail systems are poorly integrated. The company also experiences difficulties due labour expertise in short supply experienced in the store operations. The company also has high overhead costs and consequently may go out of business. Best Buy has a leverage card program for its loyal clients. Such a program attracts more customers as they provide shoppers with deeper insight of the company. Such ventures can result in increased sales.
Best Buy can also benefit from centralization of its operations. Centralization will lead to better coordination of the activities of the company Abhijeet, There is also a potential of increased sales if the company was to focus on higher-margin retail business. Some of the other departments the company can concentrate on organics. Best Buy can also create national banners as a way of improving its marketing strategy. The company can also benefit from the leverage acquired from the acquisition of Albertsons in West Coast, and, therefore, expanding the scope of its operations.
History has it that companies with great leverages have higher levels of fixed costs. Consequently, such firms tend to experience more significant break-even points than companies without leverages Abhijeet, The only benefits Best Buy can have from such an arrangement is that its sales may increase beyond a break-even point.
The companies also face competition from Wal- Mart Super competition in most key markets. The fact that the primary system of management is decentralized; there are challenges of dependency on local management managerial skills, which may lead to failure of some stores.
Decentralized management also lacks an established integration of systems. The wholesale business is not appropriate for many customers, and Best Buy risks are losing customers. There are also possible operation failures which can result in centralization operations in an attempt to establish standardization.
The current operating system comprises of both domestic and international markets. However, the domestic market experienced slower growth rate as compared to the international market. The international segment of the market mostly comprises of Canada and China, even though there are newcomers such as the United Kingdom.
Future Shop and Best Buy deal in Consumer electronics and services such as installation and repair. Future Shop was acquired in Geek Squad retails stores deal in computer technical services, and these are mostly standalone systems. These retail stores were acquired in Magnolia Audio Video specialized in home theater and related services and was acquired in Pacific Sales Kitchen and Bath specializes in remodeling homes and related products and services, and was acquired in Jiangsu Five Star Appliances were acquired in and these stores specialize in appliances and consumer electronics.
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Best Buy Company Inc. By Lauren Bradshaw. March 5, SWOT analysis will help to examine the condition of the company from internal as well as external. Tags: best buy company, business essays, custom essay, economics essays, example essay, sample essay, sound of music.
Read Best Buy Strategic Analysis free essay and over 88, other research documents. Best Buy Strategic Analysis. The overall analysis of Bets Buy’s new strategy focusing on “customer-centricity” is leading the company in the right direction to. Best Buy Co. was founded in by Richard Schulz under the name Sound of Music. The company headquarters are located in Minnesota, and the company is the largest retailer of consumer electrical appliances in the US with more than stores (Wikinvest, ).
View this case study on Strategic Analysis of Best Buy. Best Buy Co Inc is the U S based multi-channel consumer Electronics Company based at Richfield Minnesota. Free Essay: The overall analysis of Bets Buy's new strategy focusing on "customer-centricity" is leading the company in the right direction to grow.