Strengths
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.
Weaknesses
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.
Opportunities
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).
Threats
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.
References
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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