Shopping has turned into a part of everyday routine for most Americans. Large retail stores line major roads of American towns and cities, enticing buyers with attention grabbing advertisements for products which differ from everyday necessities, to flashy toys which promise hours of entertainment. Even though many stores carry these entertainment products, like TV’s, computers, gaming systems, and audio players, there exists one company that stands higher than the rest as the “dominant technology and entertainment retailer” (taitsubler.com) in the usa – Best Buy.
Having a gross income of more than $50 Billion in fiscal year 2011, along with a net income of $1.227 billion, Best Buy Co., Inc holds one of the largest market shares within the electronic products industry, because they should. Best Buy, founded in 1966, is electronics merchant, whose stores are chock full of expensive electrical toys and tools. Stores are split into departments, each department specializing in a type of technology. Each store features a Home Theater, Computer/Tablet, MP3/iPod, Gaming, Digital Imaging, Car Electronics, Music/Movies, Appliances, and Mobile (cell phone) department, by which products as well as their accessories are on display.
Best Buy, striving to become a one-stop shop for customers, also provides services to travel together with their products. Through partnerships with companies like Comcast, Dish Network, Time Warner, and Clear Wireless, customers can leave the Best Buy hours today with connections to the web, cable or dish TV, and phone services. From the acquisition of Geek Squad in 2002, Best Buy can also be able to offer repair and installation services on a lot of its wares, including TV’s, computers, and appliances. In reality, Best Buy now brands all of its warranties and installation services using the Geek Squad name, and encourages customers to utilize their in-store service counters, where they are able to talk one on one using a Geek Squad agent concerning the issues that they are experiencing making use of their technology.
Geek Squad will not be the only brand to become properties of Best Buy. Product brands like Dynex, Insignia, and Rocketfish are all owned by Best Buy. These brands are mostly manufacturers of product accessories like 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 that company since they result in higher margins on those products, and finest Buy has greater control over product inventory levels and greater flexibility in the creation of new items to suit with market trends. For example, Best Buy was able to react to the discharge from the IPad by creating several IPad accessories, such as cases and stands, through its brand Rocketfish. Not only did consumers benefit by having a greater variety of accessories to select from, but additionally through the less expensive costs that arose due to competition in the accessories market.
Other brands associated with Best Buy are Magnolia, a branch of the Home Theater department, where high end TV’s and speakers can be bought, for those customers that desire above average performance from their TV’s and speaker set-ups, and Napster, which, up until earlier this year, was an effort by Best Buy to get into 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, such as Wal-Mart and Target, who may have recently put forth efforts to expand their electronics selections at increasingly competitive prices, and also from online retailers such as Amazon.com and Newegg.com, who are able to offer large selections exceedingly less expensive costs due to 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 a ueukql to see and understand products close up before ordering them from another company online.
Ex Best Buy CEO, Brian Dunn, however, has an optimistic look at his company’s technique for competing with these other businesses. Bestbuy.com is most beneficial Buy’s response to online competitors, and contains been called “extremely successful” by Dunn. Additionally, it comes with an edge on Amazon and Newegg; these products ordered from Bestbuy.com could be acquired available, which eliminates the price of shipping. 40% of online orders are picked up in store, based on the article Best Buy Gets Squeezed which signifies that consumers do enjoy having this option offered to them. Furthermore, items ordered online could be returned to brick and mortar locations, which consumers find convenient and reassuring. “In the future, physical stores alone will never be enough. Digital alone will never be enough. How they get together is exactly what really matters,” says Dunn (Best Buy Struggles with Global Ambitions).