Richard Schulze and Gary Smoliak established the company that would later become Best Buy in 1966 under Sound of Music, which was initially a single music store. The shop specialized in selling high-end audio equipment and was located in St. Paul, Minnesota, in the United States. In 1983, the company changed its concentration from selling music equipment to consumer electronics, changing its name to Best Buy.
Domestic and international operations comprise the two primary divisions that comprise the organization’s corporate structure. Within the borders of the United States, the Domestic division manages physical retail locations and online platforms.
Best Buy Marketing Strategy
One of the four pillars of Best Buy’s marketing strategy is price. Customers may save money and enjoy life more thanks to Best Buy’s always cheap prices. For newly released items, the company matches the prices of key local and online competitors such as Amazon.com, Crutchfield.com, Dell.com, HP.com, and TigerDirect.com. Only a small percentage of customers are eligible for the company’s Price Grantee offer, and it does not apply to clearance, refurbished, or open-box items.
More than a thousand Best Buy stores can be found throughout America and Canada. Each spot was picked because of its convenient proximity to a populated city. Products are shipped to clients by UPS, FedEx, and the US Postal Service. It also uses in-house personnel and third-party home delivery services in certain places.
Products and services from Best Buy can also be purchased on their website. Its website is designed with the user in mind. Regardless of a phenomenon’s good, unsatisfied customers must still expect negative feedback. Criticism against the company’s site is problems including order cancellation, slow loading times, and account hijacking.
Best Buy’s promotional efforts round out the company’s four marketing strategies. Best Buy airs commercials on television and the internet. Also, it does a great job representing itself on social media. It also gives funding to philanthropic groups, academic institutions, and public libraries.
Best Buy’s Business Strategy
Best Buy went from being a humble music store to becoming the largest retailer of consumer electronics in the world, having outlets throughout North America (the United States, Canada, and Mexico). The goal of the company is mainly to fulfill the ever-evolving requirements of its clientele by delivering an extensive selection of electronic goods and services.
The company’s strategy towards achieving its goal is the satisfaction of customers, innovation, expansion, and environmental responsibility.
Customer-centered services
The focus on customers is one of the primary business strategies of Best Buy. The needs of the consumer are prioritized in all aspects of the business. Best Buy personnel receive training to ensure that consumers have a positive experience from the moment they enter the Best Buy location till the completion of the transaction.
For instance, Best Buy introduced a “store within a store” idea, which enables customers to explore a variety of brands and items without having to leave the store they are currently in. Customers will have an easier time finding what they are looking for, and the overall shopping experience will be more seamless.
Best Buy provides its customers with a variety of services, one of which is the Geek Squad, a technical support service that assists consumers with the electrical equipment they have purchased.
Innovation
Another area that Best Buy places a strong emphasis on is innovation. The organization is always looking for fresh and original approaches to increase the quality of its goods and services. Best Buy makes significant investments in research and development to maintain its lead over competitors and provide its consumers with access to the most recent technological advancements.
Best Buy, for instance, has instituted a price-matching policy, which enables customers to check prices offered by other stores and acquire the best available product after a price comparison.
Additionally, the company has introduced a variety of cutting-edge goods, such as the Insignia Connected Speakers. These speakers use voice recognition technology to allow the user to manage music and other home automation devices.
Growth
The expansion of the business, is one of the primary focuses of Best Buy’s strategic plan. The expansion of the company’s market share and the growth of its revenue are both priorities for the business.
Best Buy is constantly on the lookout for new possibilities to expand its business, whether those opportunities come in the form of strategic alliances, acquisitions, or the introduction of brand-new products. For instance, in 2018, Best Buy purchased GreatCall, a company that specializes in providing older adults with health and safety products. Because of this acquisition, Best Buy was able to enter the rapidly expanding health and wellness market.
Best Buy also entered into a partnership with Carphone Warehouse, opening stores in China in 2008 as part of its strategy to develop its business operations on a global scale. Additionally, in order to appeal to a larger consumer base, the company introduced new product lines, some of which include home automation devices and smart home technology, as they aim to appeal to a more diverse consumers.
Sustainability
The promotion of environmentally friendly business practices is one of the primary goals of Best Buy. The organization is dedicated to lowering its overall impact on the environment and promotes environmentally responsible business practices.
Recycling programs, energy-efficient stores, and an overall reduction in the company’s carbon footprint are just some of the environmental efforts that Best Buy has put into action. For instance, Best Buy allows its customers to participate in a recycling program by bringing in their outdated electronic devices for proper disposal.
Additionally, the company runs energy-efficient retail locations that make use of alternative and renewable forms of power and take steps to reduce overall energy consumption.
Financial Performance of Best Buy
Although the increasing competition from online shops caused Best Buy to experience some financial difficulties. However, the company has been able to weather these storms thanks to its customer-focused approach and unique product offerings.
The sales of the corporation increased by 1.8% as compared to the previous fiscal year, reaching a total of $47.9 billion in the current fiscal year 2020. The company’s net income also climbed, reaching $1.5 billion as compared to the previous year’s figure of $1.1 billion, which is a significant gain.
The ability of the company to adjust and improve in response to the shifting requirements of its clientele is directly responsible for the expansion of the business’s revenue. The corporation has been successful in increasing sales by enacting a number of strategic measures, such as its price-matching policy. The rise of the company’s revenue has also been helped along by its expansion into overseas markets.
Best Buy’s Competitiveness
Best Buy is one of several stores competing for customers’ attention, including Amazon, Walmart, and Target. In recent years, the corporation has been confronted with a growing threat from online retailers that provide competitive pricing with traditional stores.
The company has developed several strategic initiatives, such as price-matching rules and the “store within a store” idea, to maintain its position at the forefront of the competitive industry. The company has also made significant investments in its internet presence, providing clients with the ease of purchasing online and receiving their purchases promptly.
In addition, Best Buy has broadened its product selection to include various items that are now in high demand. Examples of these items are household amenities and items related to health and wellness.
Responsibility of Businesses Towards Society
Through its various efforts in the area of corporate social responsibility, Best Buy is dedicated to giving back to the community. The organization is committed to improving the quality of life in the neighborhoods it works in through the implementation of a number of initiatives and projects.
The Community Grants Program of the corporation provides financial support to non-profit groups that are working to better the lives of adolescents. This program is done through the use of technology, education, and preparation for future careers.
In addition, Best Buy’s Teen Tech Centers offer a place for adolescents living in impoverished neighborhoods to explore various forms of technology, obtain mentoring, and build skills that will be beneficial to them in the future.
Conclusion
The primary goal of Best Buy is to fulfill the ever-evolving requirements of its clientele by delivering an extensive selection of electronic goods and services. The priorities of the company are to put the consumer first, innovate constantly, expand, and remain environmentally responsible.
Because it places such a strong emphasis on these fundamental facets of its business, Best Buy is in a strong position to continue its run of success and to keep its place among the most successful electronics retailers. Best Buy has been effective in achieving this business purpose, and the company continues to be a prominent player in the electronics retail market by focusing on the needs of its customers and working hard to maintain its position as an innovative, sustainable, and financially successful firm.