Wednesday, January 9, 2013
SWOT Analysis Essay on Best Buy
SWOT Analysis Essay on Best Buy
Best Buy has already established a good reputation in the global market. It has been recognized not only for the large hypermarkets but also for the credibility that the company has earned in providing the best service possible for the customers. Currently, the company holds a large market share in retail industry. Apparently, the revenue of the company is continuously moving upward as Best Buy constantly penetrating the global market.
The company has developed a strategic plan which enables the company to relocate the store shelves of Best Buy based on the behavior of the market. Best Buy has created niche segmentation to each store making the profit of the company grow bigger because of diverse target markets in each location. The company has also developed a reward zone program which allows the customers to earn points and receive gift certificate for future purchase (Pride, 2008). Resources and capabilities that allow the firm to complete important tasks are one of the strengths of the company. Best Buy is able to effectively manage the flow of its inventory that helps them complete the important task of having the right merchandise on its shelves for customers to buy.
Although Best Buy has a large market share, the sales of the company heavily relied on domestic sales. The large percentage of the company’s sales mostly comes from US market despite the existence of its stores in other countries. The company still needs to push the products to the market in order to stay in the global market. Best Buy lacks strategies in strengthening the business in other countries where the company operates.
Another weakness of Best Buy is its poor marketing strategy. The company focused solely on a market niche for affordable products, neglecting the niche that demands for high end items. Best Buy has been recognized as a store for frugal shopping, which became the initial positioning statement in the market.
The constant penetration of companies in the market with new products to introduce to the customers may give an opportunity to Best Buy to grow more in the marketplace. New items are being released and more products are expected to come out in the market in the future. The world has become a place for constant innovation of technology and Best Buy will benefit from the manufacturers’ continuous release of gadgets.
The plan of Best Buy to open new stores in other countries may help the company to expand globally. The company has been planning to penetrate more markets and construct more stores which would definitely boost the revenue of the organization (Lamb et al, 2007).
Competition has been the greatest threat in the marketplace. The retail industry has been penetrated and dominated by prominent retailers in the world. Wal-Mart, Target, and Carrefour are few of the companies that are already known in the market for providing products in discounted prices. Undeniably, these companies have already established strong names in the global market. Best Buy, on the other hand, continues to grow despite the existence of these big retailers in the market; however, these companies affect the operation of Best Buy.
Since Best Buy offers consumer electronics in the market, the company sets prices higher than the usual costs of consumer goods (McGuigan et al, 2010). The company’s sales will be highly affected if the income of the consumers decreases.
Lamb, C., Hair, J. & McDaniel, C. (2007). Marketing. USA: Cengage Learning
McGuigan, J., Moyer, C. & deB Harris, F. (2010). Managerial Economics: Applications, Strategy, and Tactics. USA: Cengage Learning
Pride, W. (2008). Marketing 2010. USA: Cengage Learning
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