Critical Success Factors and Balance Scorecard for Best Buy

This report analyzes the critical success factors (CSFs) of Best Buy, a leading consumer electronics retailer. The study begins with a company overview and a SWOT analysis, identifying strengths like brand loyalty and weaknesses such as price reduction pressures. A balanced scorecard is then presented, outlining financial, customer, internal business process, and learning & growth perspectives. The report emphasizes the importance of CSFs in achieving organizational success, focusing on revenue growth, customer satisfaction through improved accessibility, employee engagement, and internal business process innovations. The analysis includes an evaluation of Best Buy's segments, particularly its 'Renew Blue' program, and how these strategies contribute to achieving the CSFs. The report concludes by highlighting the significance of CSFs and the balanced scorecard in measuring organizational performance, supported by references and interview responses from Best Buy employees.

Running head: CRITICAL SUCCESS FACTORS OF BEST BUY
CRITICAL SUCCESS FACTORS OF BEST BUY
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1CRITICAL SUCCESS FACTORS OF BEST BUY
Table of Contents
Introduction......................................................................................................................................2
Company overview..........................................................................................................................2
SWOT analysis................................................................................................................................2
Balance scorecard............................................................................................................................2
Critical success factors....................................................................................................................2
Evaluation of segments in order to achieve the CSF.......................................................................2
Conclusion.......................................................................................................................................3
References........................................................................................................................................4

2CRITICAL SUCCESS FACTORS OF BEST BUY
Introduction
Critical success factors refer those activities that need to be accomplished in order to
achieve success for the organization (Netland, 2016). Businesses use these factors in order to
ensure that they achieve their organizational success by laying down the plans, objectives that
needs to be accomplished by the company and incorporating the same in the marketing plan. The
company chosen for the purpose of the study is Best Buy U.S. the aim of the study is to highlight
the importance of having critical factors for becoming successful (www.bestbuy.com, 2019). The
study will discuss about the chosen organization, SWOT analysis for the same, a balanced
scorecard will be prepared for the company to understand the critical success factors, a
discussion on the CSF and an evaluation of the organization in order to achieve the CSF.
Company overview
The Best Buy Company is a multinational company of America providing consumer
electronics and has its headquarters in Minnesota. It belongs to the retail industry of consumer
electronics. The company’s major products include consumer electronics and it operates across
different other countries. The company’s core values include- unleashing the power of its people
through creating a positive attitude in them which makes them ready to face all challenges, the
company believes in integrity and humility and also in maintaining proper work life balance and
also letting them have a friendly workplace.
SWOT analysis
Strengths Weakness

3CRITICAL SUCCESS FACTORS OF BEST BUY
Brand loyalty
Market leader
Wide ranges of products
Easy customer accessibility to products
Warranty policy
Service plans
Brand awareness of there in many places
High competition
Price reduction
Scandals and controversies
Threats
Online competition is high
Auction sites
Government regulation variations
Many competitors in US.
Opportunities
Increase global accessibility
Newer stores
New technologies
Online media and other social media marketing
techniques
Figure 1: SWOT analysis of Best Buy
Source: (Created by author)
From the above chart, SWOT analysis of Best Buy can be understood. The major
Strengths of the company is that it is a market leader of the electronics industry. The company
enjoys brand loyalty of its customers by becoming the most bought and best bought brand. The
company reaches its customer easily through media. The brand provides a wide variety of
products to its customers such as Modal, Rocketfish and others. The main weakness is that it is
not popular outside USA and it faces high competition, another major drawback is that it places a

4CRITICAL SUCCESS FACTORS OF BEST BUY
lot of pressure on the finance department company for reduction of its prices. Its opportunities
includes the company can start its operations in different companies, the company can increase
its number of stores, through its online media it is able to attract new customers and others. The
main threats of the company include- there is tough competition online, in case of variations in
the government regulation there can be a negative impact on the company.
Balance scorecard
Figure 2: Balance score card
Source: (Muda, Erlina & Nasution, 2018)
The balance scorecard is a performance measurement tool used by organizations in order
to keep a record of all the activities carried out by the staff and to control the same and
continuous monitoring of the consequences of the same (Aquilani et al., 2017). There are four
main parts of a balance score card- financial that looks after the return on investment, growth in

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sales and others, the customer area discusses about satisfaction of customers, retention and
others. The internal business process includes measuring the innovations in the organizations,
operations of the organization, after sales services and others. Learning and growth part
discusses about the measurement of people and systems. The CSF for the company is to
improve its shareholders relationships and that is how it has been able to get better investments
in the year 2019 and it has started many programs to improve their relationships with the
shareholders and through better dividends rates and it is having various financial targets.
Figure 3: Return to shareholders
Source: (www.bestbuy.com, 2019)
The company has the critical success factor of improving customer satisfaction through
improving the accessibility to the customers and improving their convenience through various
services. The company has a critical success factor of innovating new products through robust
internal business process and the company considers its employee as a major part of success so
they enhance the employees satisfaction through various employee retention programs.

