Answer to Question #232448 in Management for puffy

Question

1. What were the strategic challenges facing Best Buy in 2012? Why was the company finding them hard to respond
2. What did Joly see as Best Buy’s key strengths and weaknesses? Do you agree with Joly’s initial diagnosis?
3. Do the Renew Blue Goals address the issues? Which initiatives in the Renew Blue made a strategic difference
4. What advantages does “multi channel” retailing offer Best Buy?
5. Has Joly done enough? How well is Best By doing compared to Amazon in 2017? Is Building the New Blue a game changer?

Answer 1

#1

In 2012, everything seemed to be going wrong for Best Buy. CEO Brian Dunn announced that he would close 50 big-box stores in the United States, downsize the remainder by 10%, and cut $800 million incosts by March. A month later, the CEO had just resigned after admitting to an improper relationshipwith a female employee. Employee engagement seemed to be in a poor management. In June, Schulzestepped down as chairman after acting inappropriately by not telling them of the allegations againstDunn. In August, Hubert Joly took over as CEO. At the time, he was the CEO of hotel, cruise ship, andrestaurant company Carlson. According to Wedbush Securities analyst Michael Pachter, the lack ofexperience in retail makes him unqualified. After that, company’s share price fluctuated more than 10%at $18.19. 

#2

According to Joly the key strengths and weakness of buy best were

Strengths

Indisputably, Best Buy Company is regarded as the largest firm selling consumer electronics in USA and other countries such as Mexico, Turkey, and the UK. The reason as to why the Best Buy Company is able to command approximately 20% of the consumer electronics market share is the unique market position.

Market positioning is an important strategy in ensuring that consumers are able to obtain the required goods. In addition, Best Buy Company has an extensive network of outlets and subsidiaries, which make the firm able to access many consumers within a shorter period (Kwok, Dornbach-Bender, and Lange). The strong network of stores enables the firm to continue enjoying economies of scale hence further positive performance.

Weakness.

Best Buy Company has some specific weaknesses. The weaknesses include limited suppliers of consumer electronics, increased lawsuits, and insufficient geographic concentration. Best Buy Co. continues to over-rely on few suppliers hence subjecting the firm to serious consequences (Gulati).

His initial diagnosis is true and I agree with it as the changes he brought to remedy and enforce the strength and weakness brought about an improvement to the business.

#3

The Renew Blue goals addressed the issues in some sort of way. I think by “attract and grow 'transformational leaders' and 'energize our employees to deliver extraordinary results'” made a strategic difference, because Best Buy offered experience that no other online retailers can offer.

#4

The multi chanell initiative has benefitted best buy by Increasing sales ,leading to better data collection and enhanced productivity of workers.Best Buy's latest multi-channel initiative is delivering substantial results for the company after reporting a record number of consumers visited bestbuy.com in the company's latest quarter. Best Buy's online business revenue for its latest quarter increased more than 20 percent versus last years.

#5

Joly’s strategies work well for company’s succession and for being competitive in themarket. Apart from this, during that fiscal period they already achieved the financial targets thatsets for fiscal 2021. Joly had undertaken following initiatives in order to reach success: -Joly gave associates the ability to match prices in stores to those found online, helping toprevent shoppers from checking out its products in stores before buying it more cheaplyon the web.He partnered with technology companies to ensure Best Buy was offering some of the mostinnovative products. Notably, these efforts were focused on driving sales, a task someturnarounds can neglect in favor of rashly slashing expenses to stabilize a business. 

Best Buy’s stock (NYSE: BBY) has grown by a strong 113% (as of September 10) since the coronavirus low on March 23, pushing its market value close to $28 billion. Over the same time, Amazon’s stock (NASDAQ: AMZN) has gained about 70% of its value and has literally dwarfed all of its retail competitors, with a valuation of nearly $1.6 trillion. Best Buy has a significant share in the U.S. consumer electronics retail segment, with a market share of about 15%. However, the company has lost share in recent years to online retailers – particularly Amazon, forcing it to enter pricing wars and invest in enhancing online offerings to better integrate their digital and brick-and-mortar businesses. Consequently, Best Buy (generating more than 25% of sales online) was able to drive consumers to purchase electronics online without losing customers to the e-commerce giant in the recently reported FY Q2. It saw a major sales boost from the work from home and virtual school trends and is poised to survive the Amazon dominated market in the long-term.