Best Buy Essay

1. Problem identification:

The main problem Best Buy currently facing is falling stock prices. In short period of time from year 2011 to 2012 the price per stock went from $45 to $15. This was a drop of approximately 60% but not only the stock prices were going down but also Best Buy had been forced to report a 91% drop in profits in year 2011. Investors were worried about the situation of the company. Now, the main challenge in front of the Best Buy was to find a way to get out of this trap and make some profits so that stock prices goes up and investors are satisfied with the company. Personally, another major problem I think is Best Buy is not able to convert customer’s store visit into sales. Currently, only 1.3% of visited customer made sales at Best Buy.

2. Internal Analysis:

Strengths: Best Buy was well established brand in US consumer electronics market with 14% of market share. Best Buy has a big advantage of Big-Box stores around the World. These stores allowed customers to have a hands on experience before making any purchases. Specially, services like geek squad gave Best Buy a solid competitive advantage which was later on copied by other competitors like Target. Different platforms like mobile stores, kiosks and online website also

These employees can go to competitors and make them stronger. All of the training and experience these employees had could be used against Best Buy in near future. Another strategic threat to Best Buy is getting stuck in middle if company tries to achieve both cost leadership and differentiation at this point of time. Also the growth pattern of Best Buy is mostly through the acquisition of the old companies in the industry. This can be dangerous step because Best Buy spent lot of money in acquisition in short amount of time. This can be expensive affair if these acquisitions don’t help to increase the revenues and profits in