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Critical success factors
Figure 4: Balance scorecard
Source: (Lubis, Torong & Muda, 2016)
Financial perspective refers to the way shareholders view the company and the relationship of
the company with its shareholders. This perspective includes the long term financial needs of the
company. In order to meet the needs of the financial perspective the company focuses on revenue
growth by maintaining proper relationship with the shareholders. The company aims capital
investment activities through mergers and acquisitions and also helps in paying more to the
shareholders has the company has been able to reduce the non-GAAP pay out ratio between 35-
40%. The customers perspectives includes identification of the target market for the company
and segmentation activities of the company and the way the company or views by its customers.
It also measures the customers satisfaction, retentions and other activities. The target market of

7CRITICAL SUCCESS FACTORS OF BEST BUY
the company is the retail consumer electronics segment and the company employees brand
loyalty as it is the market leader and it is the most bought product of most of the Americans.
Therefore the company has a good image from the consumers perspectives. However, the
company can vary out various other programs to improve the customer satisfaction. The
company has good customer accessibility to ensure that the customers get what they want easily.
The company’s learning and growth perspective includes various employee satisfaction activities
carried out by the company. The company considers it employees the most important human
resource and so the company carries out various activities in order to keep their employees
engaged. The company has recently undertaken a program to look after all its balance scorecard
perspectives namely- the shareholder to have improved relationship with them, to improve
customer satisfaction by making use of technological equipments, the company has undertaken
the program to have employee retention activities and to improve the internal business process.
Evaluation of segments in order to achieve the CSF
The company has undertaken a program recently called the renew blue that will help the
company to carry out turnaround activities and strategy and to achieve the critical success

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factors. The company is focusing on capital stewardship in order to gain competitive advantage.
Figure 5: improving financial capabilities
Source: (www.bestbuy.com, 2019)
From the above diagram it can be understood that after undertaking the program of renew
blue the company’s financial perspective have improved as there is a continuous improvement in
the efficiency of balance sheet. The company’s sales increased in the year 2016 due to the
program of renew blue, the company aimed at improving the employee engagement activities
and therefore the employee turnover was less. Therefore it can be said that the consumer
perspective, financial perspective, the internal business process perspective and the learning and
growth perspective has improved. The company is aiming at improving the customers
satisfaction by making use of technological advancement. The company is aiming to make use of
internet of things for improving the customers satisfaction. In order to measure the progress there
will for various critical success factors and Key Performance Indicators for this purpose.

9CRITICAL SUCCESS FACTORS OF BEST BUY
Conclusion
From the above discussion, it can be concluded that, Critical success factors help in
achieving success of the organization by laying down various strategic objectives and goals for
the same purpose and the balance score card helps in measuring the performance of the
organization keeping in mind the key success factors. The paper highlights the importance of
CSF in achieving the organizational goals and also focuses on the balance score card of the
selected company , the SWOT analysis and others.

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References
Aquilani, B., Silvestri, C., Ruggieri, A., & Gatti, C. (2017). A systematic literature review on
total quality management critical success factors and the identification of new avenues of
research. The TQM Journal, 29(1), 184-213.
Lubis, A., Torong, Z. B., & Muda, I. (2016). The urgency of implementing balanced scorecard
system on local government in North Sumatra–Indonesia.
Muda, I., Erlina, I. Y., & Nasution, A. A. (2018). Performance Audit and Balanced Scorecard
Perspective. International Journal of Civil Engineering and Technology, 9(5), 1321-1333.
Netland, T. H. (2016). Critical success factors for implementing lean production: the effect of
contingencies. International Journal of Production Research, 54(8), 2433-2448.
www.bestbuy.com (2019). [online] www.bestbuy.com. Available at:
https://www.bestbuy.com/site/promo/tv-deals [Accessed 9 Jun. 2019].

11CRITICAL SUCCESS FACTORS OF BEST BUY
Appendix
An unstructured interview was taken with the employees of the employees of the organization
and the following questions were asked.
Question 1:
How can we maintain better relationship with our shareholders?
Response dent 1:
We can give them dividends at higher rates and ensure that they get regular dividends from the
capital income that we get and this will help us in improving our image in front of our
shareholders and that is an important determinant of financial perspective of the balance score
card.
Question 2:
How can we satisfy our customers in a better way so as to improve our image in front of them?
Response dent 2:
We can improve customer satisfaction by improving our accessibility to them for that we need to
open more stores so that will help to ensure that the customers get what they want easily and we
need to improve their convenience for repeat purchase as that will help to improve their loyalty.