Best Buy began in 1983 as an audio equipment retailer and has since grown to become the largest consumer electronics retailer in North America. However, Best Buy has faced challenges in recent years from increased competition from Amazon and Walmart. Best Buy's "Renew Blue" strategy aimed to enhance the customer experience in stores, improve employee training, and expand product offerings online. The new "Best Buy 2020" plan focuses on maximizing the multi-channel retail business, providing services to meet customer needs, and accelerating growth in Canada and Mexico. To address problems like showrooming, Best Buy must focus on exclusive products, charging manufacturers for store space, matching online prices, and improving after-sales service.

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REINVENTING BEST BUY CASE ANALYSIS
GROUP 7 :

2.  Beginnings of Best Buy 3
 Company at a Glance and USP 4
 SWOT Analysis of Best Buy 5
 Competitors to Best Buy 6
 Problems faced by Best Buy 7
 Renew Blue Strategy – The Roadmap to Resurgence 8
 Best Buy 2020: Building the New Blue 9
 Solutions to Best Buy`s Problems 10
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AGENDA
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3. Beginnings of Best Buy
 Best buy began as audio component system retailer called
sound of music. In 1983, with seven stores and $10 million in
annual sales, Sound of Music was renamed Best Buy
Company, Inc.
 The company also expanded its product offerings to include
home appliances and VCRs, in an attempt to expand beyond
its then-core customer base of 15-to-18-year-old males
 Best Buy is the largest North American consumer electronics
and appliance retail store
 Faced by challenges from Walmart and Amazon
 To overcome the problems faced “The five –point plan” was
introduced
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4. Company at a Glance and USP
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Company at a Glance USP
 Headquarters: USA
 Segment : Retail
 Founder: Richard M schulze
 No: of Locations: 1026
 Products: Consumer Electronics
 No: of employees : 125000
 Declining Market Share
 Home delivery
 Repair and warranty services
 In home technical services
 Financing
 Assortment of goods(unique)

5. SWOT ANALYSIS OF BEST BUY INC.
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STRENGTHS
 Market Leader in North America
 Served a large customer base
 Unique and Compelling Service
Proposition
 Competitive Prices
 Multi-Channel Service
 Geek Squad Support
WEAKNESSES
OPPORTUNITIES THREATS
 Declining Market Share
 Failure to capitalize on Online Market
Space
 Declining Operating Margins
 Fewer stores compare to stores like
Walmart
 Lower customer satisfaction
 Huge untapped market in developing
countries
 Rising popularity of E-Commerce and M-
Commerce
 Demand for new products
 Demand for technical expertise (Geek
Squad)
 Rising Competition
 Availability of Substitutes
 Showrooming
 Intense online competition
 Deep Discount Pricing (Adopted by
Walmart)
 Resulting in Increasing Costs

6. Competitors to Best Buy
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Amazon Walmart Target
COSTCO

7. Problems faced by Best Buy
 Rising Competition : Walmart offering deep discounts and Amazon growing share
online (Taking advantage that it need not charge sales tax)
 Showrooming : Losing share to amazon, which encouraged consumers to view
products at Best Buy and then buy them online at lower price
 Launch of price check app – Gave a platform for customers to compare and Best
Buy`s in-store price with Amazon
 Shifts in channel and product mix – Negative Comparable Sales
 Failure to capitalize on online market
 No exclusivity
 Low customer satisfaction scores and Poor Price Perception
 Error of opening stores in the times of recession
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8. Renew Blue Strategy – The roadmap to resurgence
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The company went for downsizing to remain
competitive
Reinvigorating the customer experience –
Involved operational improvements in stores
Enhance Employee Engagement – Introduced
Induction Training Program
Expanding product assortment, Adding more
product information, Improving online search,
Simplifying access to Reward Zone points were
considered to tackle deteriorating international
business
To improve store productivity – Reduced the
space allocation (Categories such as CD, DVD
etc.

9. Best Buy 2020: Building the New Blue
The three pillars of the Best Buy 2020: Building the New Blue
 Maximize the multi-channel retail business
 Provide services and solutions that solve real customer needs
 Accelerate growth in Canada and Mexico
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10. Solutions to Best Buy Problems
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Sale
exclusive
products not
available
online
Charge
equipment
manufactu
res for
showroom
space
Focus on
online
market and
managing
inventories
Continue
matching
the
competitor
prices
Focus on
after sales
service and
employee
efficiency
Focus more
on
profitable
goods and
services

11. Thank You
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