Best Buy's Misadventure in the Middle Kingdom
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Case Code: BSTR402 Case Length: 15 Pages Period: 2010-2011 Pub Date: 2012 Teaching Note: Not Available |
Price: Rs.300 Organization: Best Buy Inc. Industry: Electronics Retail Countries: China Themes: Globalization, International Business |
Abstract Case Intro 1 Case Intro 2 Excerpts
Bye Bye...Best Buy
In February 2011, US-based Best Buy Inc. (Best Buy), the largest electronics retailer in North America, announced that it would close down its stores in China, along with its country headquarters in Shanghai. The move came as a surprise, as Best Buy had spent considerable time studying and understanding the market before opening its first flagship store in China. Analysts said Best Buy's decision to close its stores down once again showed that foreign retailers were finding the going tough in China, and were not able to face the competition from the local players.
Best Buy's Chinese sojourn began in 2003, when it opened a sourcing office in Shanghai.
While Best Buy sourced products from China, it also studied the local market, planning its pre-entry strategies to enter one of the most lucrative and robust markets in the world. In 2006, Best Buy acquired a majority stake in the then fourth largest electronics retailer in China, Jinangsu Five Star Appliance Co. (Five Star), which operated through more than 130 stores across the country. The first Best Buy store was opened in 2006 in Shanghai. Best Buy's first store received a positive response and went on to become one of the top ten revenue generators for the company...
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