Case Study- Best buy

Strengths

Large number of consumers

            Best buy is the top electronic company in both USA as well as in Canada. Because of its best prices on its electronics products, it enjoys a large market share regarding consumer who uses their products

Large size and huge profit Margins

            Best buy has a large size and huge profit margin in almost all its financial years.  Hence, the company has the potential to spend money on advertising their new products to increase profitability.

Strong store for selling

            Best buy has a robust store for selling when compared to its competitors. Strong selling stores are important in meeting and exceeding the demands of its clients.

Best HDTV seller

            Best buy is always rated as the best HDTV seller by the Academy of digital television Gadgets.  This has been attributed to its effort of promoting digital TV in all its stores. The high rating is an important aspect that helps in marketing.

Weaknesses

Low gross margin

            The main weakness of Best buys its low gross margin when compared to its competitors. This weakness can make the competitors take up the opportunity and dominate the market. Low gross margin hinders its growth.

Dependence on local consumers

            Best buy mostly depend on companies local consumers who are basically from USA and Canada. This is a hindrance in tapping into new markets and increasing profitability.

Highly dependent on supplier credit

            A large portion of items in its stores is not paid for. Rather, manufacturers ship the goods to the stores and receive payments when goods are sold. If the stuff is not sold, Best Buy is forced to pay for it after a particular period.

Over-dependence on brick-and-mortar sites

            Best buy highly depend on brick-and-mortar locations even when time has impressed e-commerce.  This means that it has not invested in online clientele which stands as major selling platforms in the contemporary business. 

Best buy’s sustainable competitive advantage and its sustainability

            Best Buy has three distinct advantages regarding location, economies of scale as well as Geek Squad. Currently, it operates over 1,347 stores in the U S with a strong concentration in Power Centers.  Hence, it creates convenience for many populations to shop because their products are within consumer zones. Currently, Best Buy has over 23 distribution centers in the U.S. This provides flexibility to avert stock-outs in its stores and quick replenishing. With high fuel costs, this helps to track distances short between distribution center and associated stores. Its competitive advantage is also based on its service. This includes installation as well as advice, and this is where the Geek Squad surfaces.  The Geek Squad's services include support for networking, computer tune-ups, software installation, virus, and spyware removal as well as set-up, and printer assistance. Currently, Best Buy is strategizing to have more new Geek Squad agents for faster-growing of segments such as small business technical support.  Currently, Geek Squad sell 24/7 tech support plans to other small companies including data security, diagnostics, and repair as well as administration of servers. Best Buy’s competitive strategy also includes minimizing of store footprints to align square footage with floor traffic.

            When it comes to the questioning of sustainability of its competitive advantage, its competitive advantage is not sustainable.  The reason is that other specialty electronics retailers have gone out of the market with the fall of Tweeter as well as Circuit City. Other competitors have also come in the market with many stores in the US and also use online platforms. As a result, Best buy is forced to compete with discount retailers like Wal-Mart, Target, Costco and online retailers such as Amazon. Buyers will no longer be obliged to go to Best Buy to buy DVDs since they can have them from many online sellers or even stream suing Amazon or Netflix. Dominating only on local markets is also a hindrance to its competitive advantage. For instance, one can easily purchase a camera at a good discount using online platforms. Televisions swell as appliances are major products sold by Best Buy sells that many can less likely use online medium because of prohibitive shipping costs and sizes.

Strategic Recommendation

             If Best Buy desires to remain leading in electronics as well as electronics related accessories selling, it must focus on shoring up television as well as appliance dominance to facilitate sufficient foot traffic. Strategically, Best Buy can also address the issue of shopping for merchandise in its brick-and-mortar store and advance to online purchasing at considerable prices. Previously, Best Buy   provided only week training for its new hires. As a critical way to prevent show rooming, the company must provide ongoing training to its sales associates for them to provide customers with highly knowledgeable salespeople. Best Buy must also consider helping fight showrooming. Anti-showrooming lasers can be used to confuse handheld scanners. This includes apps installed on buyer’s’ smartphones such as Amazon Mobile. If this recommendation is implemented, best buy will strengthen its competitive advantage.

Sherry Roberts is the author of this paper. A senior editor at MeldaResearch.Com in nursing essay help USA if you need a similar paper you can place your order from custom college papers.