Best Buy Case Study
MKT2316
Section 315
Claude Lloyd
The Seven Marketeers’
Janick Lobb, Amanda Scobie, Shirley Mark-Stewart Menarick,
Liam Moorhead, Kristopher McMahon, Doug Barrowman, Jennifer McMullin
March 23, 2012
Table of Contents
Executive Summary ..................................................................................................................................3
Situation Analysis ......................................................................................................................................4
Assumption ................................................................................................................................................5
Central Problem .........................................................................................................................................5
Evaluative Criteria .....................................................................................................................................5
Alternatives ...............................................................................................................................................6
Analysis of Alternatives ............................................................................................................................9
Decision and Justification .........................................................................................................................11
Implementation ..........................................................................................................................................12
Appendices ................................................................................................................................................14
Bibliography ..............................................................................................................................................16
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Executive Summary
Best Buy is considered one of the largest consumer electronics retailers in North America and has stores all
around the world, with annual revenue that exceeds 50 Billion USD and a profit of 2.7 billion USD (Best Buy
(BBY), 2012). They have done well in adapting to the changing market of consumer electronics, but are still
facing plenty competition from Wal-Mart and other „Big Box‟ stores. In order to keep their stocks in the
market, they need to adapt and improve their available products and services.
The Seven Marketeers‟ are pleased to provide an analysis of possible ways to create Best Buy‟s stake in the
business-to-business market as well as increase their stake in the business-to-consumer, so that they can
compete with other consumer retail companies.
A situation analysis was conducted to better understand where Best Buy currently stands, and what can be
done to improve the company. The final conclusion where Best Buy has an excellent name and brand
association that will help create a clientele for a business-to-business venture. Also, by taking opportunities in
the development of a business-to-business program, it will help with possible threats to the company, where
the major threat being the competition from other companies.
Based on the situation analysis and research of the completive market segments, four (4) ideas were purposed
to Best Buy. These four alternatives were evaluated on specific criteria, and then one was chosen that would
best help Best Buy in the long run.
The recommendation for Best Buy is to expand the Best Buy‟s product line allowing businesses to purchase
items needed in their business with discounts given for their large amounts of purchases. Also to be equipped
with knowledgeable staffs to help businesses to pick the products that suit their company the best.
The benefit of this alternative is to create a one-stop-shopping experience that is easy and beneficial to
businesses. By implementing these alternatives, a detailed timeline is included, Best Buy will be able to
expand its business-to-consumer market stake and gain a sizable share in the business-to-business market.
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Situational Analysis
Internal Analysis
Strengths:

Strong Market Share of 16%

Name brand exclusivity called Insignia

Geek Squad – Installations for home offices and corporations/businesses

Specialty Stores – Mobile, Cannon Store, Movie Rental Kiosks, Home and Lifestyle

On all major social sites advertising company name and brand

Company product lines ex. Best Buy Credit Cards
Weaknesses:

Locations in major cities

Overpriced products

Employees are not completely knowledgeable about every product the company has to offer

No customer benefits

Limited Suppliers
External Analysis
Opportunities:

Exclusive brands

On-line advantages

Multiple business purchasers are also consumers
Threats:

Competition such as Wal-Mart, Future Shop, and Staples

Local Competitors

On-line companies that sell products at larger discounts (E-bay)

Apple Inc. although very independent sells to large corporations such as universities and
colleges.
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Assumptions
Assumptions as applied to Best Buy for this case analysis:

There is a spot in the market to introduce a new company to supply business equipment. This is an
enhancement.

Best Buy has no previous stake in the business-to-business market. This is a constraint.

It is currently financially feasible for Best Buy to start a new business-to-business cliental under the
Best Buy label. This is an enhancement.
Central Problem
Best Buy does not currently have promotional material directed towards potential business clients and our
objective is to create one.
Evaluative Criteria
Evaluative Criteria as Applied to Best Buy:
Criteria
Evaluated Criteria
1. Consumer Benefits/Satisfaction
0.35
2. Product Line Growth
0.30
3. Company Geography Growth
0.20
4. Employee and Growth Satisfaction
0.15
1.00
Consumer benefits/satisfaction was chosen because Best Buy does not have potential business clients
and does not benefit consumers who purchase in large amounts.
Product Line Growth was chosen because Best Buy does not offer office supplies and equipment.
Company Geography Growth was chosen because Best Buy‟s Locations are located only in major
cities.
Employee growth and satisfaction was chosen because some employees are not familiar with the
products that the company has to offer.
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Alternatives
Alternatives Criteria as Applied to Best Buy:
List of Alternatives as applies to Best Buy:

Market Best Buy as a business to business market.

Position Best Buy as the business purchaser of choice.

On-line.

Advance Best Buy product line into a department store.
1) Market Best Buy as a business to business market.


