![Best Buy Case Study<br />MKT2316<br />Section 315<br />SWOT Team<br />Tanika St. Pierre, Melissa Falsetti, Fidaa Hajobeid, Michelle O’Reilly, Hayley Mccurdy, Devon Brown, and Anahita Fooladi<br />April 4, 2011<br />Table of ContentsExecutive Summary3Situation Analysis4Assumptions5Central Problem 5Evaluative Criteria5Alternatives6Analysis of Alternatives10Decision and Justification 11Implementation12Appendices13Bibliography14<br />Executive Summary<br />Best Buy is the #1 “big box” electronic retailer that offers a wide variety of electronic goods and products (Case Assignment: Best Buy). Since it caters to a niche consumer market there is a high demand for our products, which causes a downward pressure on prices. An opportunity for Best Buy to increase revenue would be to offer longer guarantees on products and financing options. However, natural disasters and manufacturing defects pose a great threat to maintaining our high quality inventory and image. Our leading competitor, Wal-Mart Superstores, also poses a threat as they continue to climb the electronic market share.<br />In order for Best Buy to differentiate themselves from any other competitor, SWOT Team is investigating ways to build on its business-to-consumer success and move into the business-to-business world.<br />SWOT Team recommends that Best Buy includes personal, door-to-door selling of products to businesses. The reasons behind this decision would be the competitive advantage over Wal-Mart Superstores. An increase in the quantity of products sold will positively increase Best Buy’s profits. The amount of revenue as opposed to the costs of implementation will result in a high return-on-investment. A major factor in this decision is the creation of personal relationships and strategic alliances with business consumers. These strategic alliances will create a cooperative agreement between Best Buy and business clients CITATION Lam10 4105 (Lamb, Hair, McDaniel, Kapoor, Klaise, & Appleby, 2010).<br />An issue that may arise from this chosen alternative could be from hiring sales representatives that do not meet their sales quota. This issue could be dealt with by careful screening and selection of individuals who meet specific criteria.<br />Many benefits would be a result by implementing this alternative. One such benefit would be an increase in profits and goods sold. Strategic alliances with businesses would also be beneficial for future sales and purchases. An increase in market share for Best Buy would arise since it would be catering to not only to individual consumers, but to large businesses, institutions, and the government as well.<br />In order to put this plan into action Best Buy will need a marketing team to create an implementation plan and timeline. A financial analysis will be conducted of all the new costs. Sales representatives will be hired and specially trained to sell the products directly to selected business clients. Vehicles will be purchased for sales representatives to travel to their assigned locations to sell our products and create business consumer relationships. <br /> <br />Situation Analysis<br />Internal Environmental Analysis as applied to Best Buy:<br />- Strengths:- electronic items more affordable and common<br />- began “big box” retailing<br />- #1 retailer in its segment<br />- In-store uniformity<br />- Commercials accurate to real-life experience<br />- 16% share in $130 billion market <br />- 600 stores in US & still growing <br />- open later on weekends, outsource products<br />- allows in-store privileges online<br />- Weaknesses:<br />- Can’t sell all available electronics in store<br />- Negative pressure on prices/revenue<br />- Dizzying array of products<br />- Downward pressure on prices because of high demand<br />- Casual looking staff<br />- Only go if you have a purpose (electronics only); niche market<br />External Environmental Analysis as applies to Best Buy:<br />- Opportunities:<br />- Sell more up-scale items<br />- Greater international expansion (including Canada)<br />- Redesigning new stores<br />- Constantly upgrading products<br />- Longer guarantees<br />- Financing <br />- Price-match system<br />- Personalized selling to businesses<br />- Threats:<br />- Wal-Mart <br />- Natural disasters in outsourced countries cause a production delay<br />- Manufacturing incidents<br />- Relationships with providers (strategic alliance)<br />- Manufacturing costs<br />Sources: Case Assignment: Best Buy; www.bestbuy.com<br />Assumptions<br />Assumptions applied to Best Buy:<br />,[object Object]](https://image.slidesharecdn.com/swot20team20case20study20-20best20buy1-110410055422-phpapp01/85/Best-Buy-case-study-1-320.jpg)
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Best Buy case study
- 2. Best Buy doesn’t cater specifically to businesses already.This would represent a constraint.(www.bestbuy.com)
- 5. Image0.20
- 12. 16 to 35 years old
- 13. Both genders
- 14. Middle class and up
- 16. Parents
- 17. 36 to 50 years
- 20. Small businesses, locally-run business, and small institutions that purchase smaller, rather than larger equipment
- 23. Rural businesses
- 26. Small to medium businesses
- 29. Price conscious businesses (looking to compare prices)
- 32. Large business and corporations within capital region
- 33. Government
- 34. Institutions
- 35. Resellers
- 38. Large businesses and corporations in surrounding areas
- 40. Advantages: No changes are required since everything remains the same, easy to implement, low risk
- 41. Disadvantages: No new benefits, no direct increase to profits, no improvements to customer satisfaction
- 42. Alternative #2 – Website Redesign
- 43. Advantages: Easy to implement, low cost, high ROI
- 44. Disadvantages: May not reach as many customers as predicted, won’t create a large profit increase, possible technical issues
- 45. Alternative #3 – In-store Business Section
- 46. Advantages: Widens market share to include businesses, better customer service for businesses, increase profits
- 47. Disadvantages: High risk, in-store space is minimized for other products, additional costly expertise needed
- 48. Alternative #4 – Personal Selling of Best Buy Products
- 49. Advantages: High ROI, greater short-term profits, better image, easy to implement
- 51. Product/Service changes: We will be adding the service of personalized selling which includes sales representatives going directly to business locations. Fifty sales representatives will be hired and specially trained to sell our products to these businesses.
- 52. Pricing strategy: To maintain our status as the leading retailer in the electronic segment we will continue to offer the lowest costs while providing businesses with a 20% discount and free shipping.Refer to Appendix A for a brief financial analysis.
- 53. Communications plan: Best Buy will create a potential client database and utilize our new sales representatives to promote this new marketing strategy.
- 54. Distribution plan: The distribution of the products will take place at the business consumer locations. Refer to Appendix B to view a detailed timeline of our action and implementation plan for our first two quarters.<br />Appendices<br />Appendix A<br />Financial Analysis:<br />One-time costsAnnual Costs- Training- Marketing research - Travelling vehicles- Communications- Salaries- Operating cost- Product and inventory- Vehicle maintenance<br />Appendix B<br />Implementation time line for the First Quarter:<br />StepsWhatWhoWhen1Select marketing team Director of marketingJanuary 2Create marketing planMarketing teamJanuary3Determine financial aspects to implement planFinance departmentFebruary4Research potential client databaseMarketing teamMarch<br />Implementation time line for the Second Quarter:<br />StepsWhatWhoWhen1Hire sales representativesSales supervisor/managerApril 2Train sales representatives Sales managerApril3Purchase travelling vehiclesFinance department/Marketing teamMay4Begin selling to businessesSales representativesJune<br />Bibliography<br />Best Buy. (2010). Retrieved April 2, 2011, from Best Buy Canada: <br />http://www.bestbuy.ca/en-CA/home.aspx<br />Case Assignment: Best Buy <br />Lamb, C. W., Hair, J. F., McDaniel, C., Kapoor, H., Klaise, H., & Appleby, R. (2010). MKTG, Canadian Edition. Toronto: Nelson Education Ltd.<br />