Hello Maddy, here is your paper, Run through it and get back to meThanks1BEST BUYTitle: Best Buy Case StudyName:Institution Affiliation;Course Number;Course Name:Instructor’s Name:Assignment Due Date:2BEST BUYIntroduction:In 1966 James Wheeler and Richard Schulze founded ‘Sound of Music company, but in1983 they renamed it to Best Buy as currently known. Initially, Best buy specialized as an audiospecialty store and with time, it expanded to become amongst the largest companies dealing inconsumer electronics. Best Buy strategized on a growth policy that was through global expansionand acquiring of smaller product-service-based firms. By 1992 the firm had sales worth to a tuneof 1 billion dollars and was amongst the 10 top most performing companies in stocks in 1990 to2000 period (Forbes). Furthermore, Best buy expanded even to the international market by makingdebuts in Canada, Mexico, China, Turkey, UK, etc. This was through partnerships with parentcompanies or by acquisition or through opening its own branded stores (Marne L. Arthaud-day,2016).However, as technology improved with time, Best Buy faced a big problem. Onlineretailing which later came by, through the onset of technology advancement led the reshaping ofthe retail sector. Companies with an online presence like Amazon increased sales tremendously.Best Buy at the moment was facing poor leadership which led to the downfall in sales of the bigcompany. With time most of Best Buys international stores were closed down together withconsolidated stores under the Best Buy brand name. Companies such as Amazon which hadspecialized in ecommerce were already taking a big chunk of best buys annual sales generatingabout 31.8% of purchases in the electronic sales to consumers. Other companies such as Target,Walmart and eBay also were doing great in the ecommerce business. It became a nightmare forBest Buy to compete in a world in which shoppers could easily see competing prices and offers.3BEST BUYIn order to survive best buy needed to integrate changes in the system in order to stay competitivein the market.Among the challenges Best Buy was facing in the market was showrooming. Withchallengers like Amazon who offered lower prices in online stores made it difficult for best Buy.Customers visit Best Buy stores in order to test and view the products they are planning to buythen proceed online to shop for the product by choosing the best price between various onlineretailers hence the physical being left as a showroom used in only viewing the product. Best buyrevenue declined rapidly almost leading it to bankruptcy. Being a Brick-and-mortar store theoperational costs were a bit higher compared to the online retail stores.It was evident that at the current time physical stores had become reduced to merelyshowrooms for customers, Best buy was one of the culprits. Research according to statistics showsin the 2012 holiday season that 27% of the customers who visited the stores used their Smartphonesto research the best price for products they are viewing from cheaper online stores. The periodbetween 2008 and 2012 retail sales for online store increased by 42% with the retail foot trafficdropping to 28% in 2012.Amazon is the greatest beneficiary of online retail sales; it had incorporated a pricecomparison app thus customers can compare prices of similar products online while in a physicalstore. Consumer electronics were the largest hit by showrooming and by the year 2012approximately 37% of all customers in stores had already engaged in the practice of showrooming.Another challenge that faced best buy was entrance of new companies into the retailmarket. Opening of a physical store is easy as long as one possesses the capital necessary, a ware4BEST BUYhouse and a supply chain that is effective. Entering in the online market though is quite hard sincecustomers are always hesitant to share information public. Furthermore, competition from otherretailers is stiff making the market difficult to trespass. Best Buy being a physical store was findingit hard to enter the market and gain sales. Other new entrants into the market and online retailbusiness such as Amazon, Walmart, Target, eBay and others provided a hard time for the survivalof Best Buy. When it comes to “in-store” competition, Walmart & Target are Best Buy’s biggestcompetitors for electronics with the only difference being that these two stores have an upper handbecause they don’t just offer electronics at their locations, meaning if consumers are looking formore than just that during their trip, they can save time by attending one of these stores and gettingeverything they need from one location as to going to Best Buy that only offers electronics.While on the other hands, other companies such as Amazon and eBay can also be considerBest Buy’s competitors because they offer the same products and maybe even at a cheaper price.Although Best Buy does offer “Price Match”, both Amazon and eBay still provide their consumerswith the convenience of them never having to leave their homes to purchase their products alongwith providing them with many different sellers and prices.Bargaining power of both the supplier and consumers is also another factor that affectedBest Buy. Big suppliers of products such as Apple, Sony and Samsung saw it fit to set their ownretail stores. This meant that the suppliers no longer depended on retailers to sell their products.They interacted directly with the customers of the products. Customers on the other hand have ahigh bargaining power since they are price sensitive. Initially best Buy’s approach focused on saleof high end products where the prices of commodities were a little bit high compared to others.5BEST BUYWith the onset of online retail, cheaper prices for the same range of products brought about adecline in the sales of Best Buy tremendously.Price wars where completion on who is listing the lowest price for customers also led tothe decline in Growth of Best Buy. The companies focused in efficient delivery by cutting coststhus able to sell products at a cheaper price than others. At the onset of online retail business uptill today, customers had started the practice of showrooming in order to buy a product at the lowestprice offered.Best Buy needed to make a turnaround in order to combat the declining sales early.Technology was facing them out hence they had to adapt or be faced out. The initial response firstwas tailoring the barcodes used to curb the use by customers in the stores who scan them usingphones and compare with prices online. In 2012 Best Buy appointed a new CEO who revampedthings around the failing store. Finally, Best Buy started embracing its showroom status that hasbeen given to them and created the new value of “Low Price Guarantee”. Where a customer canstill purchase quality appliances and electronics. Now they positioned themselves to be that spacefor electronic experiments. The store decided to join in the price matching approach where initiallyit began price matching with physical stores. It was not until the 2012 holiday season that the bestbuy incorporated price matching in online stores too.The new CEO Hubert Joly employed an approach which is customer centric together withdigital marketing. Integrating these two made a transformation in the electronics retail business forBest Buy. Having an advantage of physical stores made it a plus for Best Buy in the joining of the6BEST BUYe-commerce market since these would act as physical stores. Joly laid out a blueprint that BestBuy was to follow in the road to economic recovery. With a multilayer strategic plan being setknown as Renew Blue. The strategies incorporation led to an increase in sales as compared to thetwo preceding years where the company sales had been on the decline. The Renew blue strategyfocused on improving customer experience when purchasing, working with various vendorsclosely, building a team of employees that is transformational, reduction in the administrative costsand the enhancement of the social welfare through recycling program.A Buy-Online-Pick-up in store option had already been integrated in the Best buy online platform.Joly led in the revamping of stores by making them pick up stores, and also the reengineering ofall the operations carried out by the store. Through this shipping of products was made easier andanother warehouse could facilitate shipping in case one ran out of stock. Joly also oversaw thetraining of employees in order revamp the customer experience. The employees were trained onnot just making sales but focusing on the customer needs. A happy customer is bound to returnlater.After entering the online retail market best Buy recognized it had a power that online storesdid not have that is the physical stores. They decided to leverage this in order to improve thecustomer delivery. From research around 70% of consumers in the US lived approximately 15minutes from a Best Buy store. This made it possible for the customer to view the product fromBest Bu…
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