Shopping has turned into a part of everyday life for most Americans. Large retail stores line major roads of American towns and cities, enticing buyers with attention grabbing advertisements for products which vary from everyday necessities, to flashy toys which promise hours of entertainment. Although many stores carry these entertainment products, like TV’s, computers, gaming systems, and mp3 players, there is certainly one company that stands above the rest as the “dominant technology and entertainment retailer” (taitsubler.com) in america – Best Buy.
With a gross income of over $50 Billion in fiscal year 2011, as well as a net income of $1.227 billion, Best Buy Co., Inc holds among the largest market shares within the consumer electronics industry, as they should. Best Buy, founded in 1966, is electronics merchant, whose stores are chock filled with expensive electrical toys and tools. Stores are split into departments, each department specializing in a form of technology. Each store features a Home Theatre, Computer/Tablet, MP3/iPod, Gaming, Digital Imaging, Car Electronics, Music/Movies, Appliances, and Mobile (cell phone) department, by which products as well as their accessories are on display.
Best Buy, striving to be a destination shop for customers, offers services to go together with their products. Through partnerships with companies such as Comcast, Dish Network, Time Warner, and Clear Wireless, customers can leave the Best Buy hours with connections to the net, cable or dish TV, and phone services. Through the acquisition of Geek Squad in 2002, Best Buy is additionally in a position to offer repair and installation services on a lot of its wares, like TV’s, computers, and appliances. Actually, Best Buy now brands all of its warranties and installation services with all the Geek Squad name, and encourages customers to apply their in-store service counters, where they are able to talk face to face with a Geek Squad agent about the issues they are experiencing using their technology.
Geek Squad will not be the only real brand to be owned by Best Buy. Product brands like Dynex, Insignia, and Rocketfish are common properties of Best Buy. These brands are mostly manufacturers of product accessories such as wireless mice (for computers), speakers, cables and cases, but both Dynex and Insignia are manufacturers of larger products, like TV’s. Having “house brands” is effective for your company because they result in higher margins on those products, and greatest Buy has greater control over product inventory levels and greater flexibility in the creation of new releases to match with market trends. As an example, Best Buy managed to react to the production from the IPad by creating several IPad accessories, such as cases and stands, through its brand Rocketfish. Not only did consumers benefit having a greater assortment of accessories to pick from, but in addition through the lower prices that arose due to competition in the accessories market.
Other brands associated with Best Buy are Magnolia, a branch of the house Theater department, by which higher end TV’s and speakers are sold, for those customers that desire above average performance from their TV’s and speaker set-ups, and Napster, which, until earlier this coming year, was an attempt by Best Buy to enter the songs streaming and download market. (Napster was recently sold to Rhapsody to have an undisclosed amount.)
Best Buy has experienced increasing difficulty with domestic expansion as well, facing stiff competition from other retailers, like Wal-Mart and Target, who may have recently put forth efforts to grow their electronics selections at increasingly huge discounts, and also from internet retailers such as Amazon.com and Newegg.com, who have the ability to offer large selections exceedingly lower prices because of their low overhead. Best Buy stores have already been called “Amazon’s showcase” by consumers who utilize the blue and yellow retailer as being a ueukql to find out and understand products in close proximity before ordering them from another company online.
Ex Best Buy CEO, Brian Dunn, however, posseses an optimistic look at his company’s strategy for competing with these others. Bestbuy.com is better Buy’s response to online competitors, and contains been called “extremely successful” by Dunn. In addition, it has an advantage over Amazon and Newegg; the products ordered from Bestbuy.com could be acquired in store, which eliminates the expense of shipping. 40% of online orders are picked up in store, in accordance with the article Best Buy Gets Squeezed which signifies that consumers do enjoy possessing this option offered to them. Furthermore, items ordered online may be returned to traditional locations, which consumers find convenient and reassuring. “Later on, physical stores alone will not be enough. Digital alone will never be enough. How they combine is exactly what really matters,” says Dunn (Best Buy Struggles with Global Ambitions).