Situation Analysis
Internal Environmental Analysis as applied to Best Buy:
- Strengths:- electronic items more affordable and common
- began “big box” retailing
- #1 retailer in its segment
- In-store uniformity
- Commercials accurate to real-life experience
- 16% share in $130 billion market
- 600 stores in US & still growing
- open later on weekends, outsource products
- allows in-store privileges online
- Weaknesses:
- Can’t sell all available electronics in store
- Negative pressure on prices/revenue
- Dizzying array of products
- Downward pressure on prices because of high demand
- Casual looking staff
- Only go if you have a purpose (electronics only); niche market
External Environmental Analysis as applies to Best Buy:
- Opportunities:
- Sell more up-scale items
- Greater international expansion (including Canada)
- Redesigning new stores
- Constantly upgrading products
- Longer guarantees
- Financing
- Price-match system
- Personalized selling to businesses
- Threats:
- Wal-Mart
- Natural disasters in outsourced countries cause a production delay
- Manufacturing incidents
- Relationships with providers (strategic alliance)
- Manufacturing costs
Sources: Case Assignment: Best Buy; www.bestbuy.com
Assumptions
Assumptions applied to Best Buy: