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Importance of retailing to the economy
Importance of retailing to the economy
Importance of retailing to the economy
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1. Retail Sector a) Category specialists, or sometimes referred to as “category killers”, are big-box stores that offer a complete assortment of products within a certain category or specialty. In early America only the general store existed, in which customers visited to purchase all their essential living items. As times started to change entrepreneurs looked to gain a competitive advantage by introducing specialty stores that offered a wide variety of goods in a specific category of products. Specialty stores boomed throughout urban America in product categories such as furniture, apparel, and electronics. It wasn’t until the late seventies and early eighties till we started to see the first big-box supercenters emerge from these smaller specialty stores. During this time companies such as Wal-Mart, JC Penny, and Sears expanded into this new category of stores that is referred to as the “category Killers.” Today, category killers have evolved into massive retail stores that dominate specific merchandise categories, and as a result put many specialty stores out of business. b) The primary environmental factors that affect category specialist sector include technological, economic, and demographic factors. First, technology can impact a market by helping firms find new and efficient ways of conducting business activities. A change in technology can open the door for new entrants to enter the market, as well as present new advantages among competition. Second, some retailers are affected by economic factors more than other retailers. Being able to build big-box stores with a deep assortment of merchandise as well as knowledgeable employees is a luxury that only some firms can afford. Consequently, these more su... ... middle of paper ... ...kets. Globalization continues to be a major opportunity for big-box retailer that should be considered. Best Buy can learn from Walmart’s use of its supply chain management as well as its globalization strategy to achieve a greater share of wallet. Global markets provide a unique opportunity, especially in the electronic market, to grow brand awareness. Like Walmart, Best Buy can find ways to enter foreign markets and achieve greater economies of scale. Consequently, Walmart can learn a lot from how Best Buy provides customers with not just a deep assortment of products, but with great customer service and tech support. The Geek Squad service is something Walmart should look to establish in order to achieve better customer satisfaction. If there is one thing that Walmart can learn from Best Buy, its how to implement better customer relationship management.
Levy, Michael, Barton A. Weitz, and Dhruv Grewal. Retailing Management. ed. New York, NY: McGraw-Hill Education, 2014. Print.
BestBuy really needs to know the expectations of consumers to be able to align on the same distribution line than its competitors that continue to cut its market shares by offering the same products at very competitive prices. There is no doubt about the threat that may represent specially Wal-Mart for BestBuy, its "Every day low price" slogan speaks for itself. Today, quality’s problem is used as a marketing argument, but it’s not over true even though Walmart some low quality products. We have to notice that most of the producers of nowadays ’technologies are Asian countries as proof, IPhone and well-known brands technologies have always been manufactured in China. So the quality problem is not really the problem BestBuy is facing because there is no doubt that Wal-Mart and BestBuy have the same suppliers since everyone claims to offer high quality electronics. The first thing to do is to figure out how Walmart makes the difference by lowing its fixed and variables costs to better maximize profit even though offering low cost product. I think BestBuy needs to review its employees ‘training budget since they already have a good knowledge about the product they offer. As cited on page 22-4, even though its revenue grow, at the same time its net income and operating
• Since customers enjoy low prices, and value and effective and friendly customer service. Wal-Mart should offer training and programs to its employees such as the “Putting People First”(British Airways) in order to reinforce and improve their effective customer service.
High-end and niche merchandise: With rising disposable incomes the demand for high-end goods in increasing, which can best be catered by specialty retail stores. Large players can offer competitive prices as they buy in bulk. Smaller players can differentiate themselves by offering niche products and superior customer delight at a premium price.
With the passion for the latest and greatest technological knowledge, and the charisma and devotion towards the youth, Best Buy is sure to continue on the high road to success. Best Buy will be changing and advancing to accommodate the ever-changing field of technology. They are truly a testament to upholding and exceeding their vision statement of “meeting the customer at the intersection of technology and life” (FAQ).
Due to the convenience and numerous locations of stores, the service of the walmart.com results in an attractiveness to customers, and a way for Walmart to eventually bring more customers to its stores and increase their purchases.
