Bestbuy’s Strategy

In the last few years, BestBuy has been experiencing fierce competition and has been fighting to introduce dominance in the consumer electronic market. Apple, Amazon, Wal-Mart, and Target atomic number 18 the current competitors that are giving them the most problems. A lot of people are orgasm into BestBuys stores to try out the products and then leaving the store to bargain online or at a slightly cheaper price. C. E. O, Brian Dunn, is left with many questions about keeping nodes in his stores and how to develop and sustain a competitive advantage in todays economy.According to the case, BestBuy is trying to create a competitive advantage in ternary areas customer-centricity, employment policies, and exclusive branding. After studying the VRIO framework, I hold in found that BestBuys three areas of schema do fit into the VRIO framework. BestBuy believes that an effective strategy is a commitment to customer-centricity. A business that implements customer-centricity caters t o specific customer necessarily and behaviors.According to the book, BestBuy wants to steer away from a product-centered marketing commence to a more customer-oriented marketing approach which will suffer them asking what problems its customers are facing, and then providing solutions. Furthermore, BestBuy wants to segment its customers into four different profiles Upscale Suburban, Urban Trendsetter, Empty Nesters, and Middle America. In different regions somewhat the U. S. you will find these diverse groups.BestBuy has been able to utilize the rare attribute of the VRIO framework with its ability to serve the needs of the predominant customer segment in a given region. BestBuy is unlike any company in the consumer electronic industry because as the book mentions, Nearly all companies claim to be customer oriented, but being customer centric required a radical reorganization and shift in employee mindset. BestBuy has reformatted the physical space in its stores and cogitate p roducts have been bundled together to meet the needs of certain segments.Store teams have also been trying to answer the following questions What kind of traffic do we have coming in our stores today, how effectively are we selling to the people in the stores, what does our customer information look like, what segments do we have coming in, and what kind of market share do we have for those segments? To answer those questions BestBuy has been investing in the right tools so that the field knows what to focus on. BestBuy has taken customer interest a step further, and so remote it has given them a rare advantage. BestBuy has also done a ethical job of organizing its employment policies to capture value.According to the book, BestBuy has set up an employee listening program that uses clean communication to better understand the needs of its workers. This program has done a great job of exploiting the companys capabilities because it is implementing tools such as annual company-wide surveys, a virtual discussion board, and one-on-one dialogue sessions. BestBuy is capturing value because they are listening to their employees and discerning information that was previously unknown to management. The final area that BestBuy is focusing its strategy on is exclusive brands.This last area is very definitive to BestBuy because it is valuable, rare, and costly to imitate. BestBuy currently owns these private labels Insignia, Dynex, Init, Rocketfish, and Geek Squad. As far as background goes, Insignia produces TVs, monitors, home-theater systems, and man-portable video/ audio players. Dynex produces storage media, data and power cables, webcams, and office supplies. Init produces media storage, equipment bags, totes and furniture for home theaters. Rocketfish is a top notch producer of cables that are mostly employ for TVs. And most famously, Geek Squad provides computer repair and installation services.BestBuy realizes that they cannot solely rely on these small pri vate labels to create, on their own, enough revenue to layover in business. But nevertheless, these private labels are valuable because they add attractive features to the company. Most of the products offered by these small labels are accessories that add value to the more valuable products which in turn away increase the profitability of BestBuy. In particular, I think Geek Squad is valuable because a lot of older people do not know how to set up the more complex electronics and often run into problems.Easy-to-setup installation and troubleshooting is a very attractive feature to most consumers. along those same lines, these small labels are rare because their products are only being sold in BestBuy stores. If youre a huge fan of Rocketfish cables or unfeignedly appreciate the helpfulness of Geek Squad then you have to come to BestBuy to get you want. These private labels are also costly to imitate I depend because it could be costly to implement and staff a repair and instal lation service in all of your stores like BestBuy has done with Geek Squad.Also, these private labels have a few unique products that could be hard to replicate. I know that Init has created some nice, high quality equipment bags and furniture for home theaters. I believe that aft(prenominal) weighing the benefits of all three of these areas that BestBuy has indeed created a competitive advantage. In one way or another they have valuable, rare, costly to imitate, or are organized to capture value with their products and services. BestBuys business level strategy is to focus on its people through customer centricity and employment policies.The managers in both(prenominal) areas want to listen to the people and discern how to best appeal to them. Managers have planned to become customer centric by profiling its customers and then human body the stores and provide products according to the profiles in the region. The cost driver associated is the cost of input factors because it req uires a radical reorganization and shift in employee mindset. Stores need to be reformatted and related products need to be bundled. The main value driver for this focus has been customer service.BestBuy has excelled at customer service because they are able to identify customer needs and appeal to their wants because of the unique profiles that have been created. The main cost driver for employment policies has also been cost of input factors because I imagine it has been costly to implement the rising annual company-wide surveys, a virtual discussion board, and one-on-one dialogue sessions. The main value driver for the employment policies is customer service. BestBuy has created distinctive techniques for company-wide communication that in turn provide better customer support.Managers now know what the consumers are thinking because the employees are able to share information with their superiors in an efficient way. The competition betwixt BestBuy, Amazon, Apple, and Wal-Mart has been fierce over the last several years. BestBuy has found itself to still be at the top of consumer electronics in the minds of its customers with 40% of the votes. However, BestBuy comes in 11th place in the Top 15 most valuable retail brands. Furthermore, Apple has recently made a large push in the race by arriver $2. 8 billion in sales in 2010 which puts them in third place behind BestBuy and Amazon.However, BestBuy is in last place according to share public presentation in 2010 and 2011. After looking at all of the different results and surveys I would say that BestBuy is right in the thick of things and battling for the top spot. Amazon may be more a valuable company but the consumers still view BestBuy as the leading consumer electronic company. One of the critical problems facing BestBuy is people coming into the store and testing the products and then leaving and buying the product elsewhere. I think that BestBuys strategy to become customer centered is a good strateg y.Many of the same products are sold by multiple companies, but if BestBuy can appeal to the segments and profiles of people coming into their stores then they can get people to buy the products in their stores. Identifying the profiles of people coming in is the first step and then being able to bundle products and arrange displays in an appealing way is a good strategy. If BestBuy continues to value its consumers I think they will find a way to sustain a competitive. After all, people want to feel important and be given what they need and desire.