Strategic Management

This paper explores the market trends and analysis of Best Buy in the retail industry. It analyzes the internal and external environment of the organization and recommends key developmental strategies. The paper also discusses the industry overview, competitor discussion, Porter's Five Forces, core competencies, SWOT analysis, strategy performances, financial performances, and recommendations.

Running head: STRATEGIC MANAGEMENT
Strategic Management
Name of the Student
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Author Note

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Introduction:
The modern business world is observed to experience a notable growth in the retail
sector (Rhodes & Brien, 2014). Many of the organizations, operating in the mentioned
industry are seen to flourish and achieve the desire growth in a significant manner. One such
organization in the retail industry of the United States is observed to be in the form of Best
Buy. The paper is focused in the elaboration of market trends of the retail industry. Apart
from that, the paper analyses the internal and the external environment of the chosen
organization. With a precise focus on the finding of the analysis, the paper also recommends
some of the key developmental strategies for the chosen organization as well.
Industry Overview:
The consumer electronics market of the chosen cuntry is expected to ghave a
significant growth in the coming years. The expected revenue that the chosen industry in the
year 2019 is 76998 million US dollars (Statista.com, 2019). Aprt from that, the revenue of the
chosen indusry is expecte to achieve a growth of 6.2% over the time span of 5 years starting
from 2019 to 2023 (Statista.com, 2019).
Competitor Discussion:
The major competitirs of the organiztaion are observed to be Walmart, Target
Corportation, Costco and Staples. The revenue of one of their fiercest competitors Walmart is
expected to be 514.415 billion US dollars and for Target Corportation, the sum of the revenue
is seeb to be 71.88 billion US dollars at the end of the 2017-18 finnancial year (Walmart.com,
2019). Costco had a revenue of 129 billion US dollars in the year 2017 and Staples is
observed to achieve 20.217 billion US dollars in he year 2016 (Costco.com, 2019).

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Porter’s Five Forces:
Threat of new entrants: Low
With the concerns regarding the infrastructural development and the significant
competition of the market based on the application of the competitive pricing policy, the new
organizations are seen to find it difficult to enter the market.
Threat of Substitution: High
With the almost equal stand of the organizations in terms of applying the low pricing
policy for the achievement of the larger customers and with the intention of producing quality
products in the cheapest rates possible, the above market leaders are providing notable
amount of options for the customers to choose from. Hence the threat of substitution for the
organizations is evaluated to be high.
Competitive Rivalry: High
The chosen business indusry is seen to be significantly competitive with the
representation of the organizations such as Walmart, Target Corportation, Costco and Staples
(Target.com, 2019). In addition to this, the basis of the compaetition is observed to be the
quality of the products and the achievement of the preferences of the csuomers through the
design of the products.
Bargaining Power of the Buyers: High
As it is pretty evident that the market leaders of the mentioned industry are able to put
their best efforts in competiting for the applicaion of the low pricing of the products even
after maintaining the desired quality of the products, the customesr are left with considereable
number of options to choose for purchasing the products.

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Bargaining Power of the Supliers:
The mentioned indsytry is seen to experience notably limited imapct of the suppliers
due to the achievement of the considerable number of the suppliers capable of produing
quiality materils, producimg the supply on timea long with the capability of producing
accurate amount of supply.
Internal Analysis:
Core Competencies:
The chosen organization is to have significantly strong brand awareness across the
globe which has the potential to provide comparatively more market limelight to the products
and the services of the chosen organization. Adding to this, the representation of the chosen
company in 1008 number of locations is significant in producing a global reach for the
products of the company. Apart from this, the excellence in the operations of the 125000
number of employees recorded in the year 2018 is seen to be significant in producing an
expressive market advantage to the chosen organization (Bestbuy.com, 2019).
SWOT Analysis:
Strengths:
The organization is seen to be notably strong in the reaching to the customers through
the effective usage of the online media and along with that, the presence of the company in
the regions such as China, Canada, Puerto Rico and Mexico is seen to be significant for the
chosen organization in generating larger amount of revenue (Bestbuy.com, 2019). Adding to
this, the improved skills and the competencies of 125000 number of employees of the
company is considered to be of great significance for the growth of Best Buy.

