MARKETING CASE STUDY

Expert Service.Unbeatable Price.

Subsidiaries :Geek Squad, Pacific Sales, Magnolia, Future Shop

Headquarters: Minnesota, United States

World’s Largest Consumer Electronics Retailer

Revenue : $42 billion

1477 Retail stores worldwide!!!

V

V

VV

V V VV

VV

VV

VV

Powerful market position through

expansion

Salaries to commissioned sales people

Biggest seller of

home PCs

Relaxed shopping environm

ent

Introduced new store

concept

in 1983-1990’s

New Challenges

…

Increase in competition

Showrooming

Shift in consumers

interest

Dipping sales due to single channel

strategy Emergence of online

retailers

in 2000’s

No store

High

Varie

ty o

f ele

ctro

nic

ite

ms

offe

red

LowSize of store Large store

AmazoneBayNetflix

GameStopMagnoliaRadioShack

CompUSAFry’s

TARGETWal-MartCostco

The

Co

mpe

titi

on

Zon

e

Points-of-Difference

Strategies adopted by Best Buy to gain competitive advantage over other brands

Hired knowledgeable sales people to attend tech –savvy customers

Provided shopping assistants to help mom shoppers

Trained employees to give information about discounts and new

offers to influence price conscious people CUST

OMER

SEG

MEN

TATI

ON

STILL! The company struggled…

Hubert Joly – The CEO-man arrives…

in 2013

New Strategies

The revamped format is called the “Connected Store.”

Introduced a central runway to showcase the latest technologies.

Additional space to profitable products like smart phones, iPads.

Moved the declining categories to back end- TVs , CDs, DVDs, entertainment devices.

L Large touch screens to search for in-store product availability and conduct side-by-side product comparisons.

1. O

ptim

ized

lay

out

of s

tore

Decrease in Large stores

Increase in Small mobile stores

2. TRANSFORMATION

Drive cost reduction and Efficiency

Lower transportation costs Better use of labor Lower markdowns

Build strong industry position and Multi-channel sources

Blue Assist- allows customers to shake their device to get live help through chat, email

Increased product line in home emerging categories Reduced wait time for customers

Advanced key initiatives to drive future growthEducational sales approach to make people aware about latest technologies

Investment in Internet of Things Better post purchase support

3. R

ENEW

B

LUE

201

6

Geek Squad hires certified technicians called ‘agents’ to provide solutions to customer problems.

Geek Squad is a subsidiary of Best Buy and its precincts exist in all stores..

Geek Squad provides technological services - In-store On-site emergency

support Over Internet 24-hour telephone

service

4.

Improved customer help

Shipping option

Geek Squad Support

Rating

Easy tools for comparing prices

Nearest store

locator

Open-box Item at lower

prices

features

Membership cards

5. www.bestbuy.com

6. Best Buy App

More recyclable packaging

Purchase of green-

power

Collection of consumer electronics

and e-waste

Proper disposal of electronic

components

7. E

nvir

onm

enta

l C

once

rns

SWOT Analysis

STRENGTHS STRENGTHS

• Largest brick and mortar electronics retailer.

• Focus on customer service and support.

• Offers latest electronic items through multiple channels.

WEAKNESS

• Huge maintenance and costs. involved in maintaining large stores

• Dependence on third-party vendors.• Declining profit margin in unpopular

product categories

OPPORTUNITIES

• Expanding global presence.• Investment in latest technology.• New marketing and communication

channels to reach customers.

THREATS

• Intense Competition.• Showrooming.• Manufacturer’s direct engagement

with customers.

RECAP

Created by Avani Jain, NIT Raipur, during a marketing internship under Prof. Sameer Mathur, IIM Lucknow

Sameer Mathur

Indian Institute of Management,Lucknow

DISCLAIMER