Shopping has developed into a part of everyday routine for most Americans. Large retail stores line major roads of American cities and towns, enticing buyers with attention grabbing advertisements for items that vary from everyday necessities, to flashy toys that promise hours of entertainment. While many stores carry these entertainment products, like TV’s, computers, gaming systems, and audio players, there is one company that stands above the rest as the “dominant technology and entertainment retailer” (taitsubler.com) in america – Best Buy.
Using a gross income of more than $50 Billion in fiscal year 2011, and a net income of $1.227 billion, Best Buy Co., Inc holds among the largest market shares in the electronic products industry, since they should. Best Buy, founded in 1966, is electronics merchant, whose stores are chock packed with expensive electrical toys and tools. Stores are split into departments, each department specializing in a form of technology. Each store includes a Home Cinema, Computer/Tablet, MP3/iPod, Gaming, Digital Imaging, Car Electronics, Music/Movies, Appliances, and Mobile (mobile phone) department, in which products and their accessories are on display.
Best Buy, striving as a destination go shopping for customers, also provides services to visit with their products. Through partnerships with companies like Comcast, Dish Network, Time Warner, and Clear Wireless, customers can leave the Best Buy with connections to the internet, cable or dish TV, and phone services. From the acquisition of Geek Squad in 2002, Best Buy is additionally able to offer repair and installation services on many of its wares, such as TV’s, computers, and appliances. In fact, Best Buy now brands all its warranties and installation services with all the Geek Squad name, and encourages customers to apply their in-store service counters, where they can talk one on one using a Geek Squad agent regarding the issues that they are experiencing making use of their technology.
Geek Squad is not the only brand to get belonging to Best Buy. Product brands including Dynex, Insignia, and Rocketfish are common properties of Best Buy. These brands are mostly manufacturers of product accessories including wireless mice (for computers), speakers, cables and cases, but both Dynex and Insignia are manufacturers of larger products, like TV’s. Having “house brands” is helpful for your company because they result in higher margins on those products, and finest Buy has greater power over product inventory levels and greater flexibility in the development of new items to match with market trends. For instance, Best Buy could reply to the discharge in the IPad by creating several IPad accessories, like cases and stands, through its brand Rocketfish. Not just did consumers benefit with a greater range of accessories to pick from, but additionally through the affordable prices that arose as a result of competition in the accessories market.
Other brands associated with Best Buy are Magnolia, a branch of the Home Theater department, by which more expensive TV’s and speakers are sold, for anyone customers that desire above average performance off their TV’s and speaker set-ups, and Napster, which, until earlier this year, was an effort by Best Buy to enter the music streaming and download market. (Napster was recently sold to Rhapsody for the undisclosed amount.)
Best Buy has already established increasing difficulty with domestic expansion also, facing stiff competition off their retailers, like Wal-Mart and Target, that have recently put forth efforts to expand their electronics selections at increasingly competitive prices, as well as from online stores including Amazon.com and Newegg.com, who are able to offer large selections exceedingly affordable prices because of their low overhead. Best Buy stores happen to be called “Amazon’s showcase” by consumers who make use of the blue and yellow retailer as being a ueukql to find out and find out about products in close proximity before ordering them from another company online.
Ex Best Buy CEO, Brian Dunn, however, posseses an optimistic look at his company’s technique for rivaling these other companies. Bestbuy.com is better Buy’s response to online competitors, and it has been called “extremely successful” by Dunn. Additionally, it has an edge over Amazon and Newegg; these products ordered from Bestbuy.com may be picked up available, which eliminates the price of shipping. 40% of online orders are found in store, based on the article Best Buy Gets Squeezed which signifies that consumers do enjoy possessing this option accessible to them. Furthermore, items ordered online could be returned to brick and mortar locations, which consumers find convenient and reassuring. “Down the road, physical stores alone will not be enough. Digital alone will never be enough. The way they get together is what really matters,” says Dunn (Best Buy Struggles with Global Ambitions).