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Best Buy

This document provides an overview of Best Buy, including its history, vision, strategies, products, customers, and SWOT analysis. It discusses Best Buy's implementation of a customer-centric strategy across its stores, which led to some internal conflicts and increased costs. The document evaluates alternatives such as abandoning, continuing, or modifying the customer-centric approach. It recommends allowing the new model time to mature while continuing conversions at a slower pace and addressing weaknesses found during the rollout.

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Pallavi Ghai
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848 views

Best Buy

This document provides an overview of Best Buy, including its history, vision, strategies, products, customers, and SWOT analysis. It discusses Best Buy's implementation of a customer-centric strategy across its stores, which led to some internal conflicts and increased costs. The document evaluates alternatives such as abandoning, continuing, or modifying the customer-centric approach. It recommends allowing the new model time to mature while continuing conversions at a slower pace and addressing weaknesses found during the rollout.

Uploaded by

Pallavi Ghai
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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BEST BUY

Presented by: Abhishek Sood Pallavi Ghai Saranya Shukla Suraj Anand Tanveer hassan

Company Overview
Grab and Go New Logo1989 Sound of Music 1967- St. Paul, MN Best Buy Becomes company name - 1983 Global Expansion - Asia, Europe, Mexico, Turkey 2003-present Fortune 500 Top Co Customer #56 - $45 Billion Centricity 2009 Implemented - 2003

Best Buy Sale @ SOM tornado hit 9 Stores -1981

2nd Largest Consumer Electronics Retailer - 1993 Public Offering - $33.6M 12 Stores - 1986

Best Buy Mobile stores & Geek Squad to Europe 2003 CEO Dunn replaces retiring Anderson 2009 Fortune names Best Buy Top 10 performing stock, 2000

Vision & Strategy


To make life fun easy for consumers Believes thats its stores offer consumers meaningful advantages in atmosphere, product value, product selection, and customer service Best has four strategic initiatives: Customer Centricity Efficient enterprise Win with service Win in entertainment

Company Overview (Consumer Driven)


We believe that focusing on customers' needs generates growth opportunities At Best Buy, we aspire to be a responsible, values-driven global corporation we believe that's what you expect And we believe in customer centricity - the idea is that a customer isn't just looking for a product, but a solution or experience that improves her life Ranked highest in customer satisfaction among national and multiregional from 2009 report by J.D. Power and Association.

Product Solution Based


(Customer Centricity)

Implementation
Strengths Introduced in 12 labs to 32 pilots to 110 stores nationwide. Scientific method used of creating hypothesis ,testing it and analyzing the results. The result of this approach is innovation. It aimed to improve the customer satisfaction and loyalty leading to increase in profits.

Weakness Creation of SOP resulted in confusion in practices and procedures (atleast during transition period) The new processes were stated to takr five times more time. Tests done only on selected geographic region i.e. stores in California.

Difference between customer centric and simple service


Customer centric strategy concentrates on only a few sub segments instead of the old concept of everything to everyone or one style fits all. It encourages the employees to think and behave as owners and engage with customers to meet their unique needs. The idea behind customer centricity is to become customers smart friend and provide a complete solution.

Competitive Analysis

Out of Business CEO blamed demise on poor macroeconomic conditions Unknowledgeable sales staff Late to the game with Firedog customer service business, didnt resonate with customers as well as Best Buys Geek Squad Unfortunate position Mid-level player

Competitive Analysis

Top retailer in the country Lost leaders in drive traffic Convenience & wide range of products in one store 17% margins in CE (Mid player) Quality and service General merchandise Lack of flexibility

Dell
Customized products Reliability, Service and Support Customers cant go to retailers for custom-built products Huge global brand Customer Relationship Management and IT support business strategy Addition of new categories to business may hurt brand May need to reconsider free shipping to customers

Sources: Spolsky, Joel (2009), Kavilanz, Parifa (2009), Cuizon, Gwendolyn (2009) and www.marketingteacher.com

SWOT Analysis
Strengths
Heavily driven customer satisfaction/customer service based Innovation Valued, trained, rewarded workforce Volume purchases No of stores

Weaknesses
Customer Centricity model fragmented by individual store locations Devil Customers Turf battles /Lack of synchronization between business units The selling, general and administrative costs were higher in the converted stores, resulting is lower operating income

Opportunities
Centricity; max profit in high-end products and solutions Solution based to increase sales of products and services.

Threats
Competitors like Target, Wal mart, &Circuit City.

Keeping up with rapidly changing products and customer interest

Customer-centric Segmentation
Barry: Affluent, time-starved males looking for the highest quality product and services. BBFB: Small business owners with one to nine employees looking for technical solutions to meet their business needs. Ray: Family men who spend a disproportionate amount of their income on technology and entertainment solutions. Buzz: Males in their 20s looking for the latest entertainment for themselves and their buddies. Jill: Stay at home moms with two or more children. Shes looking to enrich her childrens educational and social development.

Problem Definition
Implementation of Customer-Centricity caused internal organizational conflicts and it increased operating expenses, which led to a loss of the overall brand image and fragmentation. The organization had lost focus during the implementation process resulting in the overall goal of providing an outstanding customer experience.

Alternatives Evaluation contd


C.

Abandonment of Customer Centricity to SOP common Best Buy (Big Box) customer experience Shift channels of distribution from primarily offline retail brick & mortar to more online channels for cost efficiencies

D.

Alternatives Evaluation
A. Continue to convert all stores to Customer Centricity; allow time for concept to mature
B.

Create a hybrid; continue with Customer Centricity; group personas/segments to market level instead of individual store (e.g. DMAs/cluster stores into local market)

Best Alternative Rationale


Allow time for the concept to mature; continue to convert all stores
Heritage of valuing customer relationship Prepares for future of industry and competition Big Box price driven vs. Big Box solution Connects to company values & retains talent/staff

Localization and segment relate to closer community, customer, and retail experience
Creates opportunity for new products and services for high profit margin sales

Implementation Plan
Communicate internally and externally that customer centricity model is new mode of operation
Create task force that reviews strengths/weaknesses of model; make changes based on recommendations Slow down pace of store conversions Devise actions for implementation plan Calculate how new model is affecting sales per sq foot Make adjusts to model as needed

Implementation Plan Time Schedule


One year for implementation based on when store was converted Modify the conversion process (slower pace) than the ones in initial conversion process Benchmark in 3-6 month increments based on how stores were initially converted

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