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Weakness:
The application of the effective penetration strategy for the high earning customers is
seen to be a major concern for the chosen organization. This is seen to affect the generation
of the revenue of the chosen company.
Opportunities:
The increment of the product chain of the company with a precise focus on the
lifestyle segment, improving the online media communication for attracting larger number of
customers and the usage of the better strategy for the penetration into the emerging
economies for achieving increased number of customers are observed to be the major
opportunities for the chosen organization (Pendry & Salvatore, 2015).
Threats:
The increment in the changes of the government policies, the increment in the labour
and employment changes and the potential of the companies in providing significantly tough
competition to the chosen organization are seen to be notable threats for the successful
business conduction of the mentioned business organization (Till, 2014).
Strategy Performances:
The organization is seen to employ low pricing strategy for the products and the
services that they offer to the customers. Adding to this, the urgency of the organization in
implementing the preferences of the customers in their design and maintaining a high quality
of the products are seen to be of great significance for the organization in better management
of the business conduction of the organization (Awadh & Saad, 2013).

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Financial Performances:
The application of the above mentioned strategies has notable impact of the
organization’s financial performances and that is pretty evident with the increasing revenue
of the organization which increased to 42.15 billion US dollars at the end of the 2017-18
financial year (Bestbuy.com, 2019). The company generated an operating income of 1.84
billion US dollars and a net income of 1 billion US dollars at the same period of time
(Bestbuy.com, 2019).
Discussion:
The organization has the potential to use their effective presence across the globe
along with the improved social media activities for the increment in the number of customers
and profit as well. However, the organization is seen to have an ineffective strategy for
penetrating the high earning customer group.
The increment in the product chain of the organization along with the formation of the
better strategy for the effective management of the business operations of the company will
be significant for the chosen organisation. On the other hand, the organisation is in need to
efficiently cope up with the increasing labour charges and the changes in the government
legislations for conducting their business in a sustainable manner (Barrientos, 2013).
Recommendations:
The chosen organization is recommended to have effective strategies for penetrating
the emerging economies and for penetrating the high earning groups in an efficient manner
for the increment in the generation of profit. Adding to this, the organisation is in need to
improve their social media activities in a more efficient manner for the effective

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communication regarding their new products to the customers of them. Adding to this, the
organization must keep an eye on the improvement of the quality in their products as well.
Conclusion:
On a concluding note, the chosen organization is expected to conduct their business in
a more efficient manner with the effective management of the concerns regarding the
increment of the labour charges, the changing legislations of the government and the
ineffective penetration strategy for the customers belonging to the high earning groups. Apart
from that, the effective usage of the social media will also be a key factor in the success of
the chosen organization.

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References:
Awadh, A. M., & Saad, A. M. (2013). Impact of organizational culture on employee
performance. International Review of Management and Business Research, 2(1), 168-
175.
Barrientos, S. W. (2013). ‘Labour chains’: analysing the role of labour contractors in global
production networks. The Journal of Development Studies, 49(8), 1058-1071.
Bestbuy.com (2019). Best Buy. Retrieved from https://www.bestbuy.com/
Costco.com (2019). Costco. Retrieved from https://www.costco.com/
Pendry, L. F., & Salvatore, J. (2015). Individual and social benefits of online discussion
forums. Computers in Human Behavior, 50, 211-220.
Rhodes, C., & Brien, P. (2014). The retail industry: statistics and policy. House of Commons
Library www. parliament. uk/briefing-papers/sn06186. pdf.
Statista.com (2019). Statista - The Statistics Portal for Market Data, Market Research and
Market Studies. Retrieved from https://www.statista.com/
Target.com (2019). Target : Expect More. Pay Less. Retrieved from https://www.target.com/
Till, C. (2014). Exercise as labour: Quantified self and the transformation of exercise into
labour. Societies, 4(3), 446-462.
Walmart.com (2019). | Save Money. Live Better. Retrieved from https://www.walmart.com/

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Bibliography:
Staples. (2019). Retrieved from http://www.staples.com/