Primary Target:
o
Small to medium size businesses
o
Buyers who will buy office products in bulks
o
Males/Females between the ages of 20-55
Positioning Statement:
Best Buy is an electronics store that provides high quality products at low cost for business customers
who need promotional products for their businesses. Compare to a store like Wal-Mart, Best Buy‟s
large selection of reliable products and staff offers superior service.

Marketing Mix:
Product

Business and office products at low cost when purchasing large amounts of each
product for small to medium size businesses.
Place

Best Buy offers online service for businesses or an in store section.
Promotion

Best Buy will utilize media, such as the internet and TV, to advertise their business to
business product line.
Pricing
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
Prices will be reducing at a 10% interval for large purchases
2) Position Best Buy as the business purchaser of choice.


Primary Target:
o
Business to Business
o
Small to medium businesses that need computers and equipment.
Positioning Statement:
The new explored side of Best Buy is a positive environment to purchase large amounts of
supplies that help small to medium size businesses receive the required tools and services that
need the necessary resources on electronics and appliances. Opposed to Staples, Best Buy‟s
employees and „geek squad‟ will be please to help the clients at any time necessary.

Marketing Mix:
Product

Best Buy offers office equipment and supplies for small to medium size businesses
Place

Service is received at the given business‟s placement
Promotion

Best Buy offers assistance service in store and out of the store
Price

Businesses receive discounts for large purchases at intervals of 50 products
3) On-line

Primary Target:
o
Business to business
o
On-line shoppers
o
Bargain shoppers
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
Positioning Statement:
The on-line shopping is a great service offered by Best Buy that simplifies shopping for online shoppers and businesses that need large and/or quick orders. Not like other competitors
like Wal-Mart, Best Buy‟s website will offer a wide variety of electronics and office
equipment.

Marketing Mix:
Product

Best Buy offers large orders to businesses to be completed on website
Place

Best Buy‟s website provides at home/office ordering from on-line
Promotion

Best Buy uses social media to advertise to businesses
Price

When purchasing on-line additional discounts are available, while large orders
discounts automatically appear.
4) Advance Best Buy product line into supermarket.


Primary Target:
o
Business to business
o
Customers
o
Government
o
Producers
Positioning Statement:
The newly restructured Best Buy department store will be a one stop shop experience that will
offer all products that is needed in one location for businesses and customers who need
electronics and all necessary appliances. In opposed to Wal-Mart, Best Buy‟s department
store will have employees who are knowledgeable in their field of work.

Marketing Mix:
Product
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
Best Buy offers all electronic equipment needed to run a business and/or office
Place

Best Buy offers there affordable products at any of their “big box” retail stores in
major cities
Promotion

Best Buy utilizes signs, busses, and flyers for advertising to promote their business to
business store
Price

