Best Buy is a multinational retailer that deals with consumer electronics, entertainment software, home office products, and related appliance services. Best Buy was founded in 1966 as the Sound of Music, but it changed its name legally to Best Buy Co. in 1983 (Porter 47). The company offers retail service through different brand names, including Best Buy, Five Star, The Carphone Warehouse, and others. The paper will analyze the company SWOT Analysis.
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The SWOT Analysis
The strength of Best Buy as a company includes consistent operating performance. The division of both the client and Best Buy business drives the revenue growth of this company and improves the company efficiency (Schraeder 12). However, the company operating profit increased partially offset against the increase of expenses due to cost incurred on revenue related to entertainment software, consumer electronics, and appliance as well as home office products.
Best Buy Company’s financial position was strengthened on the market through its huge increase in net and operating profits in the past years. The company has managed to acquire knowledge of logistics and distribution of another wholesale business. This has boosted the company familiarity with the local market such as the Jewel in Chicago, Albertsons in the West Coast, and Shaw’s in New England. Furthermore, the company has managed to decentralize operating structure (Gitman and McDaniel 29). Best Buy Company has attained a wide portfolio of regional banners and store brands; hence, it is willing to tolerate multiple approaches and solutions. The company has the capabilities of the supply chain and is able to present itself nationally.
Best Buy Company’s weaknesses include integration of the retail system, undeveloped marketing expertise, no alignment of divisions; the company lacks shopper data for targeted marketing programs and local insight. The company’s operations and labor expertise are stored in short supply, which may hinder the future strategy of the company to generate revenue from online services.
The company enjoys the opportunities through acquisition of advantage of Albertsons, development of national banners. Besides, it enjoys efficiency through centralization of operations. The company can focus on high margin from other departments and retail business. Improvement of the user experience, reliability, and security has enabled the company to enjoy the advantage of reliable card data for customer insight. Best Buy Company can supply chain nationally.
The company is facing threat of high influence; it also has no system in place because it depends much on local management knowledge. Best Buy also faces the Supercenter competition from some companies, which include Wal-Mart on major markets. The company is threatened by loss of customers from some wholesale business. In addition, the company faces challenges when it centralizes its operation, such as standardization of stores.
The Key Areas That Need Improvement
However, bargaining power of suppliers has low impact on the company’s success, and the company should improve it because there is a minimal bargaining power within the industry. The suppliers who the company should negotiate with are few. In addition, the company has been facing different challenges such as the threat of new entrants. It has a low influence on the company’s success because new technology emerges constantly, and the competing companies embrace these new technologies to enable their success easily.
The industry rivalry had high impact to the company success because it had several factors affecting it. It includes diversity of competitors, price differentiation, concentration of competitors and product differentiation (Porter 47). In this industry, there are no clear edges and the most of the large companies perform several activities such as manufacturing operating systems, consulting, and producing software and hardware among others.
The targeted detractors and promoters include those companies in the same industry such as Wal-Mart and other big companies who compete together. Audience research will be done to make it possible to focus on activitty with a certain issue within a particular magazine as opposed to capturing of the highest-level views of activity on a webpage.
1. Best Buy Company should ensure it takes into account the expected fall in sales because of the contracting consumer change-spending pattern in the short term.
2. The company should have a target at internet discount retailers such Amazon.com and be able to compete with companies such Wal-Mart, which are the largest discount competitors.
3. The company should be able to increase service category, which contributes to the revenue mix commitment in order to supply mid- to high-end products.
The company should establish provision of a successful workplace literacy education in order to improve the skills of its employees and enhance a positive effect on different tasks in the workplace. Best Buy Company should ensure its program benefit, which could be intangible or tangible are measured through training programs of its supervisors, employees and managers and should consider their views. The company can conduct this through workplace survey (Christensen 148). The company can involve the government in any program that they have or even ask for funding, and this will enable it to have a good reputation. Having a cost effective publication will also overseas embracing of the products because they will be at an affordable rate. Best Buy should launch products on the online market.
The company’s financial position was strengthened on the market through its huge increase in net and operating profits of the past years lacks shopper data for targeted marketing programs and local insight. Best Buy also faces the Supercenter competition from some companies, which include Wal-Mart on major markets. On the other hand, the company enjoys the chances of developing national banners and efficiency through centralization of operations. Finally, the company should take into account the expected fall in sales due to frequent the contracting consumer change-spending pattern within a short term