Insert surname 10
BestBuyCo., Inc. is an American multinational electronics corporation. It isa specialty retailer for consumer electronics such as personalcomputers, computer software, mobile phones, and computer appliances.It is the world largest multi-channel retailer dealing with consumerelectronics, entertainment software, home and office products, andtheir appliances. It is also the largest retailer corporation inCanada and United State with more than one billion visitors to theirsite each year. Its headquarters are located in Richfield, Minnesota,U.S. It has other stores in Canada, United States, Mexico, china, andPuerto Rico. The corporation has one hundred and forty thousandemployees who are committed to deliver technology solutions (BestBuy Book, 45).The corporation gives its customers a chance to access internet, getideas, and have fun by using their electronic devices. Itssubsidiaries include Geek Squad, Pacific Sales, Cowboom, CinemaNow,and Magnolia. Best Buy operates under Greek Squad, Pacific salesbrand, Magnolia Audio Video, and Best Buy Mobile in United States. InCanada, it operates under Best Buy, Connect Pro, Future Shop, CellShop, and Greek Squad brands. In china, the Best Buy operates underFive Star and Best Buy Mobile. Lastly, it operates under Best BuyExpress and Greek Squad. BestBuyCo., Inc. sells secular from AT&T Wireless, Verizon Wireless,Boost Mobile, Sprint PCS, and T-Mobile in their stores. Best BuyMobile stores are available in most shopping malls. In 2001, DiscountStore News awarded it for “Specialty Retailer of the decade.”Later, in 2004, the Forbes Magazine named it as the “Company of theYear” and in 2005, ranked it as “America’s Most GenerousCorporation” due to its giving in 2004. In 2006, the ForbesMagazine ranked it as the most admired company.
Historyof BestBuyCo., Inc.
GarySmoliak and Richard M. Schulze founded the corporation in 1966.Initially, it was named as audio specialty store. It was laterrenamed and rebranded as BestBuyCo., Inc. with more emphasis on consumer electronics. In 1966, thetwo businessmen opened an electronic shop that specialized with highfidelity stereos. The store was located in Saint Paul, Minnesota.Richard financed the business from his personal savings and some helpfrom his family. One year later, Richard purchased the Bergo andKencraft Hi-Fi companies. In the same year, it made a profit of fiftyeight thousand dollars and pulled in revenue of one million dollars.By 1967, Richard and his friend had already opened three more storesand the company was listed on the American Stock Exchange. By 1978,the business had nine stores throughout in Minnesota. In 1981, thebusiness had grown to be the largest and the most profitable musicstore. Unfortunately, its store was hit by tornado and show roomswere totally destroyed. However, the storeroom remained intact. As aresult, Schulze came up with an idea of selling the stock under“Tornado Sale” to get rid of the damaged stock. In hisadvertisement, he promised a “best buy price on every product.Surprisingly, the business made more money in four days than it didin a usual month.
In1983, Schulze renamed sound of music business as BestBuyCo., Inc. By then, the business has seven stores with annual sales often million dollars. The company also started selling other productssuch as home appliances like washing machines. As time passed by,BestBuyCo., Inc. opened more store in Minnesota and other parts of theworld. Due to its high profit, the corporation was included in theNew York Stock Exchange in 1987, Standard, and Poor’s S&P 500in 1999.
BestBuyCorporation operates as a multi-national retailer of technologyproducts in Canada, United States, Mexico, and China. Currently, theBestBuyCo., Inc. is operating with one hundred and nine Best Buy stand-alonestores and one thousand and fifty-six Best Buy stores in UnitedStates. It is operating with seventy-two Best Buy stores, forty-nineBest Buy Mobile stand-alone stores, one hundred and forty Future Shopin Canada. In China, the corporation is operating with two hundredand eleven Five Star d fourteen Best Buy stores in china and Mexicorespectively. The building of Best Buy stores and their affiliate’sstores are painted with light brown color. They also have a symbol ofthe corporation and the top of main entrance. Their entrances aredesigned with a blue box emerging from the building.
TheBestBuyCo., Inc. sells consumer electronics and other related merchandisesuch as mobile phones, car stereos, digital camera, Blu-ray discs,DVDs, music, television, home theatre, camcorders, satellite radio,video games, computer software, and hardware. Additionally, thecorporation sells home appliances such as dryers, washing machines,kitchen and bath fixtures, sinks, bathtubs, and refrigerators. Thecompany also sells mobile phones and computing products such aslaptops, mobile phone, desktop computers, e-readers, tablets, andtheir related accessories and services. In every Best Buy store,there is a Geek Squad for machine repair and warranty services. Thecorporation offers other services such as product repair, extendedwarranty services contracts, delivery, technical support, insulationservices under Greek Squad brand. At the stores and shops, they treattheir customers with snacks and beverages. The company operates undere-commerce operations, call centers, and retail stores whereby theyconduct their operation under various names such as Five Star, GeekSquad, Pacific sales, Future Shop, and Best Buy Mobile. BestBuyCo., Inc. also operates under domestic and international segment. Thedomestic segment comprises of the operations in the United States andits territories. The international segment comprises of the businessthat the company in Europe, China, Canada, and Mexico.
