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Best Buy analysis
Integrative Business Strategy (MGS 4999)
Kean University
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Antonio Mormile Best Buy
Best Buy is one of the largest retailers in the world. They specialize in selling technology items such as phones, televisions, appliances, and computers. In this paper we will be looking at an overview of the company including its strengths and weaknesses. The first thing talked about will be Best Buy’s PESTEL analysis. When it comes to political factors you might not think these would affect Best Buy, but surprisingly they do. Best Buy imports a lot of their goods from foreign nations in order for them to save as much money as possible. So one thing that could greatly affect them is trade tariffs or boarder taxes. If the US government decides to raise the taxes for foreign companies, this would lead to Best Buy having to pay more for their goods. Economic factors can be important for Best Buy depending on the types of taxes they pay. With the new tax laws about to be passed it can save Best Buy save a lot of money. Which means they can then spend that money they saved on expanding business and hiring new workers. Another factor that has to be considered is that since almost every company is likely to save money on their taxes they can also use that money to expand their business. A good example of this would be if saved a lot of money because of the new tax reform, they could then go out and buy new computers for their offices. Which could lead to Best Buy getting more customers. For social factors a good thing for Best Buy is that their factories are all incredibly safe for their workers. If your employees feel safe and comfortable where they will perform better at their jobs. This also makes Best Buy look good to their customers because if a company treats its employees bad it can give that company a bad social look. Another social factor Best Buy has to take into count is the fact that people either are more frugal with their money or don’t have as much money to spend in today’s economy. When it comes to Technological factors for Best Buy a big one is digitalization. In order for Best Buy to stay ahead of its competition they must keep up with how customers want to buy things. Many people today want to be able to look online to find something then have it delivered directly to them. This is a reason why Amazon is so popular, if Best Buy was to mimic what Amazon is doing they could benefit greatly from it as well. Another important factor is making sure they expand their mobile capabilities. The reason they would want to do this is so that customers could shop and buy things from any platform and from anywhere. For Best Buy a big problem throughout their history has been lawsuits. They have faced several large lawsuits in the past few years. One of their most recent lawsuits came about because Best Buy was caught selling products that were previously recalled for malfunctioning. Big lawsuits like these can cost large companies a lot of money but they also can send a bad message out to their consumers. This could likely cause them to lose many customers. When it comes to environmental factors Best buy is an incredibly green company. This means that they do their best to make sure they do not harm the world we live in. Best Buy has created a system that tracks the companies recycling and carbon outputs. This helps to try to cut down on the waste they produce and it also shows them where they have room for improvement.
For Best Buy we consider the power of the buyers to be low. It is considered low because when it comes to the prices at electronic stores they are relatively similar. If a customer comes in to best buy they are usually looking for a specific item and they usually know how much it is going to cost already. When it comes to the power of suppliers we consider this pretty high. It is high because technology is constantly changing faster and faster every day. This means that Best Buy has to constantly stay up to date with their technology if they want to keep brining customers into their stores. Regardless of what the item might be if it is popular to consumers Best Buy would want to sell it on their shelves. The threat of substitutes is considered to be medium. In today’s time electronics will never be replaced and there will always be a need for them. The only real substitute Best Buy would have to worry about is competition other than that there isn’t much room for substitutes. It is incredibly hard for new companies to get into the technology market so we would consider this risk low. There is currently a lot of competition already in the technology market, which means many of the larger companies already have most of the market share. It would be very hard for another company to come in and take some of the market share unless they had a product that no one else had. The rivalry factor in electronics is very high. Not only does Best Buy have to worry about other stores selling electronics but they also have to worry about online competitors that are beginning to sell electronics online. This makes the buying experience much easier for the customers. Best Buy has a lot of competitors because it is in such a popular field. One of its biggest competitors is Wal-Mart. Wal-Mart is one of the biggest companies in the world, what makes them such a big competition with Best Buy is the fact that they have a price match guarantee. This means that if Best Buy is selling a laptop for two hundred dollars Wal-Mart will guarantee that they will match that price for any customer who brings in proof that Best Buy is selling it for that price. One of the other big competitors for Best Buy is Amazon. Amazon had become one of their biggest rivals because of their convenience factor. Most people would much rather order their product online and wait a day or two for it to be delivered right to their door step, rather than have to go out to the store and carry it back themselves. When we look at the VRIO analysis the three things that stand out for Best Buy would have to be Customer Service, Geek Squad, and Show rooming. When it comes to customer service Best Buy has great employees that can help you find anything you need in their store and it doesn’t stop there, they can also answer any question you might have a bout a product. Probably one of the best thing Best Buy has going for it would have to be their private brand Geek Squad. It Is their version of tech service, they can help setup anything sold at best buy and repair anything they sell there. It has become incredibly profitable for them. The last thing would be the ability they have to show off all of their products in their stores. This is a plus for any customer that doesn’t specifically know what they want and it gives them the ability to test out other brands. Valuable Customer Service Rare All brand types in store Cost to imitate Geek Squad
Best Buy analysis
Course: Integrative Business Strategy (MGS 4999)
University: Kean University
