MEMORANDUM
About Best Buy Co., Inc.
Best Buy
Co., Inc. is the biggest volume specialty retailer of personal computers,
consumer electronics, entertainment software, and appliances. In
this memorandum there will be information that gives a company overview,
good qualities about Best Buy, and even some bad qualities. Being
the biggest electronic super-store in the country has its responsibilities,
not only to its consumers, but also to its employees. To me Best
Buy has proven itself as a great and fun place to get all of your electronic
needs.
Best Buy:
Richard M. Schulze started best Buy in 1966,
but it was originally called the Sound of Music, and it also originally
carried only audio component systems. In 1983 it officially became
Best Buy when it started selling video products and appliances. In
1994 Best Buy decided to sell even more kinds of products including computers,
electronics, and entertainment software. One of its main strategies
to get customers in the store was to offer compact discs at an incredibly
low rate. Even though they didn’t make any profit in compact discs,
they brought customers in the store and they saw how much Best Buy had
to offer. With a combination of a high volume in products and Best
Buy’s strategy to have employees work non-commission, have them always
on the sales floor, and have them not go up to customers, but instead let
the customers come to them, launched Best Buy’s initial success.
To keep the customers in the store and keep them coming back, they gradually
extended their product selection and services offered. No only do
they have interactive displays that let you test virtually any product
that they carry, but they also have computer service technicians and technicians
that install stereos and speakers, among other things, in your car.
Best Buy eventually turned into a place for all you electronic needs.
For its fiscal year ending February 1999, Best Buy ranked 195 on the Fortune
500 with a total of ten billion dollars in sales. Best Buy keeps
growing with their addition of 44 stores in 1999, and a goal of 650 plus
stores opening by 2004.
Mission Statement:
"We improve people's lives by making technology
and entertainment products affordable and easy to use."
Some Highlights:
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Has over 300 stores in 36 states nationwide.
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Store size average is 44,000 square feet.
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Sells the most DVD products than any other
retailer.
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Offers upper management employees stock options.
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Is a DECA
partner for excellence at the Platinum level.
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Had no problems with the Y2K situation.
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Does not work employees on commission unlike
its main competitor, Circuit
City.
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Numer one when it comes to the average time
it keeps customers in the store (45 minutes).
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Recently announced a plan for a new 150 million
dollar headquarters in Richfield Minnesota, to be finished by the summer
of 2002
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Had record sales and profit in 1999
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CEO Richard Schulze recently donated 50 million
dollars to the University of St. Thomas.
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Has recently offered DSL service in some of
its stores.
Some Lowlights:
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Has had customer problems with their extended
warranty policies.
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Has had problems with non-experienced and
non-qualified technicians.
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Has been hit with class action lawsuits that
accuse them of fraudeulent business practices.
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Has been investigated by the Florida Attorney
General concerning its extended warranty policies.
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Saw its lowest profit and net gain average
in 1997.
Conclusion:
Although, like any large company, Best
Buy has had its share of mishaps and problems, it continues to work to
be the best and largest electronic super-store in the country. In
the BCG Portfolio Matrix it would definitely be in the “grow like crazy”
box, with a high market growth rate and a high market share. Best
Buy continues to grow with their strategy’s of carrying more house ware
products, entering new markets, and the continuous addition of new stores
nationwide. Just like Best Buy’s new advertising campaign boasts,
you should be able to walk into any Best Buy and “Turn On The Fun.” |