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
Quest to Regain Lost Glory
The largest electronics retailer in the US, Best Buy Inc. (Best Buy), posted a net loss of US$ 1.23 billion on revenue of US$ 50.7 billion for the year ending March 03, 2012. It was the company's first loss since 1991. A continuous decline in the retailer’s performance over the years and slipping comparable same store-sales (COMPS) had an adverse impact on the company's stock as well. Analysts attributed the decline to 'showrooming', where consumers used Best Buy stores to check the products before buying them online or from competitors at a lower price. With the second largest electronics retailer in the US, Circuit City Stores Inc, (Circuit City) filing for bankruptcy in 2008 due to continuous losses for several quarters, analysts were left wondering if Best Buy would meet with a similar fate. According to Walter Loeb, from Forbes, "As I look back to Circuit City’s demise, I have to wonder if Best Buy can survive in its present form."
The CEO of Best Buy, Brian Dunn (Dunn), resigned in April 2012 in light of the company's poor performance and other allegations pertaining to his personal conduct. The board immediately formed a four-member search committee to select a new CEO. Meanwhile, the board appointed Mike Mikan (Mikan) as interim CEO.
Best Buy continued its downward plunge, and for the quarter ending August 04, 2012 , its net earnings decreased by 91% to US$ 12 million as against US$ 128 million in the second quarter of the previous year.....
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