Beat Buy Company is the largest retail company, originated in United States. It was established in 1966 with the name “Sound of Music” and because of some natural disasters it renamed to “Best Buy Company” in 1983.
“The company opened its first store in 1966, and called it “Sound of Music”. After a tornado hit one of its stores in Roseville, MN, it held a “tornado sale”, and later reopened in 1983 under a new corporate name, Best Buy.” (Matthew Kemp)
The company is dealing in electronic items i.e. Entertainment software, Office products and other electronic products. It’s capturing a big market share in the financial world. From 1983 the company is operating in United States as well as in Canada. In last few years they expanded their business and made it globalize through launching it in the market of China. With the passage of time as the Market grew, the profits of the company have also been accelerated.
“Best Buy has seen large increases in revenues over the past few years because of the demand for flat-panel TVs. Revenue increased 12.45% overall in fiscal 2006 and 16.49% overall in fiscal 2007. It is unlikely that these margins will continue due to slowed demand and decreased prices for the TVs.” (Matthew Kemp)
The research shows that the company have more potential to increase its revenue in the future and it will keep hold the largest market share as well.
There are few factors which can effect the company i.e economic forces, social forces, cultural and environmental forces, Political, legal and governmental forces, technological forces, and competitive forces. These forces are important to evaluate the company.
There always been ups and downs in the economy. Either there is inflation or deflation. If the GNP is higher in the economy the income also increases and people can spend their incomes on different items. From last few years US is enjoying healthy economy. That factor is helping the retail industry as well. In future Best buy company profit may increase by as the trend shows.
“Increasing GDP would be good for companies like Best Buy; however the smaller increases in GDP can have a negative effect on not only Best Buy’s sales, but Best Buy’s stock price if investors predict that GDP will fall in the future.” (Matthew Kemp).
Best Buy Company is also socially committed and believes in literate people about technology. They are socially responsible. The company spent $13 million in teach Awards for the school to aware them from the new technologies about the classrooms. They also gave scholarships to the students all over the world.
“Best Buy stores have awarded over $13 million in scholarships to nearly 11,000 students nationwide”.
In this modern world, where every day new technologies are coming up and frequently they are becoming outdated. Under this scenario, the Best buy company has to keep itself up to date and must have to keep watch on the new technologies. In this way the company can survive under intense competition.
Wisconsin State Attorney General’s office took a serious civil action against Best Buy Company In 2005. They stated that the company is violating the consumer protection law by misleading the people about service plans, supplemental magazine subscriptions etc.
Where the company is enjoying healthy profits, there the company is also facing intense competition. The biggest competitors of Best Buy Company are Dell, Wal-Mart, Circuit City and all those retailers which are supplying those products on reasonable prices. The company should also bring some changes in their business to stay in the top line. Like, they should also offer their products online as other companies are doing.
“To help overcome online competitors, Best Buy allows consumers to purchase their items online. Consumers then have an option of having the product shipped to their home or picking it up at a local Best Buy store.” (Matthew Kemp)
The internal forces include Marketing and Management of the company.
The company is spending a greater amount on the marketing expanses of the company. They spend millions of dollars on their website to provide people with all the information about their business and description about each and every product they are dealing with. Mostly they do business-to-business marketing for their business. They also mailed thousands of copies to their target market, with the catalog attached to it. With the changing trend, the company is also planning to open inbound as well as outbound call center.
“In October the company plans to mail a second catalog for larger businesses. The catalog will sell computers, cables, and accessories as well as a smattering of consumer electronics. To help in its efforts in bagging big businesses, Best Buy is setting up a call center for inbound and outbound calls.”
SWOT analysis will help to examine the condition of the company from internal as well as external.
The Best Buy is the specialized retailer store in the US and Canada dealing with electronic items. The company is enjoying the leadership in the market because of its highest share. It is one of the leading companies in States with total market share of 18%. Because of its large operation, the company is able to capture the market and supply the products on spirited prices.
“Best Buy leads the consumer electronics retail market in the US and Canada, with total revenues reaching $27,380 million in fiscal 2006. It has about 18% market share of the consumer electronics retail market the US. Leveraging its large scale of operations, the company has been able to increase its bargaining power with consumer electronics vendors and offer more competitive prices.”
