Today, Best Buy advertises using a “Low Price Guarantee” (Best Buy, 2013). They will match prices on qualifying products if the consumer finds a lower price elsewhere (Best Buy, 2013). Best Buy claims to be the “world’s largest multi-channel consumer electronics retailer with store in the U.S., Canada, China and Mexico” (Best Buy, 2013). That being said, they are the 10th largest online retailer in the U.S. and Canada (Best Buy, 2013). Their loyalty program, Best Buy Reward Zone, is ranked among the best of its kind (Best Buy, 2013). Best Buy has over 145,000 employees worldwide (Best Buy, 2013).
In Best Buy’s 2013 Annual Report, they company discusses its current International Segment (Best Buy, 2013). In 2009, Best Buy acquired the remaining 25% interest of Five Star (Best Buy, 2013). In 2013, they introduced the Best Buy Mobile concept in China (Best Buy, 2013). After success in its Canadian stores, they now offer the store-within-a-store experience in select Five Star stores (Best Buy, 2013).
Best Buy’s strength as a company comes from its innovative nature. They took their salespeople off commission to provide a different, informal buying experience for their customers (Ferrell & Hartline, 2011). The company also specializes in repairs through its Geek Squad division, which is an innovation that sets them apart from competitors (Ferrell & Hartline, 2011).
Best Buy’s weakness is its ever-growing competition in the CE retail market (Ferrell & Hartline, 2011). The online retailers are simply outpacing them. Even when a consumer goes to the store to look at a product, Best Buy is not guaranteed a sale. Often consumers will go try out the products in a store, like Best Buy, but then order the product online after they have left the store. It is just too easy to compare prices in the online environment.
The company has opened up opportunities with its “Low Price Guarantee” (Best Buy, 2013). Even if a consumer does find a product cheaper online, now they can take that offer into a Best Buy store for a price match. Instead of waiting for shipping, the customer can have immediate access to the product they are purchasing. They also have opportunities in growing their reach internationally. Best Buy already has locations in the U.S., Canada, China and Mexico (Best Buy, 2013). If they expand further, it can only provide larger international brand recognition.
The threats to Best Buy will always be its online competition, like Amazon.com. They must find a ways to remain competitive in the online retail market. With more international locations, they will gain more international brand recognition and with that online sales will grow.
A dual-brand strategy should be used only when there is a fragmented market (Ferrell & Hartline, 2011). There needs to be room for both brands to grow in the market place (Ferrell & Hartline, 2011). The dual-brands need to be positioned as competitors with different business strategies (Ferrell &...