Renew Blue: Best Buy's Winning Strategy
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Case Code: BSTR444 Case Length: 14 Pages Period: - Pub Date: 2013 Teaching Note: Available |
Price: Rs.400 Organization: Best Buy Co., Inc Industry: Electronic Retail Countries: USA Themes: - |
Abstract Case Intro 1 Case Intro 2 Excerpts
About Best Buy
The origins of Best Buy can be traced back to 1966 when Richard Schulze (Schulze) and Gary Smoliak (Smoliak) started an audio specialty store, 'Sound of Music' at St. Paul, Minnesota. By 1969, the company had three stores and it went public. In 1970, the company's revenue reached $1 million. In 1983, the name of the company was changed to Best Buy. Its first superstore was established at Burnsville, Minnesota. It was huge in size and had a wide product line-up including consumer appliances and video equipment. It was listed on the New York Stock Exchange in 1987.
In the early 1990s, it entered the Chicago, Philadelphia, and Boston markets. It became the second largest consumer electronic retailer and the largest seller of personal computers (PCs) in the US by 1993. Best Buy marked its entry into e-commerce with the launch of bestbuy.com in 2000. In the same year, it acquired Magnolia Hi-Fi, a specialty consumer electronics retailer.
Best Buy posted sales of US$ 15.3 billion in 2001. To widen its presence in the music world, it acquired Musicland Stores Corp , retailer of CDs, for US$685 million. In 2002, Best Buy’s first international store was established in Toronto, Canada.
Schulze retired in 2002 amidst declining COMPS, a fall in both the sales of PCs and the demand for CDs and increasing competition. He was succeeded by Brad Anderson (Anderson). In October 2002, Best Buy acquired Minneapolis-based Geek Squad, a startup that specialized in repairing and installing PCs. The acquisition was made in order to differentiate Best Buy from its competitors, which did not provide such services. Geek Squad became a part of all the Best Buy stores, and turned out to be one of the most successful businesses of the company...
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