Thecorporation has corporate governance that consists of corporateofficers, board of directors, and board committees. The shareholdersof the corporation elect the board to oversee the business and itsaffairs. The board also advises, counsels, and oversees themanagement of the company. The members of the board opt to be of highethical standards. The BestBuyCo., Inc. is the chief executive officer who is also the president ofthe corporation.
In2001,theBestBuyCo., Inc. joined international market with the acquisition of thefuture shop. In 2006, the company entered china after acquiring thefive star appliances. In 2008, the company also started to operate inCanada and china. Later in 2010, the company started to operate inMexico and Turkey. However, the international operation is lessefficient than the domestic operation despite demonstrating growth of37%.
In2001, BestBuyCo., Inc. bought the Future shop in Canada and started to open BestBuy retail stores. The stores have been producing goods resultscompared to its US counterparts. In 2007 and 2008, the Canadianstores generated an approximate of twenty two million dollars andthirty four million dollars respectively. However, the operatingmargin has been considerably low in Canada compared to US operatingmargin. This is primarily due to increased sales of lower-marginproducts. For instance, the domestic operating margin in UnitedStates was 5.8% in 2007, while that of Canada was 1.7%. Nevertheless,the operating margin has been significantly improved. In 2008, theoperating margin rose from 2% to 2.4% (Zentes177).
Asa leading consumer electronic retailer, the BestBuyCo., Inc. attempted to compete with the consumer electronic marketsin China (Welsh63).In 2006, the Best Buy Company took its first step by purchasing thethird largest consumer electronics and appliance retailer in china,Jiangsu Five Star Appliances. It also opened its first retail storein Shanghai in 2006. The Jiangsu Star Appliances had generatedrevenue of seven hundred million dollars in 2005. By the end of 2009,BestBuyCo., Inc. had opened more than one hundred and sixty Jiangsu fiveStar stores in china. In addition, it had also accumulated more thanone million dollars of the total sales of the company products. TheBest Buy uses Jiangsu as a means to gain information about retailindustry and learn about the Chinese culture. In 2008, BestBuyCo., Inc. announced its intention form a joint venture with carphonewarehouse, which was the largest mobile phone retailer in UnitedKingdom.
TheBest Buy faces various challenges. Firstly, it faces stiffcompetition despite being the largest retail corporation (Alderman,Bill, and Eleanore 144).However, the competition comes from other companies from otherindustry. Retail Corporation as Walt-mart, Target, and Circuit City’sBusiness are the great competitor of BestBuyCompany (Plunkett106).For instance, in 2008, Wal-Mart recorded $378 billion in sales and$92.2 million in gross profit. This was more than double of sale thatBestBuyCo., Inc. made for the same year. However, Walt-mart does notcalculate it sales according to different products hence, it isimpossible to the two business. Nevertheless, if the Walt-martelectronics is merely 1% its operating profit is still more than BestBuy Company. Competition is more common because there is little or noswitching if the buyer chooses to buy an electronic device anywhere.Furthermore, the devices do not have a symbol that differentiatesthem, and a consumer can get similar devices at all electronicstores. Hence, the companies tend to compete on prices and othercustomer services such as product repair, delivery, and technicalsupport, among others.
Further,the BestBuyCo., Inc. faces the challenges of bargaining power of buyers, as wellas bargaining power of suppliers. The bargaining power of buyers isextremely low due to the weak and fragmented buyers. This isprimarily due to firstly, the purchase volume is low. Most of thebuyers typically buy an item from a specific company. It is rear toget an individual purchasing more than one similar item. Hence,buyers do not have any influence on the sale price of the items.Secondly, buyers do not account for a high percentage of their budgetto purchase electronic products unlike purchasing a car or a house(Lamb,Charles, Joseph, Hair, and Carl 68).In addition, there is no completion among electronic productmanufacturing. Thirdly, electronic products are more necessities thanluxury hence, they do not take much interest produced products andtheir prices. Lastly, the buyers do not have the ability to come upwith their electronic products or come up with their own retailshops. Eventually, the buyers of electronic device do not havesignificant bargaining power over the manufacturing companies nor dothey have any influence on the price of the devices (McWilliams45).On the other hand, suppliers of the products have a high bargainingpower because they are few in the market demand. The most commonmanufacturers are Samsung, LG, Sony, Toshiba, and Panasonic. Thesuppliers are determined to produce the most latest technology andthe retail companies like Best Buy purchase them to satisfy theircustomers. The manufacturers companies have the significant influenceon the devices they produce and their pricing. The high bargainingpower of the suppliers is because to the low numbers of stores.Hence, the electronic retailers have no other option but purchase theproduct to retail their position in the competitive market.
