Renew Blue: Best Buy's Winning Strategy

Renew Blue: Best Buy's Winning Strategy
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: -
Renew Blue: Best Buy's Winning Strategy
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

Best Buy, the largest electronic retailer in US as of 2013, was founded as an audio specialty company Sound of Music in 1966 by Richard Schulze and Gary Smoliak. In 1983, the company's name was changed to ‘Best Buy'. It was the first electronics retailer to establish a superstore. Best Buy began its e-commerce retail business by launching bestbuy.com in 2000.

Due to rapidly changing technology, the interest of customers in purchasing huge TVs, PCs, and CDs had started to wane and interest in high-end gadgets like mobiles, tablets, etc was on the rise. To make matters worse, the US was hit by recession and customers were looking for low prices, which online retailers were able to provide. It was at this time that Brian Dunn became the CEO of Best Buy.

He came out with a strategy called 'connected world', where the stores were remodeled and the latest electronic gadgets were displayed at the stores. These stores had knowledgeable sales staff to assist the customers. The initiative had a positive impact on the company. But in the next few quarters, sales and comparable sales started to decline and Best Buy began facing competition from retailers like Wal-Mart and H H Greg. It became a victim of “showrooming”, where customers visited the stores to see the products, compared the prices online, and bought from whichever retailer was offering the lowest price. In early 2011, Best Buy's market share dropped to 22%.

Issues

  • Impact of recession on electronics retail
  • The changing dynamics of retail industry in the US
  • Growing importance of online retailers
  • Pros and cons of technology in retail business
  • Strategies to be followed during recession
  • Challenges a market leader can face
  • Turnaround strategy

Contents

Keywords

Best Buy Inc, Electronics retailer, US, Comparative store sales (COMPS), Brian Dunn, Hubert Joly, Richard Schulze, Bestbuy.com, E-commerce, Renew blue, Five-pronged strategy, Connected stores, Restructuring plan, Customer service

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