Best Buy Case Study
BEST BUY In 1966, Richard Shulze opened a small business in St. Paul, Minnesota called Sound of Music. In the next 17 years Shulze's small store rapidly grew into a multi-million dollar outfit. In 1983, Sound of Music changed its name to Best Buy Co., Inc and the first superstore was opened in Burnsville, Minnesota. With the new name the store also began carrying more name brands, appliances, VCRs and offering central service and warehouse distribution. Throughout the nineties Best Buy became pioneers in offering the newest technology such as DVDs and high definition TVs. In 1999, Best Buy and Microsoft combined to cross promote each other and also offered a two for one stock split. Now in 2005, almost 40 years after the first store
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Corners are set up to look like dorms or recreation rooms you can test the newest games and technology. Best Buy has new express checkout lines for the Jills and store music is turned down a notch. After a successful pilot project involving 32 stores, the company began rolling out its customer-centricity initiative to an additional 110 stores. A UBS analyst report suggests that this initiative should provide Best Buy with stronger financial results as the company refines its program. It also should provide less recurring results, as more stable relationships with high-value customers counteract shifts in general consumer spending and demand for consumer electronics. The UBS report also notes that employee empowerment is crucial to the success of Best Buy's program. "Best Buy empowers its store-level employees, those individuals closest to its customers, to tweak merchandising, store signage, store layout and so on to best appeal to particular customers," the report says. Best Buy's initiative is based on seeing its business from the customer's perspective, understanding customer needs and then attempting to meet those needs. The company says the stores included in the pilot project have seen gains in comparable-store sales more than twice as good as other U.S. Best Buy stores and a gross profit rate higher by about 0.5 percent of revenue.
Proposed Strategy for Best Buy