The competitors price will be matched if necessary
Analysis of Alternatives
Criteria
Weighted
Value
Consumer
0.35
Benefits/Satisfaction
Alt. 1
(Market Best
Buy as
BUSINESSTOBUSINESS
market)
0.35(6)=2.1
Alt. 2
(Position Best
Buy as the
business
purchaser of
choice.)
Alt.3
(On-line)
Alt.4
(Advance Best
Buy product
line into
supermarket)
0.35(7)=2.45
0.35(7)=2.45
0.35(4)=1.4
Product Line
Growth
0.30
.30(7)=2.1
0.30(5)=1.5
0.30(3)=0.9
0.30(9)=2.7
Company
Geography Growth
0.20
0.20(4)=0.8
0.20(2)=0.4
.0.20(9)=1.8
0.20(6)=1.2
Employee and
Growth Satisfaction
0.15
0.15(5)=0.75
0.15(4)=0.60
0.15(2)=0.30
0.15(6)=0.90
Total
1.0
5.75
5.45
5.45
6.2
***Scale rates from 1-10, 1 being not related to criteria at all. 10 being strongly related to criteria
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Advantages and Disadvantages
Alt.1 Market Best Buy as a Business-to-Business market
Advantages:
It will bring Best Buy‟s business side into the light and in full view, which leads to a product line
expansion, because of greater demand, increases sales.
Disadvantages:
It will increase costs, retraining employees with new products and services. Penetrating the businessto-business market is a discerning factor.
Alt. 2 Position Best Buy as the business purchaser of Choice
Advantages:
It will create more relationships with small businesses and expand its clientele. It will give customers
with the most satisfaction possible, and will also increase sales in the short-run.
Disadvantages:
It does not focus on major companies, just small to medium businesses. Best Buy must expand its
product line to meet the demand of being the clear option. The training for new employees for the
positions will be done.
Alt.3 On-Line
Advantages:
It will be very convenient and easy for the customers. It will also bring in international companies. It
will be safe and secure.
Disadvantages:
There will be possible system failures and technological weaknesses, the consumer dissatisfaction
may occur due to not actual seeing the product in front of them.
Alt. 4 Advance Best Buy product Line into Supermarket
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Advantages:
It will expand into the consumer market, then into government and producers market. It will give the
opportunity to dominate the business-to-business market, and gain market share in the business supplies
market.
Disadvantages:
Securing government contracts difficult and must lower prices to get in. It would have to expand current
locations to keep up with new supplies; it will also be very costly in renovations.
Decision and Justification
“The Seven Marketeers‟” suggests that Best Buy implement alternative 4 – Advance Best Buy product line
into department store, to help solve the central problem.
Having many services attracts more than just the average business consumers. The lack of customer care must
be altered in order for Best Buy to surpass other electronic stores in the market. Having a very user friendly
website will encounter businesses getting „the word out‟ in the business consumer community.
Prices of electronics are quickly decreasing and Best Buy‟s main competitors are capable of keep up with the
price reductions. As products prices decreases, Best Buy must keep up with the most up to date products in
order to increase its revenue. Due to the alternatives said, Best Buy will be able to spend this extra revenue on
creating better services, with a possibility of expanding its geographical locations.
This alternative provides the best overall increase in the company‟s evaluative criteria. Employee and growth
is a little short but will be able to make small adjustments. This best supports the company‟s long term
objectives and mission because it will provide the most growth for products and expand its market shares.
Unfortunately the employee satisfaction will not be able to increase as much as it should, which could harm
the increase in sales, if employees are feeling they do not get enough. Keeping the employees happy will alter
an atmosphere that will welcome local businesses, and also have the employees to be more willing to assist
and connect with the business consumers.
The benefits that outweigh the disadvantages with this alternative, for instance it provides an increase in
percentage Best Buy‟s product growth, giving the customers the lastest equipment for their business.
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Company geography growth is not high, which saves millions on construction expenses and put those profits
towards advertising or improving our purchasing and selling ways. Best Buy will have one of the best
employee growths which will reflect strongly towards other businesses making them happy with their
purchases.
Implementation
As stated previously, the alternative of choice is advancing Best Buy into a department store. This means
making Best Buy the purchaser of choice for not only privately owned businesses but also the government
sectors and industries. What Best Buy needs is something to give to their potential business clients. They need
a package that draws in businesses and other markets, which is something Best Buy does not currently have.
Product
Best Buy must develop their product line that will also suit businesses and industries. Clients do not only want
electronics but want the accessories and furniture to go with it. Best Buy must develop its product line more
convenient.
Place
Best Buy must put the business solution packages to its locations, and also to expand its markets. They have
to have all business solution inventories on hand and in stock. This should be done in order to market to
businesses.
Price
Price is one of the deciding factors in the department store that Best Buy should expand to. Given that the
government takes the lowest bid from tenders, Best Buy has to be the lowest bidder with a great offer good
that also have good quality products.
Promotion
Best Buy has to create a “business solutions package” to promote the business-to-business side of Best Buy.
This package will include products that Best Buy carries, services they do, with purchase discount
information.
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Best buy must implement the following steps to advance into the supermarket:
1. Reinvent business strategy. Best Buy has to rethink and reinvent its way of doing business, shifting
from business-to-consumer, to business-to-business clientele.
2. Marketing Research. Best buy has to research the department store that it should enter to. The
government market and industrial market is not the same as privately owned small and medium sized
businesses.
3. Product and service changes. To expand into these markets Best Buy must change its products and
services to sell more than electronics, but office furniture, supplies,
4. Penetrate into the supermarket.
Appendix A and B. has the detailed timeline
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Appendix A
First Quarter Timeline
Steps
What
Who
Where
When
Why
1.
Reinvent Best Buys way
of thinking and make it a
business to business
powerhouse
Head of
marketing
department
Best Buy
headquarters
January 2
2013
To become a
business to
business company
2.
Research the supermarket
that Best Buy is entering
into
Head of
research and
development
department
Best Buy
marketing
department
January 15
To gain
background
knowledge of
industries and
governments
buying processes
3.
Develop Products and
services
Research and
developers
Research and
development
department
February 1
2013
To sell the
products and
provide the
services to a
different buyer
4.
Begin promoting Best
Buy as a business to
business company.
Marketing
department
Marketing HQ
March 3
Create a huge
marketing
campaign to
advertise Best
Buys business
solutions.
2013
2013
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Appendix B
Second Quarter Timeline
Steps
What
Who
Where
When
Why
1
Mass produce the
business packages
Marketing
Department
Marketing HQ April 4 2013
The more business
packages created,
the more business
Best buy will
attract as clients.
2
Distribute packages to
businesses, government
agencies and industrial
headquarters
Marketing
Department
Businesses
that are
potential
customers.
April 20 2013
Give the
businesses the
packages that will
provide them with
solutions with all
their business
needs
3
Bring out new products
and a new service that
will grab businesses
attention
Research and
development
department
Research and
development
department
HQ
April 28 2013
With new
products, comes
new interest in the
company, it hooks
in potential clients.
4
Enter the supermarkets
BestBuy
president
Government
markets, and
industries.
May 1 2013
To gain a market
share, and
competitive
advantage in
governments and
industries.
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