Company Background
In an interview with James Wetherbe, Richard M. Schulze tells of how at eleven-years-old he became an entrepreneur in St. Paul, Minnesota as a paperboy. This newspaper boy would grow up to be founder of the world’s largest consumer electronics chain store, Best Buy Co. Inc. (Schulze, 2014). As an adult in 1966 Schulze partnered up with Gary Smoliak and opened the company called Sound of Music until 1986 (Bailey, 2015). Schulze bought out Smoliak around 1970 and by 1983 he had changed the name of the company to Best Buy Co., Inc. Four years later Best Buy Co., Inc. secures an entry on the New York Stock Exchange. During the early 1990’s Best Buy Co., Inc., had become the largest consumer electronics store in the United States.
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By 1999 the competition was growing, Amazon.com introduces a line of consumer electronics to their growing e-business. Best Buy Co., Inc., fights back during the early 2000 by purchasing Magnolia Hi-Fi. Best Buy Co., Inc., goes international when they bought Canada’s Future Shop in 2001. In 2002 Richard M. Schulze steps down as CEO and Vice-Chairman Brad Anderson takes over his position. Brad Anderson started as an employee with Best Buy in 1973. He had been serving as president and chief operating officer of Best Buy Co., Inc. since 1991. With roller coaster events and changing corporate officers throughout the years, as of 2012 to present day Hubert Joly presides as Chairman and Chief Executive Officer.
External
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In order to compete they would have to be able to price match their products and provide the wide array of consumer services like Best Buy. With over 1,700 stores in the U.S. this allows the consumer easy store access with product and employee interaction of which manifest the loyal returning consumer. These factors in combination would entail a vast amount of working capital from the start along with experienced employees and therefore detouring new
One of the biggest competitors is known as Wal-Mart. With a revenue of $485.651 billion, Wal-Mart is definitely the world’s largest company. According to Walmart’s website, “it operates over 11,000 retail units under 65 banners in 28 countries and employs 2.2 million associates around the world.” Offering numerous items at their lowest prices, Wal-Mart, itself, is the biggest challenger for Costco. At the same time, Sam’s Club is also owned and operated by Wal-Mart and it takes even more profits away from Costco. While the customers can go buy things at Wal-Mart without the membership, Wal-Mart uses the same membership-only strategy for Sam’s Club like Costco. For instance, Sam’s Club offers membership-only services with an annual fee of $45. Sam’s Club offers a wide product category, and it sells almost the same things as Costco. Sam’s Club has 652 warehouses, and its net sales are above $58 billion. Even though Costco is highly concentrated in California, Sam’s Club is evenly spread across the United States. Moreover, Sam’s Club is the only
After watching Charlie Rose’s interview with Jim Collins; where Collins explains his recent book How the Mighty Fall, presented me with an opportunity to reflect over recent companies that were staples in my childhood and early adult memories and now are non-existent. In this paper, I will look, analyze and relate Blockbuster Video and their history to Jim Collins’ five stages of an organization.
Best Buy operates in an oligopolistic market where there are significant barriers to entry and few large firms dominate the market by selling identical goods. Best Buy is a non-collusive oligopolist, existing in a strategic environment where firms do not cooperate, yet are interdependent due to the fact that a firm’s action affects the market. Recently, Best Buy experienced an increase in demand, increasing its revenues and profits.
The eighties prompted change as well as the opening of Best Buy’s first superstore. During 1983, a new corporate name was approved and the Sound of Music Company became known as Best Buy Co., Inc. With mounting consumer support Best Buy continued its road to expansion by opening an additional five stores. In 1985, the newly named company was being publicly traded under the symbol BBY. The late eighties brought forth additional change for the continuously growing company. Best Buy adopted a new concept in retail merchandising with the opening of massive superstores. The new concept shifted the placing of all inventory on the sales floor and hiring a specialized staff of non-commissioned service representatives (FAQ). Such adaptations have fueled the company into progression and continued to promote the company’s corporate vision of “Making life fun and easy”(Fact Sheet).
Best Buy’s History & Main Characters: Best Buy is Minneapolis-based and is North America's leading specialty retailer of consumer electronics, personal computers, entertainment software and appliances. Throughout Best Buy's 37-year history, the company has maintained the tradition of making life fun and easy for customers and employees, while providing a significant return to partners and investors. It has 80,000 employees and over 550 stores in the U.S., in addition to the brands Best Buy Canada, Future Shop and Magnolia Hi-Fi. Their leadership is led by Dick Schulze, Founder and Chairman, Brad Anderson, Vice Chairman and CEO, Al Lenzmeier, President and COO, and Darren Jackson, Executive Vice President of Finance and CFO. Chairman Dick Schulze founded Best Buy in 1966 with the Sound of Music, an audio component systems store in St. Paul, Minn. In 1973, Vice Chairman and CEO Brad Anderson joined Sound of Music as a salesperson. The company quickly expanded into video products and computers, was renamed Best Buy in 1983, and became a public company in 1985. Best Buy’s revenues for fiscal year 2003 were $20.9 billion and net earnings of $622 million. It was ranked number 91 on the Fortune 500 in 2003 (Bestbuy.com). Best Buy stores are redefining the way customers shop by offering an unparalleled assortment of affordable, easy-to-use entertainment and technology products and services available through its network of more than 550 retail stores in 48 states and online at BestBuy.com. Best Buy is scheduled to open 60 new stores in fiscal 2003 and is on track to have 650 stores by fiscal 2005. Magnolia Hi-Fi is a high-end electronics retailer specializing in audio and video solutions for homes, ...
