The Secret of Success of Best Buy Inc. and Their Strategies

Best Buy Inc., is one of the largest electronic retailers in the US. Best Buy Inc. has been so successful with competitors over the years because the company makes sure to distinguish itself by deploying a differentiation strategy rather than a low price strategy. Best Buy was originally known as Sound of Music Inc. in 1966. The company first started off as a retailer for video products in the 80s. Finally in 1983, the company decided to change its name to Best Buy Co. Inc. To remain successful Best Buy has also invested in the training of sales professionals so they can better understand the products they are selling to the consumers. Since Best Buy trains their employees so well with knowledge of products they provide, this makes the customer service at Best Buy exceptional.

In this case study the real question is if Best Buy Inc., is a sustainable customer centricity model. After reading the analysis about how the company treats their employees, customers, and the other competition they have I believe that Best Buy is a perfect model for customer success. Ove the year’s Best Buy has tried to remain on top by providing exceptional products and services to the customers. In order to better serve customers in 2002, Best Buy decided to acquire Geek Squad. Geek Squad was a service provider to help customers with any computer issues they may have. The convenience of Geek Squad was they actually come to the customer’s house, instead of having the customer bring in their device to the store. This is just another reason why Best Buy Inc., provides more customer service than other competitors in the electronic sale industry.

Financially Best Buy Inc. has operating margins that have been declining. Although this could be a function due to increased costs, it’s more likely due to pricing pressure. Best Buy’s long term debt increased by a large amount from 2008 to 2009. The reason why this happened was probably because of the acquisition of Napster and Best Buy. It is important for Best Buy to remain competitive in this economy because Walmart is one of their biggest competitors. Another competitor for Best Buy, having to do with games and video accessories would be Game Stop. In more recent times, Walmart has also inquired the use of cell phones and laptop computers. Even though the selection at Best Buy with laptops, computers, and TVs is better, customers at times think that Walmart has better prices. Another competitor with Best Buy is Amazon.com. Amazon is one of the largest online retailers in our country and seems to be expanding all the time. Amazon has an advantage over Best Buy because it is able to maintain a lower cost structure, which in the end attracts more customers.

It is key for Best Buy to keep their customers interested in the years to come. In order to increase sales, many retailers have decided to offer private label credit cards to offer their customers promotional financing. This can help boost the business of the company because people will be interested in saving money for the big purchases they make.

Overall Best Buy is a company looking to provide exceptional services to their customers. It is important for the company to remain on top of the competitors, especially since online retailers have been becoming more popular and convenient over the past years. Over the past few years, it seems that Best Buy Inc. has sustained more long term debt than actual cash flow. If the company doesn’t make some changes in either marketing, pricing strategies, or products offered to consumers in the future this could really hurt the company. It is important that the company stays on top of the products and services they offer, and try to stay one step ahead of the competitors. If for some reason Best Buy Inc., isn’t able to remain on top, this could be the end of the company within the next ten to fifteen years. It will be interesting what happens as time goes on, but hopefully Best Buy can remain in the top retailers for electronics and appliances.