Best Buy Co., Inc: Sustainable Customer Centricity Model Essay

topper debase is the largest national electronics chain and the precisely one that remains since the closing of Circuit City in 2009 and Comp ground forces before that. Founded in St Paul, Minnesota in 1966 as the Sound of medication Store, it was rebranded as opera hat grease ones palms in 1983 with a single flagship remembering in Burnsville, Minnesota. By 1993, surmount subvert had become the United States second-largest consumer electronics retailer, breakage into Fortune magazines annual ranking of top cholecalciferol companies two years later at number 373. A confederation with Microsoft in 1999 serve up to boost the companys profile and lead-in to the opening of its offset retail store in Shanghai which was fol secondaryed by stores in Canada, Mexico, Tur severalise, and nine European countries (Lowe, 2008 May 8). top hat presently operates 1,105 coarse box stores in the United States. In addition to personal computing machines, computer equipment, and consum er video and audio intersection points, top hat sully outlets, which ar on honest 44,000 square(p) feet in size, worrywise offer large and small appliances, and frolic software that includes DVDs, compact discs, video games, and computer software (Funding Universe, n.d.). exceed misdirects subsidiaries include Geek Squad, Magnolia Audio Video, Pacific Sales, and in Canada, it operates under both the Best sully and Future Shop labels.Best spoil differentiates itself from its closest competitors, Walmart and Amazon.com, by not focusing on low equal products but by switching from an aggressive commission-based system of redevelopment to highly happy sales associates and assistance solutions. Having a well-trained cater who screwing educate the nodes regarding product features, allows the guest to make informed buying decisions on big-ticket items. In addition, with Geek Squad capabilities available in-store, Best Buy is able to provide installation services, produc t repair and on-going support for these or other items the guest purchases (Hill & Jones, 2013, pC22). This end-to-end solution is one aspect that separates Best Buy from its competitors.This is also one of the many strengths Best Buy currently possess. Best Buys node centricity approach is cite in its survival and is whateverthing often missing from their competitors. Best Buy takes the fourth dimension to understand who its customer is and what they need. They then took this information and started selling solutions instead of save products.Best buy also changed the layout of the store based on customer feedback. This included bundling together related products, offer installation help for all electronics, and improving store productivity by adding more engineering science experts to the sales al-Qaida and deploying touch screen monitors with product information. Future plans also include a 10% reduction in US square footage over the next 3 to 5 years. A felld floor pl an will not exactly be more cost efficient but will provide an overall easier shopping implement for the customer (Briggs, 2011 April 14). Customer centricity is necessary in to sidereal days agonistic market and it is a concept Best Buy continues to excel at. oneness of Best Buys weaknesses includes the decline of solve income and operational margins. Although this could be a function of increased costs, it is more likely due to determine pressure (Hill & Jones, 2013, pC20). The sparing decline and consumer pressure has forced the prices of consumer electronic products to be lowered. This decrease in prices has caused the decline in margins which negatively affect net income and operating margins. Another area of concern is the increase in accounts due and enrolment. Best Buy had a 1% increase in inventory from 2008 to 2009 and a 12.5% increase in revenue accompanied by a 240% increase in accounts receivable (Hill & Jones, 2013, pC20). This creates a potential risk for lo sses due to bad debts. Best Buy is weak in their top executive to quickly typeset inventory level to the demand, in order to reduce costs related to inventory. Best Buy did not recognize the economic downturn and was not successful in adjusting their inventory levels (Sienna College, 2009 April 17). This is an area for value for Best Buy as the economic downturn has created an oversupplied market.Best Buys best opportunities lie in their series of acquisitions into their Best Buy family. Best has gained valuable carry out in the transition of integrating new-fangled companies and service providers with their keen ability to know where to expand and is a key component in their ability to differentiate their company from others in the grocery (Hill & Jones, 2013, pC23).Best Buy also has room for opportunities as they fall in grow upon their orbiculate comportment. This global presence exceeded expectation late in 2009 with a 15% uptick in international sales. European store s experienced a 4% gain in same store sales, while Best Buys China store sales jumped 34% (Lindner, 2010 March 25). This global presence also opens up opportunities to trace global technology trends first hand and opens the door to newly developing markets. It also provides a capacious range of places to test and introduce new products and analyze customer needs.Best Buy faces many threats beginning with the economic decline. Todays customer has less disposable income and Best Buy sells luxury right(a)s and not exigency items. The future of the economy including consumer confidence, unemployment, tax rates, fuel costs, and the availability of consumer credit are all factors that could affect consumer spending and Best Buys earnings.Another concern for Best Buy is increased competition particularly from online competitors like Amazon.com. Amazon has an return over Best Buy because they are able to maintain a lower cost structure compared to a brick and mortar store like Best Buy and can push those savings finished to their product pricing and selection. With an increasing trend in the consumer electronics industry to shop online, Amazon.com is positioned utterly to maintain strong market growth and potentially steal some market share away from Best Buy (Hill & Jones, 2013, pC22). Best Buy will have to continue to differentiate themselves from their internet competitors with their unmatched customer centered beat of business.Based on the findings of the SWOT analysis, Best Buy should continue to develop and implement their customer centricity model. This customer based model creates better customer satisfaction, promotes growth, and creates a unique experience. On the other side, Best Buy needs to address their decline in net operating income. This authority cashing in on opportunities such as expanding their global presence which has had much success in generating profits. Best Buy should also be conscientious of their inventory levels in comparison to revenue increase. They need to adjust for the economic downturn while continuing to offer a good mix of products accompanied with superior service.Best Buy needs to die hard on top of technology trends in order to keep up with online sales threats from Amazon.com and others. Best Buys focus should be on the continual improving of the in-store shopping experience that currently differentiates them from competitors like Amazon. This means added customer service, technology experts, and services that take the customer from the initial purchase all the way through installation and use.Best Buys corporate level strategy revolves around their customer centricity model and is the loading of their company mission and goals. To implement this strategy and achieve a warring emolument, Best Buy maintains a wide variety of products to meet customer needs but also goes beyond the initial sale into service offerings. Best Buy has used their customer centricity model, which is built around a s ignificant database of customer information, to construct a diversified portfolio of product offerings (Hill & Jones, 2013, pC22).This live database allows Best Buy to structure customer needs to the locations they are requested, which in turn helps keep costs lower by shipping the oppose inventory to the correct locations. This is important because it helps to offset the extra costs postulate to provide high-level training to sales associates and service professionals. This structuring of inventory is a large part of their business-level strategy and is advantageous for Best Buy because separately market contains the products most desired and avoids items not sought after by customers.Best Buys customer based structure is only as strong as their greatest service professional and staff member. Best Buy recognizes this and invests a lot into their employees. Best Buy has a reputation for retaining their talent and is widely recognized for superior service. Highly trained sales pr ofessionals, like the members found at Best Buy stores, have become a unique resource in the consumer electronics industry, where technology is ever-changing at an unprecedented rate, and this is a significant source of competitive advantage for Best Buy (Hill & Jones, 2013, pC23).Currently, Best Buy has recently gone through an organisational change due to the departure of CEO Brian Dunn, U.S. retail caput Mike Vitelli, and chief administrative officer Tim Sheehan. New CEO, Hubert Joly, is in the process of outlining new strategies that will strengthen operations and financial performance. He has express that he will continue to build on their strong customer service model and their multi-channel shopping experience (Best Buy News Release, 2012 November 13). mend this falls in stride with Best Buys preceding strategy, Joly has also stated that Best Buy has been unwind in capturing their elegant share of the online channel. This leads me to my first recommendation, having a la rger e-commerce presence. piece of music Best Buy cant duplicate their high-level customer service experience found in-store they can expand on sales by offering a broad range of products online. From here, customers can be invited to visit stores in person for services that may aide in the set-up and installation of products purchased online. I also recommend that Best Buy address their issues with outstanding debt by temporarily halting expansion and focus on their current strengths. While acquisitions have been very productive for Best Buy, they may want to slow down temporarily as the economy starts to recover and consumer spending lento begins to increase.While Best Buy has faced a lot of chastisement in recent years, they also have made smart strategical decisions that have kept them pliable. Best Buys new leadership has a lot to work with and should also introduce fresh organizational change that will help propel Best Buy into profitable territory.ReferencesBest Buy News Release. (2012, November 13). Best buy holds analyst and investor day to provide assessment of the company and to outline priorities to reinvigorate performance and mend its business. Retrieved from http//pr.bby.com/phoenix.zhtml?c=244152&p=irol-newsArticle&ID=1758160&high