Best Buy is a retailer store, which was known for being one of the best retailers in the market at the beginning of the previous decade. However, with the introduction of the internet and technologies, the business model of Best Buy needed a change as its profits began to decrease. After Hybert July was appointed as a CEO in 2012, he introduced a new business model, which focused mainly on the market of North America as international operations were hindered and constituted only 17 percent of the overall revenue. One of the foundations of Best Buy’s success is the introduction of sustainable strategies and “omnichannel” retailing. Omnichannel retailing meant that customers were able to make a purchase easily regardless of the way it is made – online, in the store, or via smartphone.
According to Porter’s Diamond model, Best Buy, a firm’s strategy to focus on the internal market gives it a competitive advantage as its biggest retailing competitors – Walmart and Amazon focus on their own lanes, which are international operations and online retailing, respectively. The demand in the retail industry is not hindered by any external factors such as economic crisis. Related supporting industries provide Best Buy with technological advancements, which contribute to the growth and success of the company. Finally, factor conditions such as skilled labor, technological innovation and infrastructure in North America are suiting for the goals of the company.
Hence, it is important to write the strengths, weaknesses, opportunities, and threats of the company. Its strength is the “omnichannel” retailing approach and sustainability, which make the company more likely to be preferred due to its practices (Trainer, 2018). One of the weaknesses is the lack of focus on international operations, which is a big source of revenue for competitors such as Walmart. There is an opportunity to expand the relationships with the customers by investing in technological advancements. Threats may be imposed by the competitors in the retailing business such as Walmart or even Amazon who may expand their market share in the North American Market. Best Buy does not focus on its international operations and intentionally narrowed its presence on international markets as a part of the strategy. At its peak, the international operations of Best Buy constituted 17 percent of the overall revenue (Trainer, 2018). One of the new development transformations in Best Buy is its recent strategy of focusing on long-term investments instead of short-term problem solutions. Hence, the Best Buy manages to stay relevant in the competitive retailing industry by focusing on internal markets, applying omnichannel retailing, being sustainable, and endorsing long-term investments into technological advancements.
Trainer, D. (2018). Best Buy rising from ashes to lead new retail paradigm, Forbes.