As revealed by the SWOT analysis earlier Kmart has potential to pull itself out of its current position of facing closure. In order to exploit opportunities and counter threats Kmart needs to build on these competencies to strengthen its position and counter internal weaknesses against the single largest industry threat - increased competition in a mature market.
When Best Buy, the leading American consumer electronics retailer planned to expand its operations outside the United States in December 2000, they earmarked Canada as the first foreign country for its international expansion strategy. The choice was mainly driven by the fact that Canada was its closest neighbor with a retail market that was largely similar to the domestic United States market, which Best Buy had already dominated. The Canadian consumer electronic retail market was largely fragmented, with the dominant force being future shop which had 15% of the market share. The original expansion strategy for Best Buy was to enter the Canadian market and directly compete with future shop as well as the other market players for a piece of the market share.
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.
The opposing side believe that local businesses are suffering due to “big box stores” and not being able to give as big of discounts or have as big of a selection of products. “People say, ‘Well, you lost your little stores,’ and that’s true. But it’s money-driven...if its $5 cheaper at one of the larger stores, we take advantage of it. I guess that’s human nature.” Carl R. Baldus Jr.
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, ...
By the 1980s, just before the rise of Wal-Mart, Kmart had become complacent. It believed it would be the king of discount retailing, now and forever. It didn't perform an accurate SWOT analysis, but to be fair, who could have seen the rise of Wal-Mart to the position of the world's number-one retailer? Still, as Wal-Mart built new stores in town after town, supported by cutthroat pricing and solid logistics, Kmart's complacency would cost them. Part of the problem was that as Wal-Mart was pouring money into information technology (IT), Kmart's IT budget continued to shrink – not just once, but several years in a row. While Wal-Mart's logistics and supply chain management got sharper, Kmart's stagnated. And while Wal-Mart was able to squeeze more value out of its stores and its systems, Kmart lost ground. By the time Kmart had finally decided to start devoting more resources to IT, it was so far behind Wal-Mart that catching up would have been a near-impossible task without the recession in the early part of this decade. With the effects of the recession taken into account, Kmart instead was consigned to also-ran status among discount retailers.
The organization has had to ensure that it has retail stores in many countries globally and website options in more than 100 countries. The company further enhances access of online stores in more than 37 countries which is accessible all the time and people are able to access the services regardless of their location. Globalization further affects the organization in the sense of international market management which requires it to engage in strictly global decision making. The organization’s production networks have been geared to enhancing global competition (Lüsted, 2012) .The Company is further good when it comes to seizing the opportunities available in global market. For the organization to find efficient as well as cheap means of production, it has to bargain hard so as to allow its contractors to have low profits. This mostly is consequential to the suppliers cutting corners with the use of cheap
Wal-Mart is known to beone of the best supply chain companies in the world. Throughout the years Wal-Mart has adapted strategies that keep up to their name. Unlike many retailers, Wal-Mart purchases goods directly from manufacturers, skipping a few steps of the supply chain cycle. Buyers use advanced negotiation skills to make sure they are receiving the best price on purchases. Wal-Mart also has their own trucks picking up from warehouses, reducing the price significantly on transportation. Long term relationships with vendors are extremely emphasized to understand prices and cost structure. These practices build Wal-Mart to its name and keeps low prices for retail customers all over the world. Supply Chain studies have shown that in 1998, Wal-Mart would fill up stock in 2 days compared to their competitors which would complete it in 5. Part of the reason Wal-Mart would replenish so
The company is a well established brand and one of the largest retailers in the electronics market. However, competitors such as Amazon, Target, and Walmart are becoming alternatives to customers with competitive low prices and multiple options to receive the product. Best Buy should complete the omnichannel experience in matching their physical retail with online and mobile shopping experience. Becoming a one-stop location that allows a customer to research, shop, and purchase at their convenience is ideal. Best Buy also faces the problem of not making millennials their main customer base and is experiencing transaction losses due to this target market’s perception of the brand as being high priced.