Our strategic management team conducted a thorough external and internal analysis, considering quantitative data from Best Buy on viability of future strategy and recommendations they should consider.

1. Best Buy Analysis
Adam Smith, Neal Ferrell, Seth Fryar, Catherine
Rasmussen, Ryan Howard

2. Introduction
• Founded in 1966
• Most recent change in leadership
• CEO Hubert Joly- September 2012

3. Current Problem
• Floating Anchor- Not low cost nor differentiated
• Competing in Commodity Market
• Amazon
• Wal-mart
• Lowering Prices
• Price match
• Trained Salesforce

5. Sales Revenue Trends

6. Sales Revenue Trends

7. Gross Profit Margin (Losses)

8. Gross Profit Margin (Losses)

9. Technological Trends
• Increase in smart phone and data plan usage
• Increase in smart devices, appliances, and homes
• Increasing pace of technological change

10. Demographic Trends
• Increase in e-commerce under age of 50
• Window shopping/show rooming
• 45-64 year olds = fastest growing age group
• Younger generation already tech savvy

11. Economic Trends
• Fewer good jobs
• Student debt is increasing
• Individual economic recovery = slow
• Increasing economic gap = shrinking middle class

12. Threats
• Suppliers: E-commerce
• Rivals: E-commerce, window shopping, customers
have less money
• Substitutes: Smart phones with data, window
shopping, lower income levels
• New entrants: E-commerce

13. Opportunities
• Generation X - 45-64 year olds
• Not extremely tech savvy
• Less debt
• Better jobs with better pay or already retired
• Fastest growing age group
• More likely to buy from brick-and-mortar stores
• Value of education-based selling (sales person)

14. VRIO Analysis
Resource Valuable Rare Imitable Organize CA/CP/CD
Price matching x x Easy x Parity
Best Buy Mobile x x Easy x Parity
Trained Sales
Force
x x Hard x
Sustained
CA
Geeksquad x x Hard x
Sustained
CA
Magnolia x x Hard x
Sustained
CA

15. Current Standing

16. Recommendations
• RC Willey Showroom model
• Smarthome implementation in-stores
• Expand Best Buy Mobile