MGT 509 - Best Buy Case Study: Strategic Analysis & Policy Review

This case study provides a comprehensive analysis of Best Buy's business policies and strategic decisions. It begins with an industry segment analysis, highlighting the attractiveness of the high-quality segment, followed by strategic group mapping to position Best Buy among its competitors. The minimum segment success factors for the high-quality segment are identified, emphasizing technology, distribution, marketing, skills, organizational capability, geography, and service. A VIRO (Value, Inimitability, Rarity, Organization) analysis assesses Best Buy's resources and capabilities, determining their competitive advantage. The study also addresses sustainability issues related to e-waste, energy consumption, and hazardous materials, proposing measures for improvement. Finally, a stakeholder analysis identifies key stakeholders and their impact on the organization, concluding with a summary of Best Buy's strategic focus on innovation, value-driven business, and sustainability.

BUSINESS POLICY
REINVENTING BEST BUY:
Case Study of Best
Buy

INTRODUCTION
• Business policy defines the roles and responsibility of top-level
management, which influence organizational decision making process
and organizational success
• The presentation will evaluate the business policies of Best Buy Company
• Best Buy is an American multinational consumer electronics corporation
• The presentation will present the Minimum Segment Success Factors,
VIRO Analysis, Sustainability Issues, Stakeholder Analysis to be
implemented in the organization

BEST BUY INDUSTRY SEGMENT
ANALYSIS
• The most attractive segment is the high quality segment and high
efficiency segment
• The least attractive segment is the followed by low quality and high price
(Wells & Ellsworth, 2017)
• The potential entrants in the attractive segment with high quality

STRATEGIC GROUP MAP: BEST BUY
(NOW)
Low Quality High
High Price Low
Best Buy
Circuit City
Walmart
HHGregg
Amzon

STRATEGIC GROUP MAP: BEST BUY
(IN 5 YEARS)
Low Quality High
High Price Low
Best Buy
Circuit City
Walmart
HHGregg
Amzon
Best Buy
Amzon

BEST BUY: HIGH QUALITY SEGMENT
MINIMUM SEGMENT SUCCESS FACTORS
• Technology Related: Use of most advanced technology in the electronic
products
• Distribution Related: Use multichannel distribution strategy for enhancing
sales volume (Wells & Ellsworth, 2017)
• Marketing Related: Training to the employees for better store experience
of the customers

BEST BUY: HIGH QUALITY SEGMENT(CONTINUED)
MINIMUM SUCCESS FACTORS
• Skills Related: Use best sales experts for effective store sales facility
• Organizational Capability: Work with vendors for innovation and driven
service
• Geographic: More focus in international business success
• Service Related: More informative interaction with the customers within
the physical stores (Wells & Ellsworth, 2017)

VIRO ANALYSIS
Resource/
Capabilities
Valuable Inimitable Rare Organized Competitive Advantage
Wide Distribution
Network
Yes Yes Yes Yes Sustained Competitive Advantage
Leading Edge
Technology
Yes No Yes Yes Competitive Parity
Innovation Yes Yes Yes Yes Sustained Competitive Advantage
Unique Vendor Groups Yes Yes Yes Yes Sustained Competitive Advantage
International Growth Yes No No Yes Temporary Competitive Advantage
Strong Online Sales Yes No No Yes Temporary Competitive Advantage
Competitive Pricing Yes Yes No Yes Competitive Parity
Highly Skilled Store
Staffs
Yes No No Yes Temporary Competitive Advantage
Increased Stock in
Stores
Yes Yes Yes Yes Sustained Competitive Advantage

VIRO ANALYSIS (CONTINUED)
Wide Distribution Network
• Maximize multichannel Product
and Service Delivery (Wells &
Ellsworth, 2017)
• Customer convenience through
smooth delivery of product
• It will lead to sustained
competitive advantage over the
rivals
Leading Edge Technology
• Early adopters are coming to Best
Buy
• Best Buy could access to new and
innovative technology
• However, such technology is not
inimitable and it can create only
competitive parity

VIRO ANALYSIS (CONTINUED)
Innovation
• Launch more innovative and value
driven electronic products
• Customers can avail the
innovative electronic products on
both the website and physical
store of Best Buy
• Innovation can foster sustained
competitive advantage over rivals
Unique Vendor Groups
• Investment made by vendor partners
in the store will increase stock of
variety of products
• Vendor support will help in collecting
unique electronic products (Wells &
Ellsworth, 2017)
• Unique vendor groups are directly
responsible for fostering business
innovation, which can lead to
sustained competitive advantage

VIRO ANALYSIS (CONTINUED)
International Growth
• More focus will be given on
international growth of business
• However, international growth is
not inimitable and not rare, which
can lead create only temporary
advantage over rivals
Strong Online Sales
• Best Buy will give strong focus on
enhancing online sales over e-
Commerce companies
• However, online sale is not
inimitable and not rare, which can
foster only temporary advantage
over rivals

VIRO ANALYSIS (CONTINUED)
Competitive Pricing
•Competitive pricing will keep
the price of consumer
electronic products low
•Best Buy will clear the
misconception of the customers
regarding the competitive
pricing
•Such pricing is not rare in the
market, which can only lead to
competitive parity
Highly Skilled Store
Staffs
•Best Buy will employ highly
skilled employees in the stores
for more informative interaction
with the customers
•Such skilled employees are not
inimitable and not rare in the
market, which can only lead to
temporary competitive
advantage
Increased Stock in
Stores
•Best Buy will increase the
stock of electronic products in
the physical stores for
increasing store sales volume
(Wells & Ellsworth, 2017)
•It can lead to sustained
competitive advantage over the
retail rivals