DISCOVERY

Best Buy SWOT Analysis

An In-Depth SWOT Analysis of Best Buy

1. Background of Best Buy

1.1. General Overview of Best Buy

Company’s Name

Best Buy

Company’s former name

Sound of Music (1966-1983), Best Buy Co. Superstore (1983-1984), Best Buy Superstores (1984-1989)

CEO

Corie Sue Barry

Company type

Public

Year founded

August 22, 1966

Number of Employees

102,000

Founder

Richard M. Schulze, James Wheeler.

Area served

United States, Canada, Mexico

Headquarters

Richfield, Minnesota U.S.A

Operating income

US$1.90 Billion (2019)


1.2. Introduction of Best Buy

Best Buy is one of the recognized Multinational Corporation which has an American origin. It is a 50-year old electronics retailing company. Even the company has launched a particular audio store named Sound of Music. This brand has ranked as the sixth largest e-commerce website in the USA and ranked as the most reputed eCommerce company globally.

For the Best Buy SWOT analysis, the company mainly concerns with electronic retailing. Moreover, there are many companies of the same segment. Thus, in the world of high competition, sustaining one’s position stagnant in the international market has become very important.


1.3. Milestones Timeline of Best Buy

1966

Schulze, with his business partners, established exceptional audio and electronic store named Sound of Music.

1981

With a low price and no-frills, the company has responses in their “Tornado Sales.”

1989

The firm launched its strategy of warehouse-style. Also introduces their Logo of Best Buy Yellow-tag.

1993

Ranks as the 2nd largest “Consumer Electronics Retailer.”

2003

The company incorporated a new $160 million, 1.5 million sq. foot campus for corporate in Richfield.

2004

Forbes magazine titles the brand “Company of the year.”

2014

Introduction of the new logo called Belo

2012

Announces their plan to shut 50 superstores. And this made many unemployed.


2. SWOT Analysis of Best Buy

The competitions are at their peak in the global world of competitions in this segment. Many companies of the same segments are rising and also falling very soon. Surprisingly, this company is still alive relatively thriving, whereas others have failed. Best Buy SWOT analysis is highly required to understand this success and provide recommendations to carry on with it in the coming years.

2.1. SWOT analysis of Best Buy in detail

Strength:

For Best Buy, the very first step is to expand their market into high purchasing capability areas. Market penetration seems important for majority of companies. Then, only innovation could make greater progress in this industry:

  • The company dominates the market in the sector of electronics retailing. Across Europe, China, the USA, Mexico, Canada, and Turkey, the brand operates around 1,231 stores;
  • The company has an innovative skill of Sale-service strategies. The company has the largest USA website. It proves that they are tech-friendly too. Before selling their electronic goods, they follow up a proper consultation with the experts and compare their other brands' tools. Thus, gaining great strength in terms of sales;
  • The company designs itself to be customer-centric. They use to manufacture their product in such a way that the customers can easily access it. Even a Geek squad can also access their technology. The more the customer loves their products more they love to spend on them.
Weakness:

Besides its strengths, it is also crucial for a company to know its weakness. Once they identify the reasons affecting their growth, they can take the necessary steps to negate their impact:

  • This brand has only 1231 stores in the entire world. It acts as a challenge for the company. They do not have recognition in other countries of the world. Even in countries beyond North America, the company has no trace. Their operation is very restricted. It is a significant weakness of this brand;
  • An inappropriate relationship between the CEO and executive of another company came up in January 2020. This allegation initiates negative publicity. Customers lost their trust in this company after this allegation;
  • The company is entirely dependent on electronics, which is a weakness of the company. Technology is changing each day. Even technology is dynamic. In contrast, this company relies on Electronics.
Opportunities:

The company's performance assessment shows how they can use the available opportunities in their favor. The company can concentrate on the ones that align with their strengths. As a top-rated brand, Best Buy has several strengths which allow them to use many of the opportunities to ensure their growth:

  • Their business caters around the senior health care products is a goldmine for them. According to Morgan Stanley's report, the brands need to focus more on seniors' healthcare products than on electronics. The company can fetch a considerable amount of profit due to this;
  • Online sales can credit more to the company's account. Moreover, the company has a background in e-commerce. It helps to improve their sales. Even to attain more in this field, the company can seek the same level as Amazon. 25% of total sales have also increased due to this in February 2020;
  • Along with the stores in the US, the brand should expand its business throughout the world. The company can achieve success in the unsaturated markets of rising economies.
Threats:

In such fierce competitions, how to stay steady in this industry could be the first priority for any companies, including Best Buy:

  • The brand has a vast and intensified competition with Amazon and Walmart. It grabs the market share of Best Buy;
  • The strikes higher pay by the employees may lead the company to danger;
  • The company relies on electronics; moreover, counterfeiters are also their target. The counterfeiters consist of high-quality and cheap digitally available products. Thus, one cannot resist this bargain as it can lead to a big fear of losing customer's faith in the company.

best buy swot analysis

Source:EdrawMax Online


3. Key Takeaways

The company has led to many changes. Thus, the following recommendations, based on the Best Buy SWOT analysis, can help in the further growth of the firm:

  1. The brand should expand its business worldwide as it will help to grow its business as well;
  2. Best buys require upgrading their online market. They can even offer a discounted price on goods. Cheap and quality products attract most of the customers. It can eradicate their fear of losing customers;
  3. 3.The company has always been customer-centric. However, they need to launch more products online, which might be relevant to the consumer-electronic market.

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