The company is capable of performing strong operations during last few years. It revenues increase by 15.2%. This figure is much more then the average rate in the same fiscal year. The company has shown that the company is efficient enough to capture the large share of the market.
“Its operating margin of 5.3% in fiscal 2006 compares well with the industry average of 4.7% for the same period. Strong operating performance implies that not only was the company able to increase its market share but also its operational efficiency.” (DataMonitor 2006)
The revenue which is continuously generating by the Best buy’s are only from one sector i.e. from flat panel TV’s. It is the biggest weakness for the company. The company should not rely on one product. If the product is hotcake today, it can be outdated tomorrow. Then it will harm the company as well as its revenues.
The emerging trend of electronic items in the market is an opportunity for the Best Buy Company to accelerate their profits by offering them.
“Such as new computer technology like Windows Vista which can drive computer or software sales, or the release of Apple’s iPhone. The immense popularity of the Nintendo Wii may also drive up sales of consumer electronics as well as entertainment software” (DataMonitor 2006)
Best Buy Company has an opportunity to expand their business globally. As electronic items have a big consumer market, so there is also a chance of gaining more profits inside the other countries. Recently Best buy company opened there outlet in China. And it attracted a large number of buyers.
“Best Buy already opened a store in China in December, which reportedly exceeded sales expectations by 40%, and on January 1st attracted more than 20,000 customers.” (Matthew Kemp)
Electronic items are mostly luxurious items. The consumer mostly buys these items when his/her income is high. And high income is depended on good economy. If the income of a person falls then he will definitely go for the basic items not for these secondary items. So at this point the company can lose the profits.
If you need custom essay, research paper, thesis or term paper on Business or Economics – feel free to contact our professional custom writing service.
0.00 avg. rating (0% score) - 0 votes
Tags: best buy company, business essays, custom essay, economics essays, example essay, sample essay, sound of music
Organizational Structure of Best Buy
Best Buy is a multinational retailer electronics company. It was founded by Richard M. Shuzle in 1966, and was known as The Sound of Music, which was just a small radio shop. The shop grew rapidly as in 1970 it made annual sales exceeding a million US dollars. Later the founder changed the shop’s name to Best Buy and put goods on the counter for the customer to easily access all goods. Since then, Best Buy grew to be the leading electronics retailer in the US and even ventured in other continents. It has around 180000 employees in over 2000 separate locations.
Best Buy deals with products ranging from home appliances, to computers and many personal electronics. The store has some sub-organizations, the main being Geek Squad, Best Buy Mobile and the general Best Buy company. Geek Squad deals purely with computers and computer-support task force while Best Buy Mobile deals with mobile phones and the main store; Best Buy Company retails all kinds of electronics. This company is more of a traditional functional organization since employees are divided according to their function and sent to their respective departments and sub-organization. Geek Squad staff do not deal with mobile phones or refrigerators at any point, and neither do their staff. They have specialized duties.
In this company, information moves from top to bottom. The CEO heads Best Buy Company. The CEO passes information to the Company Executives. At this point, the company splits up to its three main sub-organizations. Each sub-organization has its own management. The senior most management level is the Corporate Staff who connect top level management to the down level management. The Corporate Staff gives information to Regional Managers. Best Buy has over 40 regions, and each region is made up of districts. Each district has its District Management that answers directly to the Regional Managers. Each district is comprised of around twenty stores. The stores are headed by General Managers who have their assistants. In each store, there are departments. Every department has its supervisor who answers to the General Manager. Staff in different departments have specialized jobs to do.
Communication in the company is like of a small company, from the CEO to the other staff. Communication is through an Employee News Feed, where base level employees get to acquire information from the corporate level employees. The company also uses an email system for communication between employees and management at all levels. All staff at all levels work under rules so as to fulfill their duties accordingly. In Best Buy stores, there are a list of objectives and goals of the company that the employees have to achieve.
Best Buy Company has a good structure though it has its drawbacks especially when it comes to communication since base level employees only receive information but do not send any. There are also political problems in the company, but even with the drawbacks, it has managed to come on top of the list. The structure has held the multinational in place up to date.
Student help resources
Need help with term paper or research paper? Visit My Paper Writer and hire a paper writer online.
Need help with essay? Order custom essay at https://www.vivaessays.com/ - expert essay writing service.