Wal-Mart’s competitive environment is quite unique. Although Wal-Mart’s primary competition comes from general merchandise retailers, warehouse clubs and supermarket retailers also present competitive pressure. The discount retail industry is substantial in size and is constantly experiencing growth and change. The top competitors compete both nationally and internationally. There is extensive competition on pricing, location, store size, layout and environment, merchandise mix, technology and innovation, and overall image. The market is definitely characterized by economies of scale. Top retailers vertically integrate many functions, such as purchasing, manufacturing, advertising, and shipping. Large scale functions such as these give the top competitors a significant cost advantage over small-scale competition.
The company started to expand and by 1998 it enter European market by buying online retailers in the UK and Germany and changed their name to Amazon.co.uk and amazon.de. Two years later, it set up a French website amazon.fr.
Callistus, thank you for outlining the growth that Best Buy has achieved. Based on the information you’ve provided in your post, it’s noteworthy to mention additional data specified in Best Buy 10K report, and highlight critical success factors that this organization will be focusing on to maintain their competitive advantage. To your point, Best Buy has experience exponential consistent growth experiencing an increase in operating income for fiscal 2017 of 479 million which equates to 4.7% of their revenue, this was primarily due to an increase in gross profit rate and decrease in restructuring activity. Gross profit in 2016 increase by .9%, net income increase by 39.6% in 2016, and up 19.1% in fiscal 2017. Best Buy is in
The company started as an online book seller, which then rapidly expanded into music and movies, and finally into electronics and households.
Amazon has now grown to provide the biggest selection of CDs, Videos, books, DVDs, home furnishing, and almost anything one could want. The company went public in 1997 when it continued its increase its product lines
For every $100 spent at a locally owned business, $68 of that will stay local compared to $43 if spent at a “big box store”. Even though people believe that local businesses are not as beneficial as a big box store, buying locally not only benefits the business but also the community because buying locally builds a strong community and the money you spend at a local business gets put back into the community.
While most customers buy some items online the convenience of local stores, where they could access those items instantly, will continue to make Walmart’s customer base stronger. If Amazon is successful in building local stores, as well as engendering a higher percentage of use for their same-day delivery system, then it is possible for them to sustain their growth as well as expand. But, overall, due to Walmart’s gargantuan size it will be difficult for Amazon to succeed them in anything other than e-commerce.
Toys “R” Us was mainly focused about their competitors, Walmart and Target and had planned to lower operating costs, close underperforming stores, and sell off unneeded assets. No one could have expected that Amazon would become the world’s largest online retail outlet while providing essentially the lowest prices available to consumers. Toys “R” Us didn't have the equity or resources to move away from the brick-and-mortar retail, and create a strong online presence along with paying off accumulated debt. Experts argue that Toys “R” Us should’ve invested more capital into developing their ecommerce, but their deal in 2005 left the company with insufficient funds to pursue online sales. Canadian online retail is an exponentially growing market, “with a compound annual growth rate over the next 5 years almost five times higher than the tepid growth of brick and mortar sales across the nation”(A)The Forrester report, “predicts that sales will reach C$39.9 billion and represent 9.5% of total retail transactions in Canada by 2019”
Best Buy, one of the biggest consumer electronics retailers in the world, provides products from smartphone, computers to large electronic appliances. It aims at offering a large variety of products with outstanding customer service at a comparably economical price. Yet, it has been facing internal and external challenges in the recent years. Bottom line and the share price are slightly catching up after a fall in 2013 but still barely satisfying the shareholders and customers are changing their purchasing habits which may threaten its future.
Wal-Mart Stores, Inc. is a renowned retail goods superstore that sits atop the Fortune list at number one. It would be very difficult to find an individual who is unaware of Walmart’s position as the largest brick-and-mortar retail chain in the world. The company has thrived over the past few years and is continuing to grow by effectively managing its store operations and distribution strategies. One of the major contributors to the business consistently meeting market expectations is directly attributable to their management approach. Walmart has revolutionized the way retail companies manage their supply chains in more ways than one. But, perhaps the most revolutionary was the practice of unprecedented coordination with suppliers (Chekwa,