Geek Squad: A Case Study
Lenora M (Summary, Questions 1&2), Ashlyn N (Questions 3&4), Julia S (Summary, Presentation)
As technologies continuously evolve and advance around us, more and more people are
beginning to experience difficulty keeping up with these changes. Computers, cell phones, and
televisions are doing more things than we ever thought possible: phones that play videos,
televisions that can be hooked up to your computers as a second monitor, and gaming consoles
that not only play games, but also DVDs and Blu-Ray discs. All of these changing technologies
are very difficult for the average person to understand, thus making computer help services a
critical service in the electronics buying experience.
On June 16 1994, with just $200, Robert Stephens founded what we know today as the
Geek Squad. Stephens saw this demand for electronics help, and quickly realized that people
will pay a lot of money for the convenience of not having to read lengthy owner’s manuals.
In 2002, Best Buy purchased Geek Squad. They saw an opportunity for major company
growth, as people were returning electronics simply because they were unfamiliar with the
technology. Today, every Best Buy store has a Geek Squad inside, available for 24 hour help.
Geek Squad became part of the electronics purchase. Customers could now buy electronics,
give them to Geek Squad to set them up to the customers’ liking, and take them home hasslefree. Having Geek Squad as part of the purchase eliminates the need for customers to hire a
third party to help with installing software, removing viruses, and the like.
If we take an environmental scan as means to determine the demand for services such
as the Geek Squad, it can be easily justified to have this service. Social factors, such as the need
to have the latest technology, means that people will keep buying new products. For example,
Apple has released 5 versions of the iPhone since 2010: iPhone 4, iPhone 4s, iPhone 5, iPhone
5c, and iPhone 5s. These constant changes in technology prove that Geek Squad is a valuable
service that will continue to be an asset in the future.
Questions:
1. What are the key environmental factors that created an opportunity for Robert
Stephens to start the Geek Squad?
Social trends, cultural changes, and electronic social communities all contributed to the
need for advanced technology, which in turn created the need for Geek Squad. Social
media is a huge part of society today, especially within Generations X and Y, making the
latest technology an asset. Smartphones play a significant role in social media, as social
platforms such as Twitter, Facebook, and LinkedIn are becoming increasingly important
means of communication, as well as social activism. New technology, while marketed as
user-friendly, is sometimes hard to understand. Services such as Geek Squad assist users
and make the transition into new electronics a smooth one.
The baby boomers are also a target market for Geek Squad because they did not grow
up with new technology like younger generations, making technology even more
difficult to understand. Geek Squad explains technology and its uses in an easy to follow
manner. Geek Squad also helps with diagnosing problems such as viruses, trojans and
spyware, as well as routine computer maintenance.
2. What changes in the purchasing patterns of (a) all consumers, and (b) women
make the acquisition of Geek Squad particularly important for Best Buy?
(a) Consumers today expect great products, as well as great service. When Best Buy
experienced a high rate of returns on electronics, they analyzed why. Their findings
indicated that people simply did not know how to use their newly purchased
electronics. Best Buy took this as an opportunity to broaden their services. Best Buy
acquired Geek Squad in 2002, and included the service as part of consumers’
purchases. Having Geek Squad increased sales while decreasing return rates.
(b) Purchasing patterns among women are also changing. Women generally expect
personal service during the purchase and installation process, which is exactly what
Geek Squad offers. According to the Consumer Electronics Association, women are
expected to outspend men in the near future. Since women expect the Geek Squads
services and are expected to buy more electronics than men, it only makes sense
that Geek Squad exists and continues to grow.
3. Based on the case information and what you know about consumer electronics,
conduct an environmental scan for Geek Squad to identify key trends. For each of
the five environmental forces (social, economic, technological, competitive, and
regulatory), identify trends likely to influence Geek Squad in the near future.
There are many trends in social forces likely to influence Geek Squad in the future. The
first thing to take into consideration is the changing values and attitudes of our culture.
This has led to the trend toward value consciousness; there is now a need for the best
possible quality and performance of any given product that consumers own. This is a
positive trend for Geek Squad because as soon as a computer breaks down, or is not at
peak performance, there is a need to have it fixed immediately. Changes in the
population are likely to have an impact as well. There has been a significant shift in the
Canadian population from rural areas to urban areas. Not only is the use of technology
more popular in urban areas, but it makes it easier for marketers to reach a larger
audience all at once. On a similar note, Canadians are becoming more experimental. We
are more willing to try new things and new experiences, this includes technology. The
more people experimenting with technology means more people will need assistance
with it.
Of course, Geek Squad along with all other businesses, will be influenced by economic
forces. It does not matter how good the service is if people do not have money to use it.
Business will decrease in a recession and increase in a booming economy. Companies
such as Geek Squad may be positively influenced by certain microeconomic trends such
as how people are using their disposable and discretionary income. This is because more
and more people are classifying their technological devices as “necessities” rather than
“luxuries.”
Technological forces will most likely have the biggest influence on Geek Squad in the
future. The internet has become an integral part of the lives of Canadians. There are
always new products on the market for consumers to learn about. High – definition
televisions, products with built in internet, and the general trend toward entertainment,
computers, phones, etc. are just a few examples. With these new products comes new
problems to fix; viruses, crashes, updates, etc. creating more business for companies
like Geek Squad.
Competitive forces challenge businesses to stay on top of their game as far as meeting
consumer’s needs. If needs are not met, consumers are quick to look elsewhere. As
Walmart and Dell began to compete with Best Buy, new services such as in home
installation were needed to add value for customers. Geek Squad will most likely be
faced with “pure” competition, meaning other companies have a similar service. For
example Circuit City has introduced its own computer support service called Firedog,
and Dell has introduced Dell-On-Call. However, their biggest competition may be from
small businesses. Currently 98 percent of all businesses in Canada are small businesses
and many people choose independent installers over large companies.
Regulatory forces influence the marketing and broader business decisions for any
company or organization. Regulation consists of restrictions placed on companies to
protect them as well as consumers, and to ensure fair business practices. The regulatory
surroundings for copyrighted materials such as movies, music and software continue to
change. It is Geek Squad’s responsibility to monitor these changes and ensure that its
services meet the terms of the current laws.
4. What promotional activities would you recommend to encourage consumers who
use independent installers to switch to Geek Squad?
Geek Squad has had extraordinary success, but there are still ways in which they can
grow as a company and attract more consumers to use their services. One way to do so
is to literally expand their business and find additional locations. Broadening their
business will only make the name Geek Squad more popular thus inviting more
consumers. They are already testing new locations in some FedEx/Kinko stores and in
some Office Depot stores. Another approach Geek Squad has considered is creating
homes designed for the newest consumer electronic products. Best Buy has already
partnered up with home builders to install high sped cables and networking equipment
in homes, which can be later used by Geek Squad agents to create ideal computer and
entertainment systems. In addition to focusing on the actual work that they do to
encourage new consumers, Best Buy has also focused some attention on its employees
to set them apart. They have created a “results only work environment” in which there
are no fixed schedules or mandatory meetings. This was done in hopes of keeping
productivity as high as possible, consequently keeping the customers happy.