Best Buy’s Assessment for Increased Sales Growth and Customer Interaction
MemorandumTo: Hubert Joly, CEO, Best BuyFrom: Edward BorjonDate: 3/10/2016Re: Best Buy’s assessment for increased sales growth and customer interaction Executive Summary: To combat diminishing sales growth, Best Buy must continue to differentiate its product line, enhance its online platforms, and expand internationally. Presently, Best Buy faces constant pressure from various competitors. These competitors include cherry-picking Wal-Mart and e-commerce giant Amazon. In order to achieve its objectives, Best Buy must be wary of losing focus of its goals by overcomplicating services and products offered. Best Buy also needs international expansion to new markets. The use of a SWOT analysis (Exhibit 1), Porter’s Five Forces, and analysis of financial information (Exhibit 2) has helped show the options Best Buy should take. Best Buy can meet its goals by offering a more refined product line through leveraging current acquisitions such as Geek Squad, Napster, and Pacific Sales Kitchen to further entice its potential consumers to purchase from Best Buy, updating its mobile and online websites to open the doors for more consumers, and effectively expanding internationally to reach new markets. By doing so, Best Buy will be able to differentiate itself from all competitors and attract more consumers than before.
Introduction:Best Buy has undergone many phases throughout its 30+ year history to become the world’s largest consumer electronics retailer. Since its inception, Best Buy has emphasized its commitment to discounted, value products (2). During its history, Best Buy has experienced large periods of growth with few stagnant years. Previous CEOs pushed Best Buy to help make it the electronics retailer leader that it is today. Currently, Best Buy faces a large issue. Best Buy is losing its place as the leader in consumer electronics with measly growth and constant pressure from Amazon. Best Buy must assess its international presence, update its online and mobile platforms, and offer a product line that fits its mission of providing discounted, value goods. In analyzing Best Buy’s options, several analyses took place, including an external analysis of the general industry environment with an emphasis on Porter’s Five Forces and a SWOT analysis and chart (Exhibit 1). An internal analysis of Best Buy’s financial information took place. These analyses revealed pervasive issues for Best Buy. Recommendations for Best Buy to achieve greater growth would be to revamp its mobile and online platforms, expand internationally, and offer a more refined product line by leveraging its current acquisitions. Best Buy could implement its goals by slowly phasing out a small portion of its brick-and-mortar stores to free up more operating income, slowly updating its websites to offer a smoother transition, and expand into developing markets to set its mark.