Best Buy

Best Buy

Best Buy has been established as a retail shop since the late 1960s. The line of stores was initially expected to serve music lovers by providing albums and music electronics. However, in the rebranding the concept of focusing on consumer electronics was developed. The company has gotten a large consumer base as the electronics are of good quality. Despite the rise in the retailers in the nation, the company has occupied a niche market that has helped with the sustenance. The stability of the company in an era of one-day deliveries countrywide and only shopping is supported by some of the strengths in the company. The swot analysis indicates the aspects of the business, causing an increase in sales, the threats on the business, weaknesses, and opportunities for growth.

The strength of the company is the provision of consumer electronics, availability, and good customer service. The company has been able to consistently offer the latest and best consumer electronics in all its branches. The company has maintained a steady supply, thus ensuring the regular customers find all they need, such as electronics, videogames phones, and software. Best Buy is available to consumers with numerous branches across the nation. According to research done by Statista, “Best Buy had a total of 997 own name stores in operation throughout the United States as of February 2, 2019. Best Buy also operates a number of Pacific Sales stores and outlet stores, which, together with their own name stores, amounted to a total of 1,026 stores in the United States as of 2019.” The number of stores ensures a customer can access stores within the city or a minimum driving distance. The customer service in the stores is also good. The nature of their products requires knowledgeable employees on the products. The majority of the stores employees such as supervisors have knowledge of the goods; thus, the customers can be educated on similar products, thus choosing good brands and items for their households.

The weaknesses of the stores are based on warranties and limited profit margins. The reputation of the company has come under attack based on the validity of the warranties and the ability of the stores to honor them. Since the stores sell electronics, the devices need a grace period to ensure they can be returned for servicing and replacement in case they fail. In November 2018, a customer posted on the Best Buy forum page that, “My husband took it into the Eau Claire store today 11/13/2018 on his way to the doctor (we are retired) and was told they wouldn’t fix or replace it as it was as a result of normal wear and tear and a cosmetic issue.” The case was immediately supported by another client that claimed the company failed to honor his warranty too. The case of not honoring the warranty based on issues not presented to the client is one of the main weaknesses. Moreover, the company makes a minimal profit margin based on the cost of running a store that online retailers avoid. As a result, the stores have to compensate with increased costs in selected items, which threatens the stability of the company.

Best Buy stores have an opportunity to target online shoppers and popularity sales such as black Fridays. Best Buy, like other retail stores, has the opportunity to grow in the e-commerce industry. The adoption of e-commerce platforms by other companies such as ad Walmart has led to an increase in the sales and reach of the clients. Creating a sustainable system that ensures the electronics are delivered on time is effective in capturing a bigger market. Since the shopping desire for most households has reduced, reaching the people in their comfort zones will be better. Similarly, the profit margins will increase, notably in the increase of online platforms, as it lowers the cost of running the business. The company has an established brand thus can be effective in attracting an online shoppers fan club faster. Similarly, the company has the opportunity of holding profitable sales. According to a research conducted by Balance news site, the total amount spent by consumers on average in the black Friday and thanksgiving sales was $1,007.24 in 2018 which was 4.3% more than the previous year (Amadeo). The opportunity to increase sales in this period of the year should therefore be explored. Ensuring that the Best Buy deals are advertised and known to all the consumers will increase the chances of the company making more sales, thus stabilizing the finances.

The main threat of the company is the online electronic retailers and the constant change in technology. The online platforms have threatened the stability of the company. Walmart and Target’s online delivery, as well as the leading Amazon company, continue to offer the consumers the same products at lower prices and within the comforts of their homes. The competition has led to the loss of some genuine consumers that rely on online delivery, which continues to be more efficient. Moreover, the constant change in electronics threatens the company inventory. The change of mobile phones and tablets for instance leaves the company with a stock that is less desired by modern users. Moreover, the invention of new products, for instance, in the Apple line of products, results in the abrupt fall in prices of the previous version, this can result in losses.

The company has strengths of availability, customer service, and known product line; however, it suffers from the dishonoring of warrants and financial strain. Even so, the company has an opportunity it increases online and profitable sales, thus tackling the online and change in technology threat. Best Buy has been able to maintain the running of the shop despite rise in the competition. However, several changes can allow the stability of the company finances to be improved even further. Therefore, adjustment to the threats and weaknesses is critical for the company.