Shopping has become a part of everyday routine for a lot of Americans. Large retail stores line major roads of American towns and cities, enticing consumers with attention grabbing advertisements for products which vary from everyday necessities, to flashy toys which promise hours of entertainment. While many stores carry these entertainment products, like TV’s, computers, gaming systems, and mp3 players, there is one company that stands above the rest as the “dominant technology and entertainment retailer” (taitsubler.com) in america – Best Buy.
Having a gross income well over $50 Billion in fiscal year 2011, along with a net income of $1.227 billion, Best Buy Co., Inc holds one of many largest market shares in the consumer electronics industry, since they should. Best Buy, founded in 1966, is electronics merchant, whose stores are chock full of expensive electrical toys and tools. Stores are divided into departments, each department specializing in a kind of technology. Each store features a Home Theater, Computer/Tablet, MP3/iPod, Gaming, Digital Imaging, Car Electronics, Music/Movies, Appliances, and Mobile (cellular phone) department, where products as well as their accessories are saved to display.
Best Buy, striving as a one-stop shop for customers, also provides services to visit with their products. Through partnerships with companies like Comcast, Dish Network, Time Warner, and Clear Wireless, customers can leave the Best Buy hours with connections to the web, cable or dish TV, and phone services. From the acquisition of Geek Squad in 2002, Best Buy can also be in a position to offer repair and installation services on many of its wares, including TV’s, computers, and appliances. In reality, Best Buy now brands most of its warranties and installation services using the Geek Squad name, and encourages customers to utilize their in-store service counters, where they can talk one on one using a Geek Squad agent about the issues that they are experiencing making use of their technology.
Geek Squad is not the sole brand to be owned by Best Buy. Product brands like Dynex, Insignia, and Rocketfish are common properties of Best Buy. These brands are mainly manufacturers of product accessories like wireless mice (for computers), speakers, cables and cases, but both Dynex and Insignia are manufacturers of larger products, like TV’s. Having “house brands” is beneficial for that company since they cause higher margins on those products, and Best Buy has greater control of product inventory levels and greater flexibility in the creation of new releases to fit with market trends. For instance, Best Buy could reply to the release from the IPad by creating several IPad accessories, like cases and stands, through its brand Rocketfish. Not merely did consumers benefit having a greater range of accessories to pick from, but additionally from your lower prices that arose because of competition in the accessories market.
Other brands related to Best Buy are Magnolia, a branch of the property Theater department, by which high end TV’s and speakers can be bought, for all those customers that desire above average performance from their TV’s and speaker set-ups, and Napster, which, until earlier this year, was an effort by Best Buy to get in the music streaming and download market. (Napster was recently sold to Rhapsody to have an undisclosed amount.)
Best Buy has already established increasing difficulty with domestic expansion also, facing stiff competition off their retailers, such as Wal-Mart and Target, that have recently put forth efforts to grow their electronics selections at increasingly huge discounts, and in addition from online retailers like Amazon.com and Newegg.com, who are able to offer large selections exceedingly lower prices because of the low overhead. Best Buy stores happen to be called “Amazon’s showcase” by consumers who make use of the blue and yellow retailer as a ueukql to see and understand products in close proximity before ordering them from another company online.
Ex Best Buy CEO, Brian Dunn, however, has an optimistic look at his company’s strategy for rivaling these others. Bestbuy.com is better Buy’s solution to online competitors, and contains been called “extremely successful” by Dunn. It also has an advantage over Amazon and Newegg; the merchandise ordered from Bestbuy.com may be found in store, which eliminates the cost of shipping. 40% of online orders are acquired in store, based on the article Best Buy Gets Squeezed which signifies that consumers do enjoy having this option offered to them. Furthermore, items ordered online could be returned to brick and mortar locations, which consumers find convenient and reassuring. “Down the road, physical stores alone will never be enough. Digital alone is definitely not enough. How they combine is exactly what really matters,” says Dunn (Best Buy Struggles with Global Ambitions).