best buy consulting presentation -- badm 4801 case competiton
TRANSCRIPT
Best Buy, Inc. Ohhhhhh(BBY)
November 13th, 2015
The Team2
Molly BockBBA, Marketing & [email protected]
Carlos LarreateguiBBA, Finance & [email protected]
Kevin ConnellBBA, [email protected]
Veronica BuzaBA, [email protected]
Victor BitarBBA, [email protected]
Roadmap3
Core Challenge
Core Solution
Options
Idenfity Concerns
Recap and Conclusion
Company Background
Internal & External Company Analysis
4
Setting the stage.
Recommendation in a Nutshell5
In order to effectively compete in a low costindustry, Best Buy should continue theirdifferentiation strategy by eliminatingunnecessary costs and investing in corecompetencies.
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Let's jump in.
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Core Challenge
Core Solution
Options
Idenfity Concerns
Recap and Conclusion
Risk Analysis
Company Background
#1 Electronics Retailer
2014 sales of electronics in billions of USD; Source: Twice Top 100 CE Retailers List
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AmazonWalmartBest Buy
30
22
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Revenue Mix
Percentage of revenue allocation by product offerings; Source: Best Buy 2015 10-K
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OtherServicesAppliancesEntertainmentComputing andMobile Phones
ConsumerElectronics
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47
97
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Costs: Operating Margin
Source: Best Buy 2015 & 2013 10-K
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2012201320142015
3.59
2.7
0.28
2.14
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Core Challenge
Core Solution
Company Background
Internal & External Company Analysis
Recap and Conclusion
Idenfity Concerns
Options
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WeaknessesStrengths
Internal Company Analysis
Internal Analysis13
End to end services
Multiple Channel Selling Strategy Customer Centric Business Model
Brand Loyalty
Strengths
Subject to economic volatility
Heavy reliance on few suppliers
Changing customer preferences make it difficult to (1) adequately train employees, and (2) havecurrent inventories
Showrooming
Weaknesses
Diverse product breadth
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ThreatsOpportunities
External Company Analysis
External Analysis15
Store-within-a-store system
Threats
Vertical Integration from competitors/suppliers
Pressure to keep margins down to remain competitive
Opportunities
In store classes
Geek SquadWebsite Enhancement
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Options
Idenfity Concerns
Recap and Conclusion
Internal & External Company Analysis
Company Background
Core Solution
Core Challenge
Concerns17
Suppliers verticallyintegrating
Purchasing trends Capital intensive growthmodel
Technology developmentcycle
Competing as a differentiator in a low cost industry
Increasing trend towards E-Commerce vs. decreasing
trend from brick and mortarReliance on few suppliers
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Idenfity Concerns
Core Challenge
Core Solution
Company Background
Internal & External Company Analysis
Recap and Conclusion
Options
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How to compete as a differentiator in acompetitively low cost industry
Core Challenge
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Options
Idenfity Concerns
Recap and Conclusion
Internal & External Company Analysis
Company Background
Core Solution
Core Challenge
Broad Solutions21
Strengthen online customer service platform
Enhance corporate culture
Improve relationships with suppliers
Invest in employee development
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Core Challenge
Core Solution
Company Background
Internal & External Company Analysis
Recap and Conclusion
Idenfity Concerns
Options
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Core Solution
Use savings generated by cost cuttingmeasures to invest in employees
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Cutting costs.
Leveraging Store within a Store Concept25
Increase supplier reliance on Best Buy
Increase ability to sell luxuryconsumer electronics
Gain favorable pricing from suppliers
Allow for rapid brick andmortar expansion on a
national level
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Investing in employees.
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Improve employeeperformance
evaluationImproved quality
Employee training
Enhance employee benefits and incentives
Speed of training to keep up withproduct cycle and consumer
preferences
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Impact.
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Attract and retain talent
Maximize Shareholder Wealth
Improve Customer Engagement Decrease Supplier PowerIncrease Brand Loyalty
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Company Background
Risk Analysis
Recap and Conclusion
Idenfity Concerns
Options
Core Solution
Core Challenge
Wrapping up31
To compete in a low cost industry as a differentiator, BestBuy should continue to cut costs and further invest in corecompetencies
If executed properly, shareholder wealth will be maximized
Best Buy should generate savings by forming businesspartnerships through store-within-a-store platform
Best Buy should then use the generated savings to invest inemployee development and corporate culture
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Questions?