Successof BestBuyCo., Inc.
Sinceits establishment, BestBuyCo., Inc. has demonstrated high financial growth. It has consistentlyrecorded an increasing profit every year (Griffin89).The company revenue has grown from 1.01% to 9.90% from financial year2005 to 2008, from $27 billion to $40 billion (BestBuyBook12). In addition, the operating profit has also significantlyincreased to 10.64% from 2005 to 2008, from $1.4 billion to $2.0billion. Further, the net income has also tremendously increased to9.35% from 2005 to 2008, from $980 million to $1.5 million. Therevenue growth increased net earning decreasing the administrativeexpenses hence and increase in net and operating profits. As aresult, the company strengthened its financial statues in the market.
Further,the BestBuyCo., Inc. has maintained its reputable brand name. Since 1966, theBest Buy Company has been one of the best consumer electronicsretailers in the world due to its highly regarded management (Kwok103).In fact, other organization have recognized and awarded the company.For instance, in 1993, the Forbes Magazine ranked it as the secondlargest consumer electronic retailer. In 2004, Forbes magazine namedit as “the company of the year” and named it as the “top 10America’s Most Generous Corporation.” In 2001, the Discount StoreNew named it as the Specialty Retailer of the decade (Day78).In 2006, the fortune magazine listed the company as the “mostAdmired Companies.” For many years, Best Buy has worked hard tomaintain its name through offering wide range of products andadmirable services. In addition, the company has opened more retailerstore in both domestically and internationally. The company has morethan one thousands domestic retail stores and more than threethousands international retail stores.
Unluckily,Buy did not succeed to conduct businesses in china hence, one of itsmost unfortunate failure. The companyattempted to operate to operate under strict requirement from theChinese government and cultural uniqueness of Chinese (Griffin 96).As a result, the company remained in uncorrectable state. The Chinesegovernment imposes heavy taxes on foreign companies that invest inits country. The idea of Best Buy Company to invest in china was notdriven by the unmet market demand or business opportunity rather thanthe pressure to globalize. The Best Buy Company had little brandrecognition compared to its domestic companies like Suning and Gome.The Best Buy also took a lot of time before understanding the Chinesecustomers’ needs since their culture and demographics are differentfrom other countries. As much as Best Buy thought they have what ittakes to venture in Chinese market, the Chinese people with theirprice-orientated mind thought otherwise. They always thought thatSuning Store had the best prices.
BestBuy is the largest electronic consumer outlet in US ((Lambet al. 144).Apart from selling electronic devices and their accessories, it alsosells home and office appliances. Currently, it operates in Canada,Europe, United States, and china. The company is entirely dependableon its customers who purchase their products. Its main goal is to dowhatever it can in order to satisfy its customers. In 2013, itsoperating income was $1.252 billion and its net income was -$1.252billion (Day45).Further, its total assets were estimated to be $3.175 billion.Indeed, the corporation is at a better position in the market.
Alderman,Bill, and Eleanore Wilson. RecreationalVehicles: Finding the Best Buy.Chicago: Bonus Books, 1996. Print.
BestBuy Book.Lincolnwood, IL: Publications International, Ltd, 2000. Print.
Day,George S. "Aligning the Organization with the Market."Reflectionson the Futures of Marketing(2012).
Day,George S. "Aligning the Organization with the Market."Reflectionson the Futures of Marketing(2012).
Griffin,Ricky W. Management.Mason, OH: South-Western Cengage Learning, 2011. Print.
Kwok,Ian, Rhett Dornbach-Bender, and Rebecca Lange. "BEST BUY CO.,INC." (2009).
Lamb,Charles W, Joseph F. Hair, and Carl D. McDaniel. Marketing.Mason, OH: Thomson/South-Western, 2008. Print.
McWilliams,Gary. "Analyzing customers, Best Buy decides not all arewelcome." TheWall Street Journal Online(2004).
Plunkett,Jack W. TheAlmanac of American Employers 2009: The Only Guide to America`sHottest, Fastest Growing Major Corporations.Houston, Tex: Plunkett Research Ltd, 2008. Print.
Welsh,Elizabeth T., et al. "E‐learning:emerging uses, empirical results and future directions."InternationalJournal of Training and Development7.4 (2003): 245-258.
Zentes,Joachim, Dirk Morschett, and Hanna Schramm-Klein. StrategicRetail Management: Text and International Cases.Wiesbaden: Gabler, 2011. Print.