Best Buy Individual Project
Running head: BEST BUY INDIVIDUAL PROJECT 1
BEST BUY INDIVIDUAL PROJECT 3
Best Buy Individual Project
Best Buy Individual Project
Best Buy has been the dominant consumer electronics vendor for quite a long period of time. A company that had a humble beginning four decades ago has now grown into a big enterprise having more than 2600 stores in China and Europe and 1400 stores in the Northern America. In 2007, Best Buy experienced a huge lead within the market share in comparison to its competitors, consistent and large profits, healthy return of stocks and a worldwide extension strategy. In completing that deed, Best Buy toppled its largest competitors: CompUSA and Circuit City. As CompUSA moved out of the market temporarily in 2007 due the competitive challenges at that moment, the economic meltdown, and the following decline in consumer optional spending exacerbated the final leverage kicks of bringing down Circuit City at the fall of 2009.
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That permitted Best Buy to come forward as the apparent champion of the big format end user electronics retail sector:a rank that several considered prophetic of Best Buys future success. However, whether the competitors downfall is the outcome of Best Buys pre-eminence or basically, the unavoidable death of retail replica which is turning outdated is the scenario waiting to be viewed. While economic crisis might be blamed for partially for being the Best Buys fortunes reversal, most of the blame lies on the existence of new contenders within the industry comprising of the better varied Costco and Wal-Mart and extra go direct to the origin Apple stores together with the monstrous retail online: the Amazon.com. As a matter of fact, Amazons increase of stock prices is a close mirror picture of Best Buys decline of its stock prices.
Similarly, those new challengers have been getting more market share within the segment of consumer electronics while Best Buy has continued to lose it. Thus, Best Buy is facing fierce competition with the new entrants in that the competitors are reasonably dissimilar from Best Buy in terms of their focus, features, and structures which consumers find striking.
Best Buy should come up with strategies of persuading customers to purchase its products in order to get a bigger market share. The first strategy should be engaging in dramatic advertising. In this case, Best Buy should advertise its products in all sorts of media to make its existence and the products it is offering with their prices known. For example, Best Buy should do sales promotions in various countries and places extensively, sometimes even offering free samples to the customers for the purposes of wooing them. Similarly, Best Buy should use posters, television, radio, social media, and humble invitation of customers to its premises to increase consumers awareness of its existence. The other strategy that Best Buy should involve itself in is remarkable research. In this scenario, Best Buy ought to investigate the features that the customers look when buying various products.
Best Buy should also offer the best quality products frequently. In this case, Best Buy should inform its suppliers the required quality of items needed by consumers. The other strategy that should be used by Best Buy is ensuring a consistent supply and delivery of goods always. In this case, Best Buy should ensure that no customer visits its premises and goes back without having what he/she wanted to buy. Additionally, Best Buy should ensure that when agreements of delivery arise, it should comply with delivery schedules. It should also offer fair prices in comparison to its competitors.
The recent emergence of Wal-Mart, Costco, and Amazon in the consumer electronics market with exceptional features, structures, and focus has resulted in unexpected increase in competition pressures among the firms. Best Buy in this case, has become the casualty of all the new entrants dealings. As such, Best Buy has seen a huge reduction of sales in comparison to the past. On the other hand, the stock prices of Best Buy have also seen a continuous downward trend since the entry of the new competitors. Overall, now, Best Buy experiences fewer profits with fewer sales of its products.
Best Buys competition position means that it can beat or reach its competitors through implementing feasible strategies dramatically, otherwise it might risk closure. First, I would recommend that Best Buy should look for the advertising companies that reach as many people as possible in order to increase its existence and persuade them to buy its products. Besides advertising, Best Buy ought to thoroughly promote sales promotion where agents or employers visit various places with the products demonstrating to the consumers on their applications and their availability. In addition, Best Buy should conduct research on consumers view of its products. In this case, Best Buy should involve face to face communication with its customers and make conclusions about their opinion of the products. For example, if the consumers complain about high prices, Best Buy should investigate the competitors prices and consider offering lower or equivalent prices. The other implementation of my recommendations is ensuring that consumers, who get a product out of stock, get it as soon as it arrives at the premises. In this case, such customers should be asked to leave behind their contacts so that they get informed once the product becomes available. Importantly, if it is possible to deliver the product at the customers door at certain terms and conditions, Best Buy should consider delivering it as soon as possible after its arrival.
Due to surmountable competition that has negatively affected the Best Buy, the company should look for a merger with Amazon.com. An amalgamation would be necessary as the synergies of the two companies would bring about a greater increase in sales. It would be attributed by the fact that Amazon.com concentrates more on selling its products online and delivery services worldwide. Actually, the bringing together of both companies employees minds would bring new strategies necessary for increasing the market share and ensuring progress and survival in the competitive market.
The competition that existed between Best Buy, CompUSA, and Circuit and partially economic crisis contributed to the fall of both CompUSA and Circuit. The emergence of Wal-Mart, Costco, and Amazon.com has brought new competition that is likely to topple Best Buy. The new entrants have come up with creative measures that are necessary for attracting and retaining customers. As such, they have been able to win their new customers and rob majority of the Best Buy customers, thus contributing to the companys poor record of sales. In this case, for Best Buy to survive in the market, it requires at all costs, merging with one of its competitors with little trouble. As such, since Amazon, sells most of its products online, it would be wise and possible to merge with Best Buy to have both online market and usual physical market for the two companies products. In the long-run, the merged companies would enjoy sustained growth with less effort.
For Best Buy and Amazon.com to merge, they should comply with the current Amalgamation Companies Act. The Amazon.com should keep the merged companys name as it is more popular than Best Buy. The merged companies staff should work together as a team in order to achieve the new goals. As the two companies own the headquarters buildings, the new headquarter should be stationed at Best Buys headquarters as the offices are big enough. The pooled resources should be used to conduct more market research and do extra advertising for the benefit of the merged companies.