Com will not be able to replicate that same study

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does have an advantage here that Amazon.com will not be able to replicate. That same study discovered that, “on average, retailers that have both a physical (store) and online presence have reported an average of 23% growth”, which Best Buy does have.
Big Competition As the consumer electronics market becomes saturated with large retailers the competition becomes more demanding. Companies such as Wal-Mart, Amazon.com, and Netflix.com are adopting strategies such as increasing inventory and lowering prices. Maintaining the lowest price is not one of Best Buy’s strategies to keep or gain market share, therefore, when other competitors employ this tactic, they increase the pressure on Best Buy. As some of the smaller chains such as Circuit City have gone bankrupt, other competitors are scrambling to attract their customers. Best Buy will need to remain vigilant in maintaining their customer centricity model (explained later), and continue to offer their “price match guarantee” to retain a competitive edge and large customer base. Government Regulation One of the ways retailers can entice customers to make more purchases is to offer credit to consumers. Offering this financing option from 2007-2009 resulted in 16-18% of their domestic revenue. This is a large portion of sales that might not have been made if credit was not available. However, new regulations established by the Federal Reserve might limit retailers ability to extend deferred interest credit to their customers, which may in turn, decrease sales and revenue. Internal Analysis Strengths No Commission Sales One of the most comforting things for a customer who is contemplating purchasing an item is to know that the sales team is not going to pressure them into buying something due to the fact that they will receive commissions on the sale. This can leave customers with a bad experience if they realize the product does not meet their needs, was never needed in the first place, or was too costly for their budget. Best Buy employs non- commissioned sales staff that are knowledgeable about the products. Customers can shop and ask questions without being pressured. This
tactic can build a level of trust, per se, which Best Buy hopes will develop brand loyalty and maintain customer satisfaction. Customer Centricity Model As mentioned earlier, Best Buy retains highly informed employees and prides itself in offering customers end-to-end services. These services include installation, repairs, and support services performed by their Geek Squad, a company acquired by Best Buy back in 2002. These two features make up most of their Customer Centricity Model, which also factors in a lot of customer information, to help them target specific customer groups. Using this model, Best Buy is able to form a strategic benefit unique to them, and unmatched by their competitors, whom mostly compete